India is going to be the biggest market for the social networking site, but the company is yet to convert its advantage into money
Ever since its initial public offering, Facebook has been slammed as a prime example of a company whose economic reality couldn’t live up to the hype surrounding it. Its record in India might turn out to be no different.
When Facebook’s share price started tumbling down since its listing two weeks ago, not everyone was surprised. In February, as soon as its numbers became public, Aswath Damodaran, a finance professor at NYU Stern School of Business, valued the company at $72 billion. It made a debut with a valuation of $100 billion, or 100 times its earnings. Apple’s, by way of comparison, is about 14 times its earnings. Many analysts expected the price to drop, and it did.
(This story appears in the 22 June, 2012 issue of Forbes India. To visit our Archives, click here.)