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 User Rank
Platinum NO RATINGS 
Scott,
I agree with your thoughts. It really remains to be seen if FB can really generate reveues and profits. there are substantial headwinds I see int he business model. I think we need a few quarters of results ( after being public) to really judge.  User Rank
Platinum NO RATINGS
I know people on both sides of this. I know some who bought in the first day and who continue to buy in as the price drops, they are saying its still a good deal that that it will be double its price a year from now.
I know others who are staying away no matter what, they think the IPO was a flop and the company is destin to fail. I am some place in the middle, I think the stock will eventually go up, just not sure how high it will be able to get.  User Rank
Gold NO RATINGS
The whole thing looks like a badly managed drama. I wonder what is really going on behind the scenes. Guess we would have to wait and see. I like the way you look at the company valuation Scott. The stock did look like it was over valued. Well let's watch what happens next.
 User Rank
Blogger NO RATINGS
Doesn't exactly inspire confidence, does it?
User Rank
Blogger NO RATINGS
@tokyogai,
The issue isn't generating revenues and profits -- they are already doing that -- the issue is sustaining the growth rate. User Rank
Platinum NO RATINGS
I agree- but the IPO was based on forward projections of revenue and profits, so they need to really grow. The headwinds create the problem.
User Rank
Platinum NO RATINGS
Whoever forward projected that revenue had some very rose colored glasses on.....
 User Rank
Platinum NO RATINGS
Morgan Stanley has achieved the near impossible: They've made Goldman Sachs look good!
 User Rank
Blogger NO RATINGS
It get worse. Throw in a SEC investigation, the confusion in trading, Galvin (MA) subpoena, the leak of the analyst rerport, then you have a shareholder lawsuit and $800/hr security lawyers get hired, management gets sidetracked etc etc. Do the banks have to make up the $8 loss from IPO price?
Whomever ran this book at MS was a rank amateur. Massachusetts subpoenas Morgan Stanley for Facebook | Reuters User Rank
Platinum NO RATINGS
@Rod Raynovich, you are SO right about it being amateur hour at Morgan Stanley as far as bringing the IPO to market. But I really would not have figured that anyone in his right mind would be looking to follow Henry Blodget's career path.
I'm really speechless! User Rank
Blogger NO RATINGS
And the professional Smith-Barney retail brokers have to put up with this crap.
User Rank
Blogger NO RATINGS
Funny you mentione Henry Blodget... because he is now in fact the successful publisher of a big blog/aggregation site... where he writes critically about the activities of Wall Street analysts.
http://www.businessinsider.com/exclusive-heres-the-inside-story-of-what-happened-on-the-facebook-ipo-2012-5 User Rank
Platinum NO RATINGS
@Scott, it was F. Scott Fitzgerald who famously said, "There are no second acts in American life," but he was dead wrong about Henry Blodget. I knew about his successful blogging career, but I also know that he was barred for life from the securities industry for his subterfuge at Merrill Lynch.
All things considered he has made lemonade out of lemons and I applaud that. If--as a former insider--he can help shine a light on the places where the Chinese Wall is crumbling, that is penance enough for me.  User Rank
Platinum NO RATINGS
This is why smaller investors should stay away from IPOs.
Now that Facebook is public, they will need to meet revenue/profit targets as do other public companies.  User Rank
Platinum NO RATINGS
The coverage leading up to the event seemed to be way out of proportion. Even people I know who never follow the market were drawn in by the hype.
User Rank
Platinum NO RATINGS
Interesting article in the New York Times yesterday about whether Mark Zuckerberg and his new bride, Patricia Chen have a pre-nup. Other than its tabloid curiosity value, I found the question interesting because he got married the day AFTER the IPO. The thinking is that under California community property laws, his Facebook assets pre-dated his marriage and therefore stay entirely in his column as opposed to being shared. What a romantic HE is!
http://www.nytimes.com/2012/05/22/technology/zuckerbergs-property-status-post-marriage.html User Rank
Blogger NO RATINGS
Well, I think it's obvious why he got married the day after the IPO because California is a communal property state but says everything you earned prior to the marriage is yours.
I wonder if he's going to stick the new wife with post-IPO losses? ;-) User Rank
Platinum NO RATINGS
But wait Scott,
If Mark Z knew FB would double in a year, he would want to wait another year before getting married. Maybe he doesn't think it's such a good buy? User Rank
Blogger NO RATINGS
Uh-oh, good point!
I don't know if I had a net worth of $15B+ I would find it difficult if I started making personal decisions on the basis of how many billions it would make or break me. After the first $1B, does it matter? That's why I think Eduardo Saverin is a greedy and dishonorable person for what he did. He came to America, he got rich, he lived the American dream. The least he could do is pay us a few extra million in taxes.  User Rank
Blogger NO RATINGS
You guys are wrong. It's not about community property.
He got married the day after the IPO mess to take attention off the negative things surfacing about it and simultaneously generate more publicity for Facebook. If the IPO had gone well, he'd have waited and planned a real wedding. What self-respecting mega-billionaire gets married in a blue suit in his backyard before less than 100 guests? Nope, seems to me like it was a rush to deflect attention from stuff Mark didn't like everyone seeing. My prediction: He's going to grow the company's users by opening Facebook to anyone of any age, even kids under 18. What better way to see a spike in total users? User Rank
Platinum NO RATINGS
I think @Noreen has read the tea leaves exactly right, not only about MZ's ultra-romantic wedding motives but about the need for Facebook user growth.
Only problem is...this article says it is not, not, NOT sustainable, no matter how many dogs, cats and hamsters get their own profiles this coming year. Apocalyptic but fascinating read: http://www.technologyreview.com/web/40437/#.T7ukj-GdYbw.email User Rank
Blogger NO RATINGS
Agreed, Street Smart. Pinterest is already proving users are all too eager to move to the next big thing.
 User Rank
Iron NO RATINGS
It is just mind boggling that the IPO of the what-- decade? century? -- devolved into the IPO mess of all time. What does this say about the future of the company? If the leadership could not even get its IPO done right, I have little faith in its ability to protect its shareholders in the future.
User Rank
Platinum NO RATINGS
@Noreen--
Pinterest is a great example of active clicks versus sheer size of the user base. I couldn't get enough Pinterest when I first joined, but now the self-referential nature of the same content over and over has made it totally ho hum. And don't forget with Facebook that if your pet is like mine, (s)he may have his or her own profile, but isn't doing much shopping day to day. (At least I hope not!)  User Rank
Platinum NO RATINGS
Every time I think about Facebook, I get an uneasy feeling we're all being scammed -- like the people who fought for seats in the Twilight Zone episode "to serve man"
User Rank
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@Noreen
I don't know that's even more cynical thinking than even I'm prone too. Don't think think he had to have known he was going to get married at least a few days before the IPO? He must have made some plans at least to alert people to be there. User Rank
Blogger NO RATINGS
Scott, he's a billionaire and it was a hundred people. He had an off the rack suit and her dress did not appear custom made. How hard could it be to get a small party together?
User Rank
Blogger NO RATINGS
Just saying, I don't really think he made the decision in 48 hours! Of course I could be wrong.
Off-the-rack suit is a significant upgrade from a hoodie! User Rank
Blogger NO RATINGS
Good point Scott. You win.
User Rank
Platinum NO RATINGS
Ok. we're getting more infomation: The wedding had been in the works for months, a friend of the couple told the Associated Press; the fact that it came one day after Facebook debuted on the stock market was entirely coincidental.
But still... Why plan a wedding for the same time as the IPO? Aren't both things important enough to deserve full attention for a time?  User Rank
Iron NO RATINGS
Maybe we can blame the IPO issues on Zuckerberg's preoccupation with his pending marriage!
User Rank
Platinum NO RATINGS
Forget the wedding! Do you think Mark is wearing an "I got Zucked" t-shirt on his honeymoon? I hear they're all the rage!
http://www.theweek.co.uk/technology/facebook-ipo/47090/investors-sue-after-getting-zucked-facebook-ipo User Rank
Platinum NO RATINGS
Cat Tail,
Very Good point. My feeling is the Lady nagged him ahout it so much he decided to get it over with ASAP. Regards Ashish. User Rank
Platinum NO RATINGS
Noreen,
What matters more to Investors is not Total number of Users,rather Total Number of Paying Users. So even if they do open it up to everyone below the age of 18 ,I am not sure how Current Valuations will still be sustainable. Regards Ashish. User Rank
Platinum NO RATINGS
Scott,
The important thing is How much Cash does he Have on Hand today(which is not tied up in FB Stock)? Its one thing saying he a Billionaire,but if all his Wealth is just tied up in the stock that makes it very doubtful,After all that Stock Valuation(which is 16% Down today) could go Down even more over the next month or so. Ok I got some numbers,Mark Zuckberg Personally sold 30 Million shares in the IPO,to raise USD 1.14 Billion.Apparently most of it will go towards paying his Tax Bill!!! Leaving very little spare. As for the case of Eduardo Saverin-Its not like he is going to exit the US Scot-Free,he will most Definitely be Paying Exit Taxes(close to 700 million USD),if I remember correctly. But at the end of the day,its his decision what he wishes to do with his Money and His Life.If chooses to spend it elsewhere,You can't stop Him. Unless you are prepared to implement Full Capital controls. Regards Ashish. User Rank
Blogger NO RATINGS
@Ashish
Yes I guess Zuck is really broke. He only has a spare few hundred million in liquid net worth. LOL! I still think te Eduardo saga is ridiculous. Renouncing citizenship on the country that made you rich, all in order to dodge some taxes. --Scott User Rank
Platinum NO RATINGS
Scott,
I understand what your driving at here regarding Eduardo,but I was more interested in what you think about the Michele Bachman controversy. She gave up her Swiss Passport because of the uproar she had to face in DC. I thought she was dumb. But then her Hubby still has a Swiss Passport,so for sure he can take her back to Switzerland in case of an emergency!!! If History has taught us anything,its always a Good option to have an escape route in case things don't go according to plan. Regards Ashish. User Rank
Platinum NO RATINGS
Interesting blog post arguing that the astronomical returns on social media are actually having a negative impact on funding other innovation in Silicon Valley, as well as other sectors such as pharmaceutical development and alternative energy.
Maybe Facebook's stumble will have a longterm postive effect? http://steveblank.com/2012/05/21/why-facebook-is-killing-silicon-valley/ User Rank
Blogger NO RATINGS
It's true, VCs move in packs, and this is drawing capital away from other important areas. Example: Networking! There has been a significant decline in VC investment in newtorking gear. Somehow they are going to have to move all those Facebook bits. They'd better figure it out.
User Rank
Platinum NO RATINGS
Street Smarts,
Interesting. I was pretty sure,Insane Valuations in Social Networking were Harming the Capital Markets just not just sure which area. Thanks for sharing. My feeling is they still wont learn. Why is that? They invest before an IPO,not afterwards.A significant number of them exit the Company at the IPO stage(rather than Hold onto the Stock);but then maybe they thought FB was different... If so,Wait till FB hits 20 Dollars,Thats when they will learn. Regards Ashish. User Rank
Platinum NO RATINGS
This just in from the Borowitz Report! Friend Facebook NOW!
http://www.borowitzreport.com/2012/05/25/a-message-about-facebook/ User Rank
Blogger NO RATINGS
Too funny!
User Rank
Platinum NO RATINGS
For better or worse, for richer for poorer, $38 is SUCH ancient history! But what are analysts saying about Facebook from here on out?
Great roundup of estimates and the thinking behind them from the LA Times: http://www.latimes.com/business/la-fi-facebook-price-20120526,0,7319313.story User Rank
Platinum NO RATINGS
Scott,
How about asking them to pay an Annual Dividend of say 25- 50 cents First? Let the Company Demonstrate a decent enough History of Reliably Rewarding Shareholders through Dividends,then I might get interested. They claim to have 3Billion Cash on their Balance Sheet,so instituting a Small Dividend as a Policy of Rewarding Shareholders should'nt be a Bad Idea right? You can keep rest of the cash for all your planned expansion projects(incl.Buying Opera Web Browser). The moment I start seeing a Regular Dividend Paying History,I get interested,everything else is just Vaporware. Regards Ashish. User Rank
Platinum NO RATINGS
Nobody seems to be clicking the like button over the new controversy that the Zuckerberg wedding has ignited: The size and provenance of THE RING! Is it too small? Is it a natural Burmese "blood" ruby (so named because of conflict in the region, not color)? If so, did MZ break the law to buy it? If not, is it a treated stone, and therefore less valuable?
Cause for another class action suit perhaps--disappointed brides blaming Facebook for their downscaled bling? http://shine.yahoo.com/fashion/priscilla-chans-ruby-ring-193400700.html The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose. |
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