I wasn’t a fan of Facebook IPO, I mean, $38/share? It’s one thing to be hopeful and another to be an emotional fool.
What you see now is a correction because everyone that could make money (bankers, lawyers etc) have been paid, let me add, handsomely.
Let’s be clear here, Facebook’s revenues grew 32%. That said, investors are not happy. Stock closed at $21.09 yesterday; 21% drop since July 27th, day after the earnings announcement. 45% drop since the IPO.
Facebook is not your conventional company. Its business model revolves around analyzing ginormous amounts of user data and then innovating mechanisms to monetize it. As of June 2012, it had 872 million active users, but not customers. Its customers are advertisers and we the users are the product being sold.
Facebook is a media network, similar to Google, not a social network. It happens to have a social component, that’s about it. It should be treated similar to any other media network dependent on advertising revenue.
That said, Facebook is worth $9/share as of this writing.
It’s very simple math.
Take yesterday’s closing price, $21 x shares outstanding of 2.74 Billion = $57 billion. But it is not worth $54 billion because it’s 2011 revenue was $3 billion. In tech industry, stocks trade at an average 8 times (conservative) the revenue. Revenue times 8 gives us $24 Billion. That means the market price of its stock should reflect that reality but it doesn’t because if it did, the stock would trade at $9 ($24 Billion/2.74 Billion shares outstanding).
That doesn’t mean Facebook is a dud, it’s not, just overvalued.
Here’s some radical advice for Facebook.
Take the company private, charge 99 cents for monthly access, keep the ads on free accounts, and concentrate on retaining top talent.
Siri in Hindi means “Godess Lakshmi” or “Godess of Wealth.” In Norwegian it means, “Beautiful and victorious.” In Swahili it means, “Secret.” 
I came to United States in the mid 90’s and was at the age where I was very fluent in Urdu. After spending about six months, taking initial ESL classes, I was able to speak English fluently. My father, however, kept a strict rule at home that we speak Urdu 99% of the time. Now fast forward to 2007, this is the year when I became a father to a beautiful son. I remember that I was constantly thinking about the upcoming generation and the responsibility that had been bestowed upon me and my wife as parents.
Now fast forward to 2010 when I noticed that my son really loved using the iPhone. I downloaded a lot of learning apps for him, mainly in English, even though my wife and I encouraged him to speak Urdu at home. I remember my son would often ask us a question, “papa is ko (iPhone ko) Urdu kyu nahi ati?” (Papa why does this (iPhone) not know how to speak Urdu?). That was the time we started to focus on iPhone and iPad application development for kids specifically for Urdu speakers. You may ask why not try to build the app for young adults? Our primary reason for keeping focus on kids is that they adapt to new tools and language more rapidly as compared to Adults.