How Much Is Facebook Worth?
Facebook (Nasdaq: FB) is the world’s largest, and arguably most influential, social media platform, with more than 2.8 billion monthly active users as of 4Q 2020, including more than 258 million in the U.S. and Canada alone. Whether you use Facebook to stay in touch with friends or to build a brand, it’s hard to deny its ubiquity and reach.
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The company has long been controversial, particularly due to its laissez-faire attitude towards what people and organizations post on the site. This reached a boiling point in 2020, as Facebook finally took steps towards removing hate speech and false information from its site. The prevalence of “fake news” and misinformation regarding the coronavirus forced the company to make changes regarding its policies and algorithms, and in late 2020, the company took the ultimate step of suspending then-President Donald Trump from its site in the wake of the attack on the U.S. Capitol.
Of course, these steps were in and of themselves controversial, particularly for shareholders, who want the company to maximize its profits. By reducing the number of people that interact with the platform, there could be a ripple effect that ultimately leads to reduced earnings for Facebook. So, in 2021, the company is going to have to figure out how to walk that fine line of policing the content on its site while still growing profits like it did in 2020, when earnings popped a whopping 58% to more than $29 billion for the year.
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Another looming issue for Facebook is its privacy battle with Apple, coupled with the societal trend towards more consumer choice regarding third-party information dissemination. New changes in Apple’s operating system will make it harder for Facebook to personalize its advertising, resulting in a drag on the company’s revenues and earnings.
Will the company be able to navigate those waters in 2021? Analysts seem unfazed by the company’s problems, with a consensus “strong buy” on the stock and an average price target of $341.85, some 30% above current levels.
What Facebook Is Worth | |
Facebook’s Share Price, 52-Week Range | $137.10 – $304.67 |
Facebook’s Market Cap, 52-Week Range | $329.04B-$731.2B |
2020 Revenue | $85.965B |
2020 Profit | $29.146B |
GOBankingRates’ Evaluation of | $279.95B |
All information on 52-week range accurate as of Feb. 19, 2021. | |
About Facebook | |
Headquarters | Menlo Park, Calif. |
Year Founded | 2004 |
$95.7B* | |
Facebook’s Market Cap Range: $329.04B-$731.2B
One of the most reliable gauges for what a company is really worth is market capitalization, or market cap for short. The market cap is the value of all of the company’s stock combined, giving you a sense of what value investors are placing on the company based on the price it is trading at.
Facebook’s market cap has ranged between $329 billion and $731 billion from February 2020 to 2021.
Mirroring the company’s outstanding earnings performance in 2020, Facebook stock had a year to remember as well. Even in the face of the coronavirus pandemic, which decimated many businesses across the country, Facebook managed to pop 33%.
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Facebook Net Worth: $279.95B
Although market cap gives you a sense of what the market values a company at, it’s based entirely on market sentiment — essentially reflecting the ever-changing opinions of investors — and it can change hourly. The GOBankingRates Evaluation, however, calculates a company’s net worth based on measurable figures like assets and revenue. It’s a more conservative valuation taking into account full-year profits and revenue from the last three years and the company’s assets and debts.
Based on Facebook’s revenue and profits from the last three years, Facebook is worth just under $280 billion.
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Facebook’s initial public offering got off to a rocky start, as the stock plummeted 50% in the first few months and took a full year to get back to its IPO price of $38. After improving its business model through better user experience, however, the company has since been on the rise, averaging returns of over 20% per year over the last five years, with a market cap of nearly $628 billion.
Facebook might have some choppy waters ahead, as it faces privacy and censorship concerns in addition to difficult earnings comparisons with its great 2020. However, Facebook has always had controversial waters to navigate, and the stock has continued to outperform.
Facebook’s History and Investors
Eduardo Saverin, Dustin Moskovitz, Chris Hughes and Mark Zuckerberg co-founded Facebook in 2004 while they were students at Harvard. The 2010 movie “The Social Network” dramatizes the company’s origin story, focusing on the split and subsequent falling out of Saverin and Zuckerberg.
As of February 2020, Facebook’s biggest shareholders include its founders, as well as big-name financial companies such as The Vanguard Group, Fidelity Management & Research and BlackRock Fund Advisors.
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John Csiszar contributed to the reporting for this article.
Last updated: Feb. 23, 2021
Mark Zuckerberg’s net worth accurate as of February 20, 2021, according to Forbes’ The World’s Billionaires 2020 list’s real-time data.
This article originally appeared on GOBankingRates.com: How Much Is Facebook Worth?
