ipo


Forgetting about whose fault all this is, what a fucking disaster. That is a fair chunk of capital to destroy, in a time when capital is scarce.

Facebook is fast turning into a hated stock. I wonder if the public failure of FB, if in point of fact it does fail, will actually impact the business?

When you have to report earnings every Q, the expectations, the analyst upgrades/downgrades, the Hedge Fund managers that can move stocks, Einhorn, Chanos, their negative views, if they vocalise them, will have an impact on the stock, which, if it is held widely by retail, will soon induce distaste, for the stock certainly, but also potentially the entire Facebook platform, which leads to slowing growth…

People also seem to understand there’s no such thing as a free lunch, even online, summarized by the truism “If you’re not paying for something, then you’re not the customer—you’re the product being sold.”

Facebook sells access to information about its users that advertisers, in theory, can use to make just the right offer at the right time to the right people. Google uses data in the same way, but it has the big advantage over Facebook that many uses of Google are based on an intent to buy something. A search for “swimming pool caulk” is a search to buy something, whereas friends updating each other on Facebook probably aren’t looking to buy anything, making advertising less effective. General Motors recently announced that it would pull back its advertising on Facebook.

As the Internet matures, privacy issues may fade as social media companies focus less exclusively on advertising revenues. Facebook brags on its home page that it’s “free and always will be,” but it quietly launched a test in New Zealand this month for an option called Highlight that gives users the chance to pay two New Zealand dollars (about U.S. $1.50) to ensure that friends see their post by keeping it toward the top of the friends’ feed.

Now if you are actually willing to pay real money for this crock-of-shit, then, you truly are one of the retarded.

I guess the Zuck has made his money. Personally, I think Facebook is the refuge of the mentally deficient. Posting photographs and drivel about walking the dog. We’ll see, but taking it public at such an inflated price, could be ultimately creating its own demise. Let’s hope so.

Boring. After all the hype, totally lame. Personally you wouldn’t catch me dead using FB. At something like 100X earnings, yeah, this will run.

Update

I can’t believe what I just witnessed, can’t wait to hear the press coverage. Long story short, sellers began overwhelming the tape once $FB broke back below 40 this afternoon, but the underwriters managed to hold the line at 38-38.01 into the close. God knows what kind of firepower it took, it was an amazing thing to watch.

Like a car wreck, you just can’t help yourself.

So just how big is the Facebook IPO? In global terms, it’s still a big deal, which underscores the rising importance of either China or the rate of inflation, take your pick. In the US it’s big. In Tech, it’s the elephant in the room.

If Facebook launches at $90 billion, it will command almost half of the market capitalization of Google, but with just one-tenth of the projected income.

“If media estimates are right and the company is valued between $75 and $100 billion, Facebook would be among the 70 largest publicly traded companies,” said Charles Rotblut, editor of the AAII Journal.

Rotblut estimated the company’s net income to stand at $668 million — based on a calculation of Class A and B shareholders rather than the firm’s baseline net income figure of $1 billion — “Facebook will be offered at a price/earnings multiple of 150, a sky-high valuation is for a company whose CEO has limited managerial experience.”

Facebook also has to contend with the headwinds that have hit social-media IPOs. Companies such as LinkedIn Corp. LNKD +0.59% , Groupon Inc. GRPN +0.04% , Pandora PNDZF -0.43% and Zynga Inc. ZNGA +0.22% have looked good on paper, but have struggled since opening day.

It’s a concern. Personally, not interested, I think facebook is for morons anyway, never mind buying the stock.

Never used it, never would.

Having said that, I’d never buy stock in it either. The current valuations, unlike the GOOG IPO, which I was also wrong on it must be said, will not live up to the hype currently surrounding this POS.

Now the latest wave of Internet start-ups are adding their own particular yardsticks to the valuation vocabulary.

Try “Acsoi” — a metric so new that there’s no agreement on how to pronounce it. Depending on whom you ask, it’s either “ack-soy” or “ack-swa.”

Short for “adjusted consolidated segment operating income,” Acsoi is one of three yardsticks that Groupon, the online coupon giant, recommends investors use to determine how it is performing. It is essentially operating profit minus the company’s large online marketing and acquisition expenses — a highly nonstandard approach that had many scratching their heads.

Yet without it, Groupon would appear steeped in red ink.

“These hot private companies are revealing their numbers, and I for one am surprised how they’re not making money,” said Lisa R. Thompson, an analyst with the research firm Arcstone Partners. “Everything in my space I’ve looked at doesn’t make money.”

Pandora Media, for instance, has garnered acclaim for its online radio station format. But under the company’s current licensing deals, the more songs users listen to, the more Pandora pays in royalty fees, prompting some to question whether it will ever turn a profit.

Time will tell I guess, but until then, like pretty much everything Chinese, I’ll just avoid.

Surely you josh. Up 140% on day 1.

Well it was always going to be popular, there is a buzz about social media reminiscent of the internet and dotcoms. I wasn’t trading or involved in the markets during the 1990’s heyday, so I missed some of the crazy moves that took place. Today, in this environment, a valuation of this sort might end in tears. Although I was hideously wrong with GOOG when it was an IPO at $85

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