Facebook going public..

[Solkern]

Do you think it's worth what they are currently valuing it at?

[Parkbandit]

No.

[Back]

Over but still worth buying.

[Buckwheet]

I subscribe to Waren's thoughts on this one and will not be investing.

[Suppa Hobbit Mage]

I subscribe to Waren's thoughts on this one and will not be investing.

If you have a 401k, you are probably investing...

But yeah, I don't think it's worth much, but it will make a lot of people rich. The co-founder dropped his US citizenship so he doesn't have to pay taxes on all the money he's about to make. What a cock.

[Back]

But yeah, I don't think it's worth much, but it will make a lot of people rich. The co-founder dropped his US citizenship so he doesn't have to pay taxes on all the money he's about to make. What a cock.

Don't hate the player. Is all I'm saying. Word.

[Parkbandit]

But yeah, I don't think it's worth much, but it will make a lot of people rich. The co-founder dropped his US citizenship so he doesn't have to pay taxes on all the money he's about to make. What a cock.

Why? He will save millions by dropping his US citizenship and getting it where he currently lives. He wasn't born a US citizen.. and he doesn't live here anymore either.

I don't blame him.. I blame the tax system that is in place that makes it a smart move for him to leave. It's the same system that makes companies leave the US to go elsewhere.

[Buckwheet]

If you have a 401k, you are probably investing...

But yeah, I don't think it's worth much, but it will make a lot of people rich. The co-founder dropped his US citizenship so he doesn't have to pay taxes on all the money he's about to make. What a cock.

Okay I am not choosing to invest more money that I have control over.

[Archigeek]

I haven't looked at the latest valuation, but Facebook is pretty much a giant cash cow. No one else has access to as many potential customers or the pinpoint details about those customers. They are/will be the king of internet advertising. So the real question is, what is THAT worth? They have released income info, and their income is legitimate.

[Tgo01]

GM pulled its 10 million dollar Facebook ad campaign today. (http://www.dailyfinance.com/2012/05/15/gm-kills-10-million-facebook-ad-campaign-because-it-didnt-work/?icid=maing-grid7|main5|dl3|sec1_lnk1%26pLid%3D161150)

[Archigeek]

Another good read on the subject:

http://www.businessinsider.com/the-facebook-ipo-23-crucial-facts-about-its-1-billion-ad-business-2012-5?utm_source=inpost&utm_medium=seealso&utm_term=&utm_content=3&utm_campaign=recirc

[Mighty Nikkisaurus]

This thread prompted me to remember that Solkern posted pictures of his own dick to the PC, so I took a stroll through memory lane (http://forum.gsplayers.com/showthread.php?t=36870).

My contribution to the thread was, largely, penis. I regret nothing.

[diethx]

Hahaha I remember that photo. So tempted to use the pic AR shopped as my avatar now.

[Parkbandit]

This thread prompted me to remember that Solkern posted pictures of his own dick to the PC, so I took a stroll through memory lane (http://forum.gsplayers.com/showthread.php?t=36870).

My contribution to the thread was, largely, penis. I regret nothing.

Damn, where was I when that blew up?

[Latrinsorm]

This thread prompted me to remember that Solkern posted pictures of his own dick to the PC, so I took a stroll through memory lane (http://forum.gsplayers.com/showthread.php?t=36870).

My contribution to the thread was, largely, penis. I regret nothing.Up to Jenisi's first post and g++'s response: "oh thank god, i thought i might actually end up doing some work this afternoon"

Top comment so far imo.

[Androidpk]

Splat!

http://www.huffingtonpost.com/2012/05/21/facebook-share-price-slide-pre-market_n_1532554.html

[Archigeek]

Has anyone actually sat down and done a valuation analysis to see what they think it's really worth? Based on the information we know on income and projected growth, what do you think the company is worth? What should the P/E be? It could be an interesting exercise. If I had the cash to invest right now I'd probably do it just for fun if nothing else.

While it may be over-priced, I also think people aren't really taking a look at the income sources and where income can be expected to grow. Their management team has shown an ability to adapt and to turn their massive customer base into a revenue stream so far. One of the first things I'd do is integrate search, and send one across Google's bow. They could also start charging for corporate pages, as they are currently free advertising. There a lot more places they can find revenue stream.

The pundits want to pan the stock because it isn't an IPO that went through the roof on the first day, "oh no's, it's day two and isn't 2x the opening price!" Our attention spans are so short; we want a home run, and if we can't get it, we want a failure story, and now! I guess if I was really considering buying I'd figure out a P/E target based on a few new revenue streams and continued growth in the advertising they're currently doing. Then compare that to the P/E they've priced into it and see what the difference is... largely the same thing I'd do with any stock.

[Parkbandit]

What a fucking mess this IPO is in.

I do think it's hilarious that Zuckerberg decided to get married AFTER FB went public.

[Parkbandit]

Buy.


Buy.


Over but still worth buying.

Stock IPO price: $38.00
Stock price now: $26.90

This is why you should never take stock advice from Backlash.

Or asking his advice on how to build your own computer.

[Back]

Sure, it took an initial hit, but for the long term I believe it will be good to have.

[Suppa Hobbit Mage]

Sure, it took an initial hit, but for the long term I believe it will be good to have.

Based upon what, exactly?

[Parkbandit]

Sure, it took an initial hit, but for the long term I believe it will be good to have.

Have you even bothered to look at the growth they are saying they have to reach in order to meet Wall Street's expectations?

Name a worse performing IPO in the past 10 years.

Oh, and this is why I bumped this thread:

http://www.cnbc.com/id/47674474

Facebook Will Disappear in 5 to 8 Years: Analyst


Facebook will lose dominance as a major web company in less than a decade, Eric Jackson, founder of Ironfire Capital said Monday on CNBC's Squawk on the Street.

"In five to eight years they are going to disappear in the way that Yahoo has disappeared," Jackson said. "Yahoo is still making money, it's still profitable, still has 13,000 employees working for it, but it's 10 percent of the value that it was at the height of 2000. For all intents and purposes, it's disappeared."

Jackson said there have been three generations of web companies. The first generation was big web portals, such as Yahoo [YHOO 15.01 0.09 (+0.6%) ], where content was aggregated in one place. The second was the social web with Facebook [FB 26.90 -0.82 (-2.96%) ] and the third generation is companies focused entirely on monetizing the mobile platform, something Facebook will continue to struggle with, Jackson said.

"When you look over these three generations, no matter how successful you are in one generation, you don't seem to be able to translate that into success in the second generation, no matter how much money you have in the bank, no matter how many smart PhDs you have working for you," Jackson said. "Look at how Google [GOOG 578.59 7.61 (+1.33%) ] has struggled moving into social, and I think Facebook is going to have the same kind of challenges moving into mobile."

Last month Facebook acknowledged its mobile challenge in a regulatory filing. The company stated that the growing number of mobile users using Facebook is hard to monetize and "may negatively affect our revenue and financial results."

Jackson's comments on the future of the social network come at a time when Facebook's stock is down about 27 percent from its IPO price of $38 a share, making it the biggest two-week loss of any IPO since 1995.

"The world is moving faster, it's getting more competitive, not less, and I think those who are dominant in their prior generation are really going to have a hard time moving into this newer generation," he said. "Facebook can buy a bunch of mobile companies, but they are still a big, fat website and that's different from a mobile app."

[Bobmuhthol]

Facebook was (and is still kind of) a good website but a terrible business. I knew the IPO would be too high, and it's probably still too high after that 30% loss. The idea that it would be good in the "long term," even if accurate, does not change the fact that buying it at $38 would be monumentally stupid when you can wait a few days and pay $27.

[Soulpieced]

I've got a few $$$ on Groupon long put options. Facebook tanking has helped me a bit, though they probably don't need any help going down now with the post-IPO lockup expired.

[Back]

Without doubt the initial hit was brutal. I thought it would be good for the long term. I don't think FB has been utilized the way it could be from a grassroots perspective. The people working on it are coming up with good new ideas at the forefront of social media that is only going to expand over the next few years. If they are smart, and they are, they will continue along that road for a while and we will see positive expansion and stock prices rising.

Of course, they could just sell out to stockholders while they are at their peak losing any kind of drive to explore new horizons in technology and retire. Wait...

[Mighty Nikkisaurus]

I think Facebook could end up getting fucked on the privacy issues. Google really botched the release of Google+ but I think had they not, it could have done to Facebook what Facebook did to MySpace.

Beyond just that, we're still kind of in the frontiers of social media marketing, which is to say if you buy ad space on Facebook you're probably not going to actually be generating more than brand awareness rather than direct revenue because the primary demographic on facebook doesn't click on ads. For now it's not a huge issue but as time goes on there's going to be more of a tug-of-war between users wanting privacy and companies wanting data on their target demographics. Facebook is really clunky and inelegant about dealing with this exact issue, which is a pretty substantial risk factor.

[Parkbandit]

Facebook (http://markets.ft.com/tearsheets/performance.asp?s=us:FB) shares swung to a new all-time low in after-hours trading as its first earnings report as a public company showed a continued slow down in revenue growth and flat profits.
Shares in the social networking group fell more than 10 per cent to hit a low of $23.84, compared with the issue price of $38 in the company’s initial public offering in May.






They had already fallen 8.5 per cent during the day after the poor results of Zynga (http://markets.ft.com/tearsheets/performance.asp?s=us:ZNGA), the gaming company, which is built on Facebook and blamed a drop in its revenues (http://www.ft.com/intl/cms/s/0/77e9de66-d6a9-11e1-bd9c-00144feabdc0.html#axzz21T6jOrfQ) on changes to the social network that favoured competitors.
“We’re disappointed with how the stock has traded but we’re staying focused on the fact that we’re the same company as we were before,” said David Ebersman, Facebook’s chief financial officer.
Overall, the company reported a second-quarter loss of $157m, or 8 cents a share, mainly due to costs related to stock-based compensation expenses (http://www.ft.com/cms/s/2/d6599ae0-5738-11e1-869b-00144feabdc0.html)associated with the IPO. This compared with net income of $240m, or 11 cents, in the year-ago quarter.
Total revenues stood at $1.18bn for the quarter, in line with estimates analysts had set after Facebook issued warnings that its mobile advertising was not growing as fast as mobile usage (http://www.ft.com/intl/cms/s/0/f0ec9dcc-500c-11e1-a3ac-00144feabdc0.html#axzz21T6jOrfQ).
Revenues grew 32 per cent year-on-year in the second quarter, a deceleration from growth of 45 per cent in the first three months of 2012.
The company continues to spend aggressively, as it works to maintain an edge over competitors by investing in research and development, hiring new talent and compensating existing employees.
Costs almost tripled to $1.93bn, driven mainly by the one-time cost of share-based compensation expenses and associated taxes.
Facebook executives indicated that the spending would continue, particularly as the company added more engineers to its headcount, which is just under 4,000 people.
“We’re working hard to staff-up across the company, especially in the tech groups,” said Mark Zuckerberg, chief executive, who took part in a conference call (http://blogs.ft.com/tech-blog/2012/07/facebook-disappoints-liveblog/#axzz21lM17vec) with analysts after the results.
Earnings per share, excluding the employee compensation and other items, were 12 cents, the same as the second quarter last year, and in line with analyst expectations.
The majority of Facebook’s revenues – 84 per cent – come from advertising, generating $992m for the company in the second quarter.
Several new ad products introduced in the last three months did not succeed in boosting advertising revenue growth, which slumped to 28 per cent, down from 36 per cent in the prior quarter and 48 per cent in the quarter before that.
Although mobile advertising has not grown as quickly as mobile usage, executives repeatedly noted the potential of Facebook’s newest mobile ad unit, which highlights products users have “liked” or commented on in their friends’ mobile newsfeeds.
“Our initial testing shows really promising results,” said Sheryl Sandberg, chief operating officer, saying the product is generating about half a million dollars a day.

http://www.ft.com/intl/cms/s/0/7d7c7a6a-d761-11e1-a378-00144feabdc0.html#axzz21otJSc2J

[Parkbandit]

Facebook's share price dipped below $20 on Thursday after reporting slowing growth and an admission of an alarming number of fake accounts.
In a quarterly filing (http://www.sec.gov/Archives/edgar/data/1326801/000119312512325997/d371464d10q.htm) with the Securities and Exchange Commission, the social media company said that as many as 83 million (http://www.afp.com/en/news/topstories/facebook-growth-clouded-83m-dubious-accounts) of its accounts are fake.
It also reported that as many as five percent of its active users have duplicate accounts.
Facebook members grew to 955 million this year.
It says 1.5 percent of its accounts are likely spam or accounts set up for other malicious activity. The fake accounts are concentrated in developing markets, according to the filing.
It also blames people who set up accounts for non-human entities, such as pets.
There are "inherent challenges" in measuring usage," the social network said.
"We are continually seeking to improve our ability to identify duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by improvements or changes in our methodology," the filing continued.
The number of real users is important for Facebook as it seeks to sell advertising.
Facebook shares are down almost 50 percent from its $38 May IPO.


Read more: http://www.myfoxny.com/story/19180366/facebook-admits-millions-of-accounts-are-fake#ixzz22QFziQus

[Archigeek]

Really? There's alarm that nearly 10% of all accounts are fake in one way or another? Accounts for pets?!? On the internets? OMG!

Seriously though, I'm still a fan of this company, though not a buyer of the stock. If I were in a position to buy stocks, (read: I had any cash I wasn't funneling into my own business), I would have formulated a strike price by now and it would be on my watch list. I am a fan of investing in companies that aren't quite meeting expectations because of the shear volume of their customer growth. They may not have quite figured out a revenue model that works yet, but they still have nearly a billion users.

I'm curious to see an analysis of what you guys think the company is worth. It's easy to bash a company, but lets see your math. If it's not worth 20 bucks a share, what is it worth and how are you reaching that conclusion? A value investor wants to know.

[Bobmuhthol]

facebook has a market cap of $43 billion now, so it would have been in the neighborhood of $80 billion at issue. Even now it has a P/E of 112. It should be fairly obvious to anyone who can see through bullshit that facebook would be overvalued on hype alone. If I had the account and the capital for it, I would have shorted immediately. There's no real earnings potential. Ads? There are sites that get more traffic, so no advertisers need to spend any more going through facebook than they would elsewhere. I imagine Zynga is having a party but I get a little sick just thinking about people paying for facebook games.

As far as putting a value on the company, the nice thing about markets is an investment bank already did that for me. I just have to be right about the direction.

[Archigeek]

facebook has a market cap of $43 billion now, so it would have been in the neighborhood of $80 billion at issue. Even now it has a P/E of 112. It should be fairly obvious to anyone who can see through bullshit that facebook would be overvalued on hype alone. If I had the account and the capital for it, I would have shorted immediately. There's no real earnings potential. Ads? There are sites that get more traffic, so no advertisers need to spend any more going through facebook than they would elsewhere. I imagine Zynga is having a party but I get a little sick just thinking about people paying for facebook games.

As far as putting a value on the company, the nice thing about markets is an investment bank already did that for me. I just have to be right about the direction.

I put very little faith in valuations by investment banks. Usually their glasses are so rosey that their ideas on value are basically worthless. Additionally, it's a lot harder to get great returns when you don't do your own research and instead just follow someone else's, because someone else will always have made that decision first.

As for the PE: generally I would agree with you, and normally find it hard to rationalize PE's in excess of 100, or in excess of 50 even. That said, I missed a lot of earnings by not investing in Apple that has often had a PE that high. When a company's earnings are growing rapidly, it becomes a lot more difficult to make sense of where real value is, because it is changing so quickly.

[DoctorUnne]

The problem with FB is its revenue growth is decelerating way too rapidly for a company with a >30x P/E. You need sustainability of the growth rate for several years in order to command that kind of multiple. Or at least you need a slower pace of deceleration. FB grew revs 154% in 2010 and 88% in 2011, but Q1 2012 was 45% and Q2 was 32%. After 2011 people probably thought it would go like 50% in 2012, 35% in 2013, 25% in 2014 etc. After Q1 people thought 40% in 2012, 30% in 2013, 20% in 2014. Now after Q2 I'm looking at a sell side report that forecasts 28% in 2012 and 20% in 2013. Those kind of changes CRUSH high multiples and hence the stock. The flip side is if they all of a sudden accelerate, then people will think wait a minute, maybe it's 40% in 2012, 35% in 2013, 30% in 2014, and then the stock will roof it.

At the current point of the life cycle of the company, no one cares what they make right now, or even what the current growth rate is. It's all about the perceived trajectory of that growth rate because there's so much uncertainty beyond the next couple of years. If you want to make money on this stock long, you want to develop a view on when the growth rate stabilizes and get in just before that point. If you want to make money short, get in right before the quarter that shows more deceleration than people forecast. Predicting that is a lot easier than trying to figure out whether FB will be worth $10B or $100B long-term.

Tech investing is not for the faint of heart, but you can make a shitload of money if you do good fundamental analysis and you're right because companies have ridiculous growth rates and very short life cycles, so the volatility in the stocks is huge.

If you guys don't want to do the research yourselves then put all your money in V and MA, forget about it and then come back in five years and thank me.

[Archigeek]

A pretty solid observation I'd say doc. I made very good money off of AMD, and boy was it a roller coaster ride. You really had to pay attention to the cycle, (it was a very cyclical stock at the time), and accept that you might get burned. The payoff was 500-600% profit, the downside might be a 75% loss.

I think FB is just such a young company that predicting where its revenue growth is going to go is very hard to predict. I don't believe it's going to be very linear, that's for sure.

[Back]

Stock IPO price: $38.00
Stock price now: $26.90

This is why you should never take stock advice from Backlash.

Or asking his advice on how to build your own computer.

Even if you bought at the opening price you would have almost doubled your investment today.

Jackass.

[Parkbandit]

Even if you bought at the opening price you would have almost doubled your investment today.

Jackass.

And if you put all your money into it then, you would have an extra $30 to your name!

Dumbass.

[DoctorUnne]

If you guys don't want to do the research yourselves then put all your money in V and MA, forget about it and then come back in five years and thank me.

And you'd have made even more money in V and MA than buying FB!

Since FB IPO:
FB +59%
V +58%, +60% including dividends
MA +87%
S&P +43%

[Archigeek]

Poor boring old me. I invested in Fastenall and some boring drilling companies instead.