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/
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>
----------------------------------------------------
<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/
