If Facebook Is Worth $50 Billion, Shares Available at 60% Off

"Most investors don't know you can buy Facebook shares today, pre-IPO," writes Track.com's Lou Kerner in a report released yesterday on Facebook's value.

Kerner puts Facebook at $50 billion, more than double the valuation given by sites such as SecondMarket.com, a marketplace for private company stock, where shares are trading at $38 apiece. At the current price, a multiple of 18 times EBITDA gives the company a $19 billion valuation. Kerner says shares are more than 60% off what they should be.

The valuation is based on $125 per member, and Kerner notes that Facebook only needs to earn $20 per user, not a stretch since Google earns $20 in revenue per user, Amazon earns $15 and eBay earns $34.

To prove his point of the social networking site's potential, Kerner really gets behind the concept of "friendcasting," in which links are shared among users, and points out that the site is a key driver of traffic around the Web (as one small example, I learned about this report through a Facebook contact who posted it to her feed). He also talks abut how Facebook hasn't yet fully leveraged its advertising and commerce potential.

But don't even think about going ga-ga over Zynga and its farm animals, he writes in a separate post:

This notification, I mean spam, works as a zero cost marketing tool, enabling the big game companies to get even bigger. But I believe that with the dramatic growth of "I don't care about your farm, or your fish, or your park, or your mafia" the glory days of billions of daily spams to Facebook users by Zynga and other game providers is numbered. Is this the beginning of the end for the game guys? No, but I do think it's the end of the beginning.