Facebook May Be ‘Undervalued’ at $100B, Pro Says

Tuesday, 29 Nov 2011 | 6:46 PM ET

Is Facebook worth its $100 billion pre-IPO valuation?

“It’s really a once-in-a-lifetime, once-in-a-generation type of company,” Lou Kerner, head of private shares platform at Liquidnet and “Fast Money” contributor, said Tuesday. “There really hasn’t been a company generating this type of excitement since Google.”

The popular social media company, he noted, was trading in private markets at a $75 billion valuation, at a 20-times EBITDA multiple.

Social Media & Facebook IPO
It's been no party for social media investors, with the Fast Money traders, and Lou Kerner, Liquidnet social media analyst, discusses Facebook's pending IPO and whether it's worth the $100 billion pricing.

It was still growing by more than 50 percent per year and generated an estimated $4 billion in 2011 revenue, he said.

Kerner also weighed in on LinkedIn and Groupon.

“We think Facebook is a much better buy than LinkedIn,” he said. “The global impact that social media’s going to have on every company in the world is really underappreciated, and the opportunity for LinkedIn to grow into all kinds of new business opportunities, I think, is really significant.”

Groupon’s quick growth and large subscriber base were positives, but Kerner said it faced a significant barrier of scale.

The value of its subscriber base, he said, was not wholly known.

“What we’re most surprised at with Groupon is that they went public at all at this early stage in their development,” he said.

Kerner added that the private market “generally tend to underprice these” shares, saying that investors pay for the benefit of transparency in a public corporation.

“I think what there’s kind of a misperception of about private-market trading is that you have a bunch of insiders selling to a bunch of idiots, and what we generally see is that you have people who are just practicing smart portfolio management selling to a lot of the smartest investors in the world,” he said.

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Trader disclosure: On Nov. 29, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova owns (VRTS), (AXP), (LULU), (DECK), (SBUX), (CAT), (CSCO), (HES), (SU), (EMC), (IBM); Seymour owns (AAPL), (BAC), (INTC); Finerman owns (AAPL), (BAC), (JPM), (YHOO), (IBM); Adami owns (C), (GS), (INTC).

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