Even if they do, I can’t see how they turn that into $10/year of revenue.

Finally, their expenses are significant. They would need more than $5B in revenue to justify a $50B market cap.

Facebook isn’t disappearing. Most users have hundreds of friends, large amounts of photographs stored on the site. Its difficult for them to en masse leave on social networking site for another so I think Facebook has staying power. And social networking sites have real value to people especially those who read sites like this who have studied abroad, worked abroad, gone to college far from home, moved around, etc etc. Its the easiest way to stay in touch at least a little bit with people that at one time were close associates/friends that you no longer can see on a regular basis.

I have no idea though on valuation as monetizing the site is still difficult. But they do have 500 million subscribers with a 50 billion market cap. If they can make $10/year/subscriber then this will be a 10 p/e.

Also you think many companies have market cap equal to their tangible assets? What do you think the “tangible assets” of Google are or Microsoft?

When these companies go under – their shareholders don’t have much in the way of tangible asset to liquidate do they? They are buying derivatives of an abstraction. Facebook is almost a virtual business with a few real offices.

If Facebook has significant office space it could be lease. But it seems that an internet company like Facebook could be run by employees who work from their own homes.

Aren’t all the people investing at this moment assuming that a $50 billion valuation is a bargain? What will drive a higher valuation — let’s limit it to the Goldman Sachs Golddiggers — that makes the investment savvy?

Can a relatively illiquid market (one open to only ultra-high net worth individuals) do that? Or are these new investors buying at what they hope will be pre-IPO bargain prices? Would they otherwise, i.e., would they put up $2 million to get a upside potential based solely on privately-reported earnings?

Sorry, that’s about 17 dumb questions.

There are other companies that offer the ability to trade facebook shares.

Zuckerberg, moreover, has been more than willing to accept legal risks when need be. See http://bit.ly/gJF0ik

I have no doubt Zuckerberg wants to stay private as long as possible. The question is when his investors, particularly the ones on the board, start looking to cash out and so exert pressure on him to allow an IPO.