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50 Cent Weighs in on Facebook Valuation

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Is Facebook a homerun for investors?

Jason Zweig at The Wall Street Journal isn’t so sure. Citing a finance professor, he offers a simple way to think about valuing the company.

Let's say the Palo Alto-based firm grows so fast over the next decade that it will match the size of the world's largest stock, Exxon Mobil, whose shares this week had a total value of around $380 billion. So, Zweig says, if the company grew in total value from its current $50 billion to $380 billion over the next 10 years, Facebook's stock would generate an average annual return of 22.5%.

In fact, as a maximum upside, that might not be as heady as some investors wished. “Facebook might someday end up as the world's largest company,” says Zweig. “But starting at the price already set for it, it isn't likely to end up as one of the world's best investments.”

Still, while its worth as an investment might be debatable, others eyeball Facebook and see a company of exciting promise.

One fan: Curtis Jackson - more commonly known as 50 Cent – who is well known for his hip-hop skills, business talent, and getting shot nine times. The Queens, New York-native recently told The New York Times that Facebook is worth at least $50 billion, in his opinion.

“Why isn’t there two Facebooks or three?” 50 asks. “Because it’s difficult to get that many people in one place and comfortable with the functions of that network. So I think it is worth that kind of money, maybe more, because everyone is aware of how to utilize it.”

The rapper acknowledged, however, that he hasn’t invested in the company himself although he did offer that he’s “had some money in Goldman."
POSITION:  No positions in stocks mentioned.