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Facebook IPO goes live Friday. Who's in?

High Binder

Resident Tribologist
Full Member
Minuteman
Jun 18, 2008
495
25
Occupied Colorado
Facebook is set to go public with it's IPO tomorrow (Friday) and opinions on it's valuations are all over the place. I've only once bought IPO and in a VERY limited way and consider myself to be a somewhat knowledgeable but extremely small time investor. Personally, Facebook smacks of MySpace, i.e. a fad that will pass and take investor money with it. Sure Zukerberg and his crew will get rich(er) but I suspect he won't take many other investors with him. He and many of his shareholders have already dumped more of their shares (far more than usually seen in other high profile IPO offerings) in order to raise the IPO price to $38 from $28 just weeks ago. What do you guys think?

http://www.ft.com/intl/cms/s/0/80f2e7a0-9f59-11e1-a255-00144feabdc0.html#axzz1v8jTEKLR


<span style="color: #990000">Typical IPOs see limited selling by management and early investors, as incoming shareholders expect the interests of key board members to remain aligned with their own.

The market for Facebook’s shares is “massively oversubscribed” with especially strong demand by individual investors,</span>

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<span style="color: #000099">
"The $100 billion question is whether Facebook will be a perfect home for advertisers, as well.

Facebook, the social networking giant, is on the cusp of an initial public offering that is shaping up to be a success. There has been such an investor frenzy that the company supersized its offering on Wednesday. It now plans to sell nearly 18 percent of the company to the public — up from around 14 percent — in an I.P.O. that could value the company at more than $100 billion.
Article Tools

Despite the overwhelming level of interest, Facebook is facing fresh concerns over its ability to attract enough advertising revenue to justify that stratospheric valuation. On Tuesday, General Motors, the third-largest advertiser in the country, shut down its Facebook budget, about $10 million, saying that those ads were simply not doing enough to sell automobiles.

For Facebook, the loss of $10 million is not a big deal. The company generated $3.7 billion of revenue last year, 85 percent from advertising.

But the loss underlines the company’s need to convince a skeptical Madison Avenue that Facebook pages are the perfect vehicle for marketers and to convince eager investors that it can increase its advertising revenue, and quickly.

“It’s one of the most powerful branding mechanisms in the world, but it’s not an advertising mechanism,” said Martin Sorrell, chief executive of WPP, the giant advertising agency.

G.M. aside, many companies remain committed to the social media platform as a way to engage and connect with consumers. Advertising executives, industry analysts and institutional investors just aren’t convinced that activity will translate into huge and growing profits for Facebook. It is a concern shared by some of the company’s bankers, according to people with knowledge of the matter.

Companies like Home Depot,Wells Fargo and Merck have a presence on Facebook with their own pages. But they are mainly focused on fashioning content to build brand loyalty, rather than creating targeted advertising.

Even G.M. has said it plans to keep dedicated Facebook pages, stressing that it is an important avenue for reaching car buyers. The automaker just doesn’t want to pay Facebook — a decision that analysts worry other companies could make.

“My colleagues and I have spoken with several other advertisers who were already thinking of putting their dollars elsewhere,” said Melissa Parrish, an analyst at Forrester. “Now that G.M. has done so in such a large and public way, many of the fence-sitters will know that they’re not alone.”"</span>

More at: http://dealbook.nytimes.com/2012/05/16/ahead-of-facebook-i-p-o-a-skeptical-madison-ave/
 
Re: Facebook IPO goes live Friday. Who's in?

No thanks, it is a passing fad. People will buy because of an emotional attachment rather than the actual value of it. Would only think about buying on the very short term to make the most of the hype.
 
Re: Facebook IPO goes live Friday. Who's in?

100 years from now this will be three minutes on a segment of Antiques Roadshow, and the presenter and the expert will have the sorry task of telling the attendee that their old Facebook stock certificate is worth more as ephemera than as evidence of shares held in a commercial enterprise.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: skog</div><div class="ubbcode-body">No thanks, it is a passing fad. People will buy because of an emotional attachment rather than the actual value of it. Would only think about buying on the very short term to make the most of the hype. </div></div>

I suspect that the vast majority of investors will be amateurs who'll in turn see their investments wiped out and we'll see very little if any takers into the mutual fund/retirement sectors which is to say, I don't see any major players investing unless it's to short it or make puts.
 
Re: Facebook IPO goes live Friday. Who's in?

"Facebook’s recent figures raise other red flags. Its ad revenues were lower in the first quarter of this year than in the final one of 2011. Facebook has blamed this dip on seasonality, which is an excuse one expects to hear from a grizzled industry stalwart, not a young web revolutionary. Worryingly, the company has also seen a slowing of growth in average revenue per user,"...

"Investors who buy shares in the IPO will also have to accept that Mr Zuckerberg will continue to control more than 50% of the voting rights. “One person owning so much of a potential blue-chip company is more or less unheard of,” says Debarshi Nandy, a professor at Brandeis International Business School."...

"However, there are good reasons for caution. Several high-profile internet firms that went public last year, including Zynga, a social-gaming company, and Groupon, a coupon-peddler, have seen their shares fall below their IPO prices and stay there (see chart 1). Even seasoned investors find it hard to resist a lemming-like rush to grab stakes in high-profile web firms. “When it comes to consumer-internet companies, enthusiasm often overwhelms pragmatism on offering day,” notes Lise Buyer of Class V Group, an IPO advisory firm."
http://www.economist.com/node/21554532
 
Re: Facebook IPO goes live Friday. Who's in?

I think all these social websites have a shelflife. They probably see the writing on the wall and are cashing in. They won't see a dime of my money, I'd rather buy commodities like brass and lead.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: IronMaidenFan</div><div class="ubbcode-body">God' I'd love to be able to short this thing during the hype phase after it starts trading. </div></div>

That's my plan.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Wolvenhaven</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: IronMaidenFan</div><div class="ubbcode-body">God' I'd love to be able to short this thing during the hype phase after it starts trading. </div></div>

That's my plan. </div></div>

The problem will be finding shares to borrow for shorting. By law, underwriters can't lend out shares for 30 days from the IPO date. That leaves institutional and retail investor's shares. It will be slim pickings at the start.

Buying Puts is another way to go but Facebook options won't start trading until May 29th.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: IronMaidenFan</div><div class="ubbcode-body">
Buying Puts is another way to go but Facebook options won't start trading until May 29th. </div></div>

I suspect a lot of people are thinking about shorting this stock and I would personally like to work in some options but relying on a stocks valuation that isn't based on anything other than speculation and potential (future) ad revenues is just to risky for my money because who knows it might hit the moon and stay there.
 
Re: Facebook IPO goes live Friday. Who's in?

Even buying in and selling same day would be way risky.

I suspect opening bell will see it shoot upwards of $150 a share or more, and then plummet down to about $79 a share.

I wouldn't touch it.
 
Re: Facebook IPO goes live Friday. Who's in?

Other than ads, I don't see how the intend to make money and expand their profits. I read where they are going to offer to prioritize people's updates for two bucks (no idea how long it will last). Sure that'll make some money off of egomaniacs but I doubt that'll be much of an impact.

The only hope I see is if FB can somehow make tweens stay online MORE, they might make more off ads. And with the time I see my niece and nephew on the damn site, FB will have discovered the 25th hour. THAT idea will be worth trillions.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dmg308</div><div class="ubbcode-body">People that buy this are the ones that are sitting on 2000 beanie babies as their 401k. </div></div>

This is funny shit cause I know a guy... (sure as hell ain't me)
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: High Binder</div><div class="ubbcode-body">I suspect a lot of people are thinking about shorting this stock and I would personally like to work in some options but relying on a stocks valuation that isn't based on anything other than speculation and potential (future) ad revenues is just to risky for my money because who knows it might hit the moon and stay there. </div></div>

Bingo. Shorting this stock would be a very scary proposition right now. To paraphrase a wise man - the market can remain irrational far longer than I can remain solvent
smile.gif


It should be fascinating to watch the front-running trading algorithms chew up all the mom-and-pop investors.
 
Re: Facebook IPO goes live Friday. Who's in?

It'll make a thousand millionaires overnight.

And a lot of people feel dumb over the next few years for staying in longer then they should have
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Eric Bryant</div><div class="ubbcode-body">At the moment, I'm feeling pretty good about staying away from this one:

http://money.cnn.com/2012/05/21/markets/facebook-stock/index.htm?iid=Lead </div></div>

looks like it fell off a cliff at the start of trading today.
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: bgbill</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Eric Bryant</div><div class="ubbcode-body">At the moment, I'm feeling pretty good about staying away from this one:

http://money.cnn.com/2012/05/21/markets/facebook-stock/index.htm?iid=Lead </div></div>

looks like it fell off a cliff at the start of trading today. </div></div>

Looks like a little profit-taking followed by the "oh shit, we're up-side down" crowd bailing out. Interesting to see if it rebounds or goes to the bottom. The shows were saying it was 40% over-valued at opening on Friday so I suspect it's going to fall to it's real value and then hover there for quite a while while people feel it out.
 
Re: Facebook IPO goes live Friday. Who's in?

A buddy of mine called and asked for advice Friday on this. I raised my standard questions of business model, profitability, and hype. He texted me today thanking me, haha. He was ready to sink 4k into it so I figure I saved him $600 (he was going to buy at $40/share).
 
Re: Facebook IPO goes live Friday. Who's in?

I was tempted on this a few weeks ago, then I heard the initial offering and laughed my ass off. I might have tried it at 10$ a share but I still don't understand what Facebook actually does...
 
Re: Facebook IPO goes live Friday. Who's in?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gildoom</div><div class="ubbcode-body">Just keeps getting better...

http://www.cnbc.com/id/47523622 </div></div>


"<span style="color: #990000">technical problems</span>" <--haha. Yeah if by "technical" you mean 40% over-valued at opening...

This whole thing is starting to look like a pump and dump, without the pump.