For a global business community still experiencing economic pain, Facebook’s humongous $100 billion Initial Public Offering has been an emotional shot in the arm. For French business newspaper Les Echos, columnist Philippe Escande praises the story of Facebook founder Mark Zuckerberg as being at the heart of what still makes the American business sector the greatest in the world.
For Les Echos, Philippe Escande starts out this way:
It is an improbable story – one that could happen only in the United States. That of a twenty-year-old kid who in 2004 founded his own business just to prove he can, and eight years later finds himself the leader of a business valued at $100 billion. One hundred billion dollars is as much as McDonald’s and two and a half times that of General Motors. All this for a sophomoric prank that today employs no more than 3,000 people.
That is the magic of the U.S. financial sector, which is now being so widely criticized. To all those who think that the stock market serves only to accommodate rapacious speculators who enrich themselves while asleep, getting richer whether the market rises or falls, the Facebook story is a reminder of the two basics of investing: the long-term and risk. The long-term, because the value attributed to Facebook, the profits of which are minimal but the cost of doing business for which is still modest, is an anticipation of future performance. It is the idea that this company, which has quadrupled its revenues in two years, can in a single decade become a giant worth tens of billion of dollars. Which is precisely the gamble Amazon’s stockholders have made over the last ten years, and who are concerned about its weak returns but fascinated by the explosion in sales. For Facebook, as for Amazon and Google, growth potential seems unlimited.
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