Right now, aggressive investors – including storied hedge fund SAC Capital – are going out and loading up on Facebook shares for around $32 to $35 a pop – an implied valuation around $76 billion.
The reason why is pretty simple.
Thanks to its 750 million users, lots of people with lots of money think that Facebook is probably going to IPO at a $100 billion valuation sometime in early 2012.
These private investors also figure that Facebook will follow a pattern set by recent tech IPOs and that its stock will pop like crazy during its first few weeks on the market.
Presumably, some of these investors also believe in Facebook’s long-term prospects – its ability to grow its already multi-billion dollar profits and revenues at a pace close to the one Google set in its early years.
One man – one analyst – thinks they are wrong.
Meet PrivCo CEO Sam Hamadeh, Facebook bear.
Among other unorthodox views, he thinks…
- Facebook’s IPO won’t happen “anytime soon”
- “Facebook usage has peaked in the near term” and that Facebook’s growth has “suddenly hit a a brick wall” because of Google+ and “Facebook fatigue.”
- “Facebook management internally is in a virtual panic.”
These are very uncommon views – ones that we hardly ever hear. But Hamadeh says he has “sources inside the company” and he seems unafraid of staking his reputation on controversial viewpoints.
Of course, Hamadeh has an incentive to be so…interesting.
PrivCo makes its money from subscription sales to financial institutions and market research firms.
Right now, Hamadeh says he and his team are “quietly building our business” – but really, it is doing its best to get its bearish – and admittedly, intriguing – arguments about Facebook in as many publications as possible.
So far, Hamadeh told us in an email, “our research and data have been cited in numerous publications including SJ Mercury News, SF Chronicle, CNBC, etc.” Hamadeh is going on Bloomberg TV on Friday. Here he is on Business Insider.
It feels like there’s a pattern – and perhaps a certain cynicism to Hamadeh’s analysis. After sending us negative research about Facebook for a number of weeks, Hamadeh has since moved on to Groupon, which he is also very bearish on.
PrivCo’s Groupon conclusions:
- “Dramatically increased competition from competitors with natural competitive advantages to Groupon, particularly local publications that have pre-existing relationships with local advertisers.”
- “Well-funded national competitors are even further pressuring Groupon’s business, particularly from Google, Inc.’s newly launched Google Offers (PrivCo sources inside Google confirm they are deliberately and aggressively undercutting Groupon’s fees to merchants in order to cause serious financial damage to Groupon), and from privately-held Living Social, which just raised $400 million in venture capital in April of this year that it is deploying to launch a massive television advertising blitz.”
- “Groupon faces serious legal troubles from the SEC and local state governments, which will likely cause it to acknowledge it sells gift-certificates rather than coupons, with major new consumer regulatory costs and burdens.”
- “Groupon’s users are each spending less per month over time (down by near half from a year ago), while Groupon is spending more to acquire each customer.”
Hamadeh is hardly the only analyst out there with an angle. Over here at Business Insider, we tell the truth with style, so you’ll click on our stories and see ads. Wedbush analyst Lou Kerner – a huge Web 2.0 bull – writes his research for a firm that helps private investors play in the secondary markets.
Hamadeh says that before he launched PrivCo in 2009, his work included “stints at Goldman Sachs” in media M&A and IPOs. He says he is also a corporate attorney and a “lifelong entrepreneur.”
The truth is, we don’t know Hamadeh from Adam. We have no way of verifying that he actually has “sources inside the company.” We don’t know whether we believe anything he says. But it sure is hard not to quote him – and inadvertently plug his product in the process.