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.

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