Looks like the underwriters gave up the $35 floor and made their new mark at $34. Very fast change of strategy there. Must be a ton of pressure on it downward.
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well, probably some of those guys who bought in the IPO are a bit surprised how fastly they lost money ...
as i wrote already here, Facebook will be used in the future as prime example that nothing has changed on the Wallstreet after the financial crises and they will sell whatever shit with straight face, while trying to legitimize insane over-valuations...
There is no way I would have bought at 100x earnings. APPLE sells at 15x earnings and they actually have a change to really increase revenues, but FB doesn't. Major advertisers pulling out due to lack of ROI, china not allowing it, bad geo location on the ad-serving....
I can't believe anyone bought this...
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Wouldn't touch that stock with a pole. Some of my friends bought and I told them to wait a few weeks to see where It settles but oh no they were gonna make a fast 20-30% profit
Wouldn't touch that stock with a pole. Some of my friends bought and I told them to wait a few weeks to see where It settles but oh no they were gonna make a fast 20-30% profit
I wonder how much the underwriters are down as they try to keep the stock proped up.
It will bounce back and forth before Friday. You will see chunks go, then bought up. I say at about $29 and then jump back to around $39. Maybe a rally before Friday, dependent on whatever the hell happens in the news with the rest of the stock market.
I honestly think it's just too early too see it tank off the deep end. People may be skeptical, but still intrigued. I predict a ton more public appearances by Zuckerberg, attempting to instill confidence into the investor.
It will bounce back and forth before Friday. You will see chunks go, then bought up. I say at about $29 and then jump back to around $39. Maybe a rally before Friday, dependent on whatever the hell happens in the news with the rest of the stock market.
I honestly think it's just too early too see it tank off the deep end. People may be skeptical, but still intrigued. I predict a ton more public appearances by Zuckerberg, attempting to instill confidence into the investor.
they overvaluated it. I think it will settle in around $25-$28 and stay there for awhile until they find a way to monitize their advertising better.
they overvaluated it. I think it will settle in around $25-$28 and stay there for awhile until they find a way to monitize their advertising better.
Fair enough, and it makes perfect sense. I just feel that savvy people (investors) realize that there is a shit ton of traffic there, and Zuckerberg realizes it. He has yet to bring FB to it's full potential monetarily wise. He knows it. He has been sucking in traffic for years now before it (advertising) becomes a major imposition on the end user.
It's a matter of when and if they choose to change, will people accept it? Myspace v2.0... scary ground people are treading on.
I don't know anything about stocks, but it seems that every time there is a new Internet stock it totally crashes. What is the last new Internet stock that went well?
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I don't know anything about stocks, but it seems that every time there is a new Internet stock it totally crashes. What is the last new Internet stock that went well?
The number 1 rules in investing, NEVER invest into something you don't understand.
Meaning, how hard was it to look for similar concepts that failed? GeoCities, myspace, and for you old schoolers, TheGlobe.com. Back the 1990s, TG had 20 million users, only a couple hundred million Internet users back then.
Likewise, perhaps you should avoid making comparisons of FB to mere websites because it's something that you don't completely understand.
FB is a platform, much like Google.
Now some here have not been able to comprehend the difference and thus haughtily regurgitate the repetitive Myspace comparison, but the only thing that such persons are displaying is their lack of awareness regarding what FB really is.
LOL at the people that say it or the company will crash. While $38 was aggressive, FB isn't going anywhere.
In 2010 they had $2 billing EBITA and a $600 million profit (these numbers may be a little off, but close enough)
In 2011 that jumped to $3.7 billion and $1 billion in profits
So in one year they almost doubled their revenue and profit. Keep in mind, their user base was tapping out at that point. They got good at growing revenue and profit.
Their credits system also has nowhere to go but up. 2010 saw $106 million while 2011 jumped to $557 million.
Zuck knows he has to make mobile work. They've done zero to monetize mobile despite it becoming a huge part of their traffic. They will now focus on mobile ... and we all know how lucrative mobile can be.
You're supposed to invest in the stock market for long term. You cannot judge a company by what it stock does from day one to day two. The richest men in the world take long positions in everything for a reason.
There are plenty of investors that aren't sweating right now because they see long term value. The people that view the stock market as short-term gambling are the one's that are sweating.
Oh shit, you actually bought FB stock? Lack of a awareness? - Seriously? FB core function is nothing like Google.
Last year Facebook had $3.8 billion in revenue, not profit, just revenue. We don’t know how profitable Facebook was because it was a private company. Let’s pretend Facebook’s future margins are better than Google's 2011 with 27.5%. This would mean they earned $1.045 billion in profit which would imply a P/E ratio of 95.7 and a return slightly over 1% on investment. This would also mean, FB couldn't even keep pace with inflation.
BUT Facebook is a growth investment right? Possibly, but how much growth can possibly be expected with 900 million users already, or to put it another way, nearly half of the 2.3 billion total internet users? Sure the internet will continue to attract new users, but from where? Developing worlds only have limited access to the internet?
Facebook’s main traffic is from dumbfuck Americans now figuring out most of what they write isn't important and your high school buddies don't care. Matter of fact, there's a steady stream dropping because they don't want to be associated with others knowing their lives or be somehow associated with yours.
Anyway, to achieve an 18.31 P/E ratio (like Google) holding the $100 billion valuation constant, Facebook will need to increase their revenues and "hypothetical" net income by more than 500% to $19.86 billion and $5.46 billion respectively. I don’t think it’s realistic that Facebook can increase their revenues and net income by 500% within a reasonable time either through growth in users or through generating significantly more revenue per user.
This was necessary just to justify Facebook’s opening IPO price if you think the company is comparable to Google in its prospects. If Facebook made $1 billion profit with 900 million users that means each year, each user earns Facebook roughly $1.11 on average. We know that to achieve an 18.31 P/E Facebook would need $5.46 billion in earnings, divide that $1.11 formulating the number of users required to generate this income target. That would be 4.92 billion users or, in other words, twice+ the total number of users estimated to be on the internet today.
Even with my piss poor high school math, how could you not see Facebook's future being more analogous to MySpace than to Google? Facebook isn’t an innovator. They’re not branching out into other businesses in a meaningful way, but an outlandish $100 billion valuation? FB is going to be TheGlobe.com x1000 and has NO shot of being anything like Google. WAKE UP!
Those with no vision make themselves quite obvious.
The metrics which you discuss so confidently, such as user base and ad revenue (FB's primary source of income at present), are not applicable to FB's future growth in as meaningful a way as other sites before it. This accounts for why the vast majority of critics of FB simply can't comprehend what actually is happening and thus they bring out the MySpace/<insert website here> comparisons.
At the same time Zuckerberg can't (and shouldn't) release the full dynamics of FB's plans as a platform as yet because he needs to be the first to market with what is about to happen in the coming year. Social networking will be turned effectively on its head and others will attempt to follow suit, but it will be too late.
Most persons in the know actually expected the dip and in some circles it is hoped that the value goes as low as mid 20's in value so that the stock practically can be doubled up on.
There will be a desperate scramble for FB stock if/when even a small portion of FB's platform plans come to fruition because the price will bounce back and soar to record levels practically overnight. It all depends on how Zuckerberg and crew play their cards.
Like I said before, they can double their profits if they let it take a deep slide and buy back stock as they go, but we will see how savvy a CEO Zuckerberg really is. There is nothing like a stock that takes a massive slide and then makes an awesome comeback to spur long term investor confidence.
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