More Details On Teens Abandoning Facebook
This news fits our thesis that Facebook will have a very difficult time justifying the $61B valuation. Clearly it is a valuable social network that will maintain millions if not billions of users for a long time. The company can grow revenue while losing North American users as it becomes more efficient. The problem over the next few years is that the domestic user base could be much smaller and those are the users that are worth the most.
In our opinion, it doesn't justify the current $61B valuation. Even at $20B, Facebook would be one of the largest companies in the world and trade at 3x revenue.
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