Quis Pendit Ipsa Pretia: Facebook Valuation and Diagnostic of a Bubble Based on Nonlinear Demographic Dynamics

@article{Cauwels2011QuisPI,
  title={Quis Pendit Ipsa Pretia: Facebook Valuation and Diagnostic of a Bubble Based on Nonlinear Demographic Dynamics},
  author={Peter Cauwels and D. Sornette},
  journal={Microeconomics: Production},
  year={2011}
}
  • Peter Cauwels, D. Sornette
  • Published 2011
  • Business, Economics
  • Microeconomics: Production
  • We present a novel methodology to determine the fundamental value of firms in the social networking sector, motivated by recent realized IPOs and by reports that suggest sky-high valuations of firms such as facebook, Groupon, LinkedIn Corp., Pandora Media Inc, Twitter, Zynga. Our valuation of these firms is based on two ingredients: revenues and profits of a social-networking firm are inherently linked to its user basis through a direct channel that has no equivalent in other sectors; the… CONTINUE READING
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