Facebook IPO

[kadee79]

I don't read most of the threads that you guys post on so don't know if this has been a discussion or not.

I'm wondering what ya'al think of it as an investment? I've seen articles going both ways and don't have much experience in this type of investment.
My main concern would be MZ (I can't spell his name) keeping control.

[Driftr]

It wouldn't be something I'm interested in because I won't buy a stock that doesn't pay a dividend.

Judging by the LNKD IPO that I think opened around $83 and is currently about 77, these things may be a little over-priced. I see LNKD did get to 122 at one point so maybe try trading it?

If someone wants to be talked out of buying FB, I suggest reading Denninger's thoughts on the IPO.
market-ticker.org/akcs-www?post=201409

[The Virginian]

IPO's are rigged for insiders. The original stockholders in Facebook and the Underwriters like GS & JPM are the only ones that stand to gain short term. It's best to stay away at least a year before even thinking about getting into the stock!

[kadee79]

Ok Virginian. I was pretty much thinking along those lines as I have seen so many come out & go sky high in just a few minutes and then by the end of a week they are lower than their initial offering price.

A couple of different articles said it "could" be more valuable than Google....operative word there is COULD.

Drifter, lots of good points in that article. I hadn't seen that particular one. And it also reinforced several points made in other articles I read.

[kadee79]

I forgot....

I've seen on several other boards I frequent that a BUNCH of folks are leaving facebook when this "time-line" thing takes effect. They don't like that at ALL! Some techy geeks have already closed their accounts & deleted everything they had every posted on it....and they are hoping that there isn't still a place where it has been stored before they could delete it.

[gavinsnana]

Ok, this may be a lil off topic, but its about Facebook.. I haven't had time to catch up with the news, but what is the changes about Facebook? What did they mean by going public? Is this a good thing or bad thing

[Aman A.K.A. Ahamburger]

Feb 2, 2012 20:53:09 GMT -5 kadee79 said:

I forgot....

I've seen on several other boards I frequent that a BUNCH of folks are leaving facebook when this "time-line" thing takes effect. They don't like that at ALL! Some techy geeks have already closed their accounts & deleted everything they had every posted on it....and they are hoping that there isn't still a place where it has been stored before they could delete it.

I have seen that, and V pointed this out elsewhere as well, twitter is becoming the new hot spot for kids apparently, and like Bruce said, goggle+ is growing.

FB is in a tough spot. At least with LNKD it's business oriented, in the long run, FB really has nothing to separating it from say google+.

[rovo]

The Virginian, Love your new avatat. ;D

Facebook: I go along with some of the others in that it is better to wait a bit before jumping into these new issues.

[rovo]

Facebook IPO: Likes and Dislikes - Analyst Blog .... 11:15a ET February 3, 2012 (Zacks.com)

The Facebook frenzy continues even as the company aims to raise funds through an IPO. Already the world’s most popular social networking platform, Facebook revealed plans on Wednesday to raise $5 billion in an initial public offering. The networking giant intends to use the ticker symbol ‘FB’ but the sock exchange it will trade from is yet unknown. The $5 billion is of course a placeholder amount, subject to changes in the final analysis.

The company has a $75 billion to $100 billion valuation goal that would make it one of the most valuable technology companies in the market, with a market capitalization lagging just a handful of firms, such as Apple (AAPL), Microsoft (MSFT), International Business Machines (IBM), Google (GOOG), Oracle (ORCL), Intel (INTC), and Cisco (CSCO).

Facebook's filing has revealed a profitable and fast-growing business built upon advertising revenue and online transactions. Per the prospectus, the company generated total revenue of $3.71 billion in 2011, up 88% over the prior year and net income of $1 billion that was a 65% increase from the prior year.

But the prospectus also states that CEO Mark Zuckerberg will hold more than one-fourth of the shares in the company. With a voting power of almost 60% of the stock, Zuckerberg will continue to remain at the helm of company affairs.

That’s a greater measure of control than Bill Gates had at Microsoft when it went public in 1986 (with 49%), and far greater than what the co-founders of Google had in 2004 (16% each).

Will Users Turn Investors?

The Facebook IPO filing hit headlines but with ambiguity. No doubt, the company’s trading will take off successfully, but after that, its fortunes will rise or fall depending on whether it can turn its 845 million users into investors.

Facebook’s IPO might meet a fate similar to that of the other high-profile tech IPOs last year. Share prices of both Zynga, the social gaming company and Groupon dropped sharply from their opening-day highs.

Analysts predict that Facebook could be as much as three times more expensive than Google when it launches, and up to 40 times more expensive than the average IPO over the past 40 years. Google had launched its IPO in 2004 at $85 a share, which was highly over priced. However, by mid 2007, prices rose to $500 a share.

Things could, however, be different for Facebook. It’s true that both companies are dependent on advertising models for most of their revenues and have enormous user bases. But the primary difference is that Google offers information, while Facebook offers entertainment. People visit Google when they need to but Facebook when they want to.

The value of a social networking company is directly related to its number of users. So any fall-off in the user growth rate could be a headwind for the company. In the last three months of 2011, Facebook's total monthly active users rose 5.6% versus 10.5% in the last three months of 2010, a significant slowdown. This could dwarf its revenue growth prospects. To avoid such a fate, Facebook will need to develop alternate revenue strategies to keep its growth coming and maintain stability in stock prices.

Additionally, Facebook has reached 60% penetration in the U.S. and U.K., according to the company's own estimates. In order to expand, Facebook should now make efforts to enter countries like China, which is a large potential market. However, things could be tricky since Internet users are generally restricted from accessing Facebook due to government regulations.

Most importantly, the networking giant must now find ways to have its existing users spend more time on the site and advertisers spend more money in order to maintain its dominance.

[The Virginian]

The Virginian, Love your new avatat

Thanks - Would preferred him not smoking but he does look cool! Maybe it will help boost my PM Stock!

[kadee79]

Thanks rovo!
I think that may be one of the articles I read before I posted here.

I'm not going to jump in on this thing...I don't know enough to do that. I'll wait & see what happens when all the employees start selling their stock in 6 mos. after they hit.

[Virgil Showlion]

I'm thinking that like the Friendsters, MySpaces, ICQs, AOL Chats, and so many social networking platforms before it, the fickle masses will discover a new technology, desert Facebook en masse in the space of a year or two at the instant it starts to lose critical mass, and leave the shareholders holding paper worth only a fraction of its original value.

Not worth the risk, especially for a stock with no dividend.

[bimetalaupt]

Feb 3, 2012 20:16:01 GMT -5 @toughtimes said:

I agree with you 100% Virgil. That is how I see it too. Of course, I have a bias towards investing in useful things. A store, a technology, a useful service, but advertising? Come on.

the two tings I heard from the investors who have seen any of the IPO stuff is also the books are rather looking like a new WorldCom.

At a PE of 100 and almost saturated market the only way they can grow income to the bottom line get an increase to the bottom line is to the current users increase the pressure to view all those advertising pin ups and that will not be enough to produce a positive DCF...Rather have AAPL or Goog...I have also heard that after the cash flow numbers were released, many other will jump on the wagon..There is already too many..

2005 we were promoted a small Net work for preforming artist.. At that point there were too many in the space.. Too many trying to get you to hand over all your friend e-mail addresses.. some called themselves professional..(Pun intended)
Just a thought,
BiMetalAuPt

[The Virginian]

Why IPOs are a lousy bet
It's all about rarity of shares.

By Dan Caplinger



I never thought that one of my guilty pleasures would give me investing insight. But something I learned watching a home shopping channel showed me why buying into initial public offerings makes less sense than ever right now.



I'll share that insight later in this article. But first, I want to give some perspective on where the IPO market stands right now.



IPOs are back!
After a several-year hiatus in which we saw relatively few IPOs of any magnitude, initial public offerings are back in vogue. Facebook's IPO announcement last week was just the latest in a big series of companies going public, and you can expect far more IPOs to come if the stock market continues performing well.



But just because IPOs are getting more numerous doesn't mean they're a smart investment. It used to be that going public was a great accomplishment that marked a pinnacle of success for a company. But now, the IPO process is increasingly about prestige and exclusivity rather than actually putting a legitimate price on a company's value -- and IPO investors are the ones who'll suffer in the long run.



What I learned from home shopping
When I channel-surf, I often get stuck on a shopping channel, especially when they're selling coin sets. I like coins, but what draws me to the program is how they market them. The announcer always makes it clear that a coin is part of a relatively small set available, that quantities are limited, and that you should therefore buy now before they're all gone. That rarity is seen as a mark of potential price appreciation for the future.



What does that have to do with investing? Companies going public have taken a page from the home shopping channel and borrowed the same marketing strategy -- turning IPOs into limited-edition stock offerings. But there's a catch that can burn you in the long run.

Rest of Article:

money.msn.com/top-stocks/post.aspx?post=707e65ef-7b96-4e19-a84d-4de97fd8c1f4

[livinincali]

I wouldn't be surprised to see a facebook IPO look like the 1999 internet IPOs as the day traders will be all over it, but as a long term viable business model I'm not so sure. People have made claims that they'll be able to monetize users to the order of $100/user but I fail to see how they get there. That would be more revenue than GOOG pulls down currently. Advertising budgets are only so big. Certainly if they bombard you with ads and similar things people have choices to go somewhere else. I think they can make some money, but I don't think they are on to some kind of revolution to the way people consume entertainment.

[The Virginian]

It's hard to invest in an unproven money model. Kinda of like buying Penny Stocks only paying big bucks for them.

[beenherebefore]

They plan to set themselves up as processors of credit card on line transactions and all those lovely fee's......

[kadee79]

Hi all. Haven't been keeping up with this thread....I should have!

But there seems to be a new "kid on the block", and I can't remember the name of the board but it's the one where you "pin" stuff instead of "like" stuff.
Also been reading a bit more about FB....seems that any site we visit that has a "like" button....transmits info to FB that is stored. You don't have to have a FB account or ever click on the "like" button for this to happen.
Anyone else seen anything on this? Knowing that they can do this really makes me uneasy if it is true.

[bimetalaupt]

Feb 3, 2012 20:09:47 GMT -5 Virgil Showlion said:

I'm thinking that like the Friendsters, MySpaces, ICQs, AOL Chats, and so many social networking platforms before it, the fickle masses will discover a new technology, desert Facebook en masse in the space of a year or two at the instant it starts to lose critical mass, and leave the shareholders holding paper worth only a fraction of its original value.

Not worth the risk, especially for a stock with no dividend.

Rovo and SV,
BUT AT $25.90 WILL THE GROWTH MAKE THIS NUMBER WORTH THE RISK?
BiMetalAuPt...
This is a repost again on

May 18, 2012, 12:06pm, bimetalaupt wrote:

May 18, 2012, 10:03am, bimetalaupt wrote:
from 43 open to 38.01 in minutes..

Now back to 38.61... May 18, 2012, 10:57 A.M. ET

Facebook Opens at $42.05, Gives Up All Gains at $38.01
blogs.barrons.com/techtraderdaily....od=yahoobarrons

What is the Beta.. Best est 3.31


with a PE of only 18.75 Google looks like cheap vs 95 or FB.. With a earning of $0.43 share.. they make five time more on me then they do in China and two time more then they do in Germany!!!..American Buying public is their greatest asset..We had the program to do this in 2001 and declined as I did not think there was enough buying powers in Pianist to pay the bills..Was I right or was I wrong.. A little of each and a little of both.

It is all about M3 and the power of M3 to grow the economy.. M3 growth of 3.3% has me wondering.. Like HNZ or PB?? I remember the hay days of the Nifty 50 and Xerox or Polaroid...then the Dot.com.. i also recall talking to my dad about valuations of the life insurance holdings I held.. Sold them at a profit before the 1972 stock market correction.. Got a great Education and started my MBA on Profits.

Well it is clear Mr. Z. will monetise the PB great PE and buy earnings like James Ling did in the 1960's...He bought everything that was cheaper then his stock. Each buy increased the income until he bought three steel firms..
OUR DCF model produced a value of $71 billion or $25.90 a share..
Best of Luck to him..
Just a thought,
BiMetalAuPt


So is it now time to buy as a very extreme high risk ( 10% gambler part of the system)
I think FTI is at $25 target for 2015!! discount it to about $13 for current!!!
Facebook, Inc. (FB)
-NasdaqGS

25.87 Down 1.03(3.83%) 4:00PM EDT|After Hours: 25.86 Down 0.01 (0.03%) 4:49PM EDT - Nasdaq Real Time Price

[Sum Dum Gai]

I didn't like the FB IPO for all the reasons mentioned in this thread, but I wish I'd had the cajones to short it as a short term play. Forty something percent return in a few weeks. Sweet!

[bimetalaupt]

Jun 5, 2012 18:35:22 GMT -5 Sum Dum Gai said:

I didn't like the FB IPO for all the reasons mentioned in this thread, but I wish I'd had the cajones to short it as a short term play. Forty something percent return in a few weeks. Sweet!

darek,
Yes but stock was not available until today!!.. the firm has to rent the stock and that is now at 50%/year rent. MS has now (today) made the stock opened to short..

Just a thought,
BiMetalAuPt

[bimetalaupt]

Jun 5, 2012 18:35:22 GMT -5 Sum Dum Gai said:

I didn't like the FB IPO for all the reasons mentioned in this thread, but I wish I'd had the cajones to short it as a short term play. Forty something percent return in a few weeks. Sweet!

Dark,
Looks Like UBS lost about $350 million with a trader buying and buying and buying with out getting a conformation .. Million shares lots!!

BiMetalAuPt

[clarkrl2]

Today the price has fallen to $18.26/share. If you believe the analyst estimates for $.63/share earnings for next year and the long term growth rate estimate of 26.91%, then the valuation looks good. I would rather use the trailing twelve months earnings of $.18/share in which case the stock is still way overvalued in my opinion.