FORT LEE, N.J., Feb. 3, 2012 /PRNewswire/ -- The National
Inflation Association announced today that it believes Facebook
will likely start trading this May at a peak valuation of
$100 billion and see its market
capitalization and share price decrease in value in the years
afterwards. Facebook has successfully grown their monthly active
users from 1 million in 2004, to 6 million in 2005, to 12 million
in 2006, to 58 million in 2007, to 145 million in 2008, to 360
million in 2009, to 606 million in 2010, and to 845 million in
2011. After achieving compound annual user growth from 2004 to 2010
of 191%, Facebook's user growth in 2011 declined to only 39%. If
Facebook begins trading with a market cap of $100 billion, Facebook will be trading for
approximately 27 times 2011 revenue of $3.711 billion and approximately 150 times 2011
net income of $668 million.
A price/sales ratio of 27 and P/E ratio of 150 is too high of a
premium to pay for a company that has just reached 50% market
penetration in the U.S. Moving forward, NIA believes in 2012 we
will likely see Facebook's user growth decline to 20%, with its
user growth declining to just 15% in year 2013 and 10% in year
2014. It is unlikely that Facebook will ever be able to achieve the
same market penetration in Europe
that they have achieved in the U.S. Facebook needs to expand into
the Chinese market, but the Chinese government has blocked off
access to the social network.
In October of 2007, Microsoft invested $240 million into Facebook at a valuation of
$15 billion. In January of 2011,
Goldman Sachs' international clients invested $1.5 billion into Facebook at a valuation of
$50 billion. While Microsoft is set
to make a profit of 667% in 4 1/2 years and Goldman Sachs'
international clients are set to make a profit of 100% in just 1
1/2 years, NIA believes that the U.S. financial mainstream media
that is currently hyping the Facebook IPO, is setting the general
public up to get slaughtered on Facebook's common stock.
The consumer social networking space has experienced very
dramatic growth over the past few years, with Facebook being the
dominant leader of the industry. Moving forward, NIA believes that
social networking technology will soon begin to revolutionize the
workplace in the same way that it changed the personal lives of
millions of people around the world. Recent college graduates, who
experienced Facebook's very dramatic growth first hand, are
beginning to enter the workforce and are demanding that their
employers adopt enterprise social networking technology at their
place of employment.
The enterprise social networking industry is projected to grow
61% annually between now and 2016. Enterprise social networking is
expected to grow from being a $600
million space in 2011 to a $6.4
billion space in 2016. This is similar to the type of growth
seen in the consumer social networking space over the past four
years.
Although Facebook is the dominant leader in the consumer social
space today, there is a good chance that another consumer social
company will grow to become larger than Facebook in the future.
Back in 2006, many analysts expected MySpace to remain king of
consumer social networking forever and projected MySpace to
continue rapidly growing indefinitely. Instead, Facebook surpassed
MySpace and MySpace was recently sold by News Corp for 94% less
than what they paid for it.
The American public needs to realize that Facebook at a
valuation of $100 billion has far
more downside risk than upside potential. While Facebook's growth
is going to rapidly decline in the years ahead, there are two
publicly traded companies in the enterprise social networking space
that are positioned for enormous revenue growth moving forward. The
user growth of these two companies could accelerate greatly in the
years ahead as major corporations begin rapidly deploying their own
enterprise social networks.
Today, the enterprise social networking industry is still in its
infancy, but by 2016 it is likely that the majority of the largest
corporations around the world will be using some type of enterprise
social networking platform within their business. The two major
publicly traded companies in this space today are Jive Software and
BroadVision Inc. Jive is the industry leader with a market cap of
$937.97 million. After subtracting
Jive's estimated net cash position of $200.99 million, Jive's Engage social platform is
currently being valued by the market at $736.98 million.
BroadVision only has a market cap of approximately $153.51 million. After subtracting BroadVision's
cash position of $54.4 million and
another $17 million in value for
their old legacy products still generating revenue, BroadVision's
Clearvale enterprise social platform is currently being valued at
only $82.11 million.
BroadVision is NIA's latest position. BroadVision just reported
that they signed 117 new Clearvale Enterprise customers in 2011, up
an amazing 290% from the 30 they signed in 2010. In fact,
BroadVision signed 33 new Clearvale Enterprise customers in the 4Q
of 2011 alone, which was more than they signed in the whole entire
previous year. Jive hasn't yet reported their year-end 2011
results, but Jive has reported that they only signed 113 new Engage
customers in the 12 month period ending June
30, 2011.
BroadVision's Clearvale is now growing faster than Jive's
Engage, when at their current share prices Jive is receiving a
valuation for Engage that is approximately 9 times higher than the
valuation that BroadVision is receiving for Clearvale. Besides
BroadVision's fully featured Clearvale Enterprise, BroadVision also
offers a free starter version called Clearvale Express. Any
employee at a company can quickly and easily setup their own
Clearvale Express account to use at work. After outgrowing
Clearvale Express, companies have the ability to seamlessly upgrade
from Clearvale Express to Clearvale Enterprise.
BroadVision also offers a unique Clearvale Passport reseller
program, which allows other companies to offer Clearvale to their
clients. Softbank, a $30 billion
Japanese telecommunications giant, had so much success using
Clearvale Enterprise within their corporation that they have now
joined Clearvale Passport and are offering both Clearvale Express
and Clearvale Enterprise to their partners and clients. NIA
believes that BroadVision's free starter Clearvale Express platform
along with their reseller program Clearvale Passport, gives the
company a huge advantage over Jive. In NIA's opinion, BroadVision
has the potential to become a bigger company than Jive in the
future.
To learn more about all public social network stocks as well as
private social network companies that could go public in 2012, NIA
is currently offering its 2012 Social Network Stocks report by
going to: http://inflation.us/social2012.html
About NIA:
The National Inflation Association is an organization that is
dedicated to preparing Americans for hyperinflation. NIA offers
free membership at http://www.inflation.us and provides its members with
articles about the U.S. economy and inflation, daily news stories
and blog updates, and important charts not shown by the mainstream
media. NIA is the producer of economic documentaries that have
received a combined 17 million views including the critically
acclaimed 'Meltup,' 'The Dollar Bubble,' 'End of Liberty,'
'Hyperinflation Nation,' and brand new 'College Conspiracy.' NIA
provides unbiased reviews of the major online sellers of gold and
silver bullion and also offers profiles of gold, silver,
agriculture, oil, and alternative energy companies that could
prosper in an inflationary environment. NIA is the creator of
'NIAnswers,' the world's most comprehensive database of questions
and answers about inflation, currencies, debt, and precious
metals.
Legal Disclaimer:
NIA currently owns 147,000 shares of BroadVision. NIA agreed to
a 60 day holding period on its initial position of 122,000 shares
starting from the date that NIA first suggested the company, but
NIA intends to sell these 122,000 shares at some point in the
future after the date of February 12th,
2012. NIA intends to sell its additional 25,000 shares of
BroadVision and can sell them at any time. NIA reserves the right
to accumulate additional BroadVision shares at any time. NIA's
co-founders have also been referred business in the past from
somebody who has filed as a large BroadVision shareholder. NIA's
report is intended for informational purposes only and does not
provide investment advice. Neither NIA nor its co-founders are
investment advisors or broker/dealers. Past performance is not an
indicator of future returns. NIA's stock suggestions are not a
solicitation or recommendation to buy or sell any security. Never
make investment decisions based on anything NIA says. Do not rely
on information from NIA to make investment decisions. Only use the
information contained in NIA's report as a starting point for you
to conduct your own research and make your own investment
decisions. NIA does not guarantee the accuracy of information in
its report. Stock market investing is extremely risky. NIA's
co-founders may have previously discussed some companies in other
media outlets.
SOURCE National Inflation Association