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Valuation Expert Aswath Damodaran Reveals Facebook Estimate

Prof. Aswath Damodaran is famed for his ability to value a company and he tells us that he’s amazed how quickly the market turned on Facebook.

“When you look at the plusses and minuses – not that much has changed,” he says on CNBC’s Fast Money Halftime Report.

“I’ve lowered my revenue growth estimates based on the earnings report and I brought down my margins but Facebook still has incredible potential and the capacity to monetize the potential is still there.”

And for that reason Damodaran says Facebook should be a $24 stock.

However, that’s not the level at which he’d buy.” I’m concerned about corporate governance,” he says. “The deck is stacked against investors – there’s a better chance that Russia gets rid of Putin than Wall Street gets rid of Zuckerberg.”

He also says the stock has fallen out of favor. “Momentum is a dangerous thing, so it could keep going down.”

However, there is a level at which Damodaran tells us Facebook would just be too cheap too pass up. You can find his entry point in the video above.

Posted by CNBC's Lee Brodie

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Trader disclosure: On August 22, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long SBUX; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long EMC; Joe Terranova is long NXPI; Steve Weiss is short: AAPL PUTS; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU

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