The FaceBook IPO

[Ken H.]

If you could invest in the FB IPO today, would you?

 

Or another way of putting it, is FB here to stay and a long term growth perspective?

 

I’m really on the fence on the subject. On one hand it’s more firmly entrenched in that all important young demographic than just about anything to come along in a long time.

 

OTOH, for that same demographic there’s some increasingly strong evidence that it is actually altering the intellectual, social and cognitive development of young people (more or less 12 – 22) and not necessarily for the better.

 

So would you buy or pass?

 

[marcopolo]

I would pass, not based on investment criteria, but simply because I think it's crazy that something like Facebook has been valued at 100+ Billion. Says something about society doesn't it? BTW, I use Facebook.

[philbytx]

I passed, and will continue to do so.

 

[Quinn]

The popularity of Facebook reminds me of AOL.

 

-----

 

 

[MT Wallet]

I can live without facebook or its stock. It might be like Google or it might go the way of AOL as Quinn points out. I guess I'd quote Kenny Rogers on any investment. "know when to hold em and know when to fold em".

[Dave McReynolds]

Just from a purely business standpoint, it doesn't seem like a very good bet to me. The environment is too volitile. Today's hero is tomorrow's birdcage liner. Sort of like betting on the winner of last year's world series to win this year's pennant again. Can happen, but a lot can change in a year too.

[Joe Frickin' Friday]

I'm too dumb to invest individual stocks; most of our money is invested in mutual funds. But if I were into buying individual stocks, I'd hold off on the Facebook stock until the dust (and price) has settled.

[tallman]

Can you provide a link ao I can post it on My Space ?

[Mike]

OTOH, for that same demographic there’s some increasingly strong evidence that it is actually altering the intellectual, social and cognitive development of young people (more or less 12 – 22) and not necessarily for the better.

 

 

I hadn't heard that. Could you elaborate?

 

My investment acumen is probably reflected in my meager portfolio, I haven't looked at the stock in a technical fashion, something well beyond my ability. But, as someone who thinks he has at least a gut feel for how the world operates, I don't see a long, prosperous future for Facebook.

 

I base that on little, other than being a user of FB and what I've seen over the past few years. First, I've never intentionally clicked on a Facebook ad. Never. I see the ads. I know that they've evaluated my on-line behavior and are targeted to me. But, at worst, they piss me off ("The bastards are watching me.") and, at best, I am wholly indifferent to them. At least, I think I am. Maybe there's some brand awareness thing going on, but I don't really think so.

 

So, how many people are there like me, who are free-riding on Facebook and its advertisers? I think, actually, quite a sizable percentage. My sense is that, at least at this point in time, advertisers have not figured out how to make many, many people actually respond to these ads. If the advertisers figure that out, it might be a bummer for revenue.

 

Also, I've seen a marked drop-off in the participation of younger users. At one time, I saw my son's contemporaries (he's 25) posting almost constantly. Maybe it's because of the intrusion of those of my generation, but I've seen a noticeable decrease in the FB activity of younger people. I remain fairly active there, but also find it quite tiresome at times. Maybe the number of users is increasing, but it seems to be a medium that people tire of after a period of time. The question I ponder is not if, but when a new social medium will present itself as being more interesting and attractive. My bottom line is that I see it approaching the peak of its product life cycle. It may persist for years, even decades, but I don't foresee a vigorous future for the company, just a lingering presence. The novelty and excitement is already subsiding.

[pbbeck]

No, I would not invest.

 

I agree with Mike. Facebook's shine has worn off and I predict it will eventually go the way of Myspace and AOL and Compuserve (remember that?!) I hear a lot of young people (I'm a teacher) tell me that FB is "boring now," and many report not using the service anymore.

 

I was at best a moderate Facebook user but have severely curtailed my participation. Yes, FB has allowed me to keep in touch with distant friends and relatives all over the world, but I grew weary of the "obligation" being placed on me to share my every move with everybody all the time.

 

BTW... I cannot recall a single ad I've seen on FB. It's amazing how selective one's attention can be. IMO, FB advertising doesn't seem very effective. I have never clicked on a FB ad (except by mistake), nor have I ever made a single purchase based on a FB ad.

[Ken H.]

Can you provide a link ao I can post it on My Space ?

LOL, good one!

 

I’d have a tendency to agree, expect what gives me pause is how much you read about how FB is actually altering the way youth develop how to think. That their cognitive skills are being formed around the concept of group openness and connectiveness that FB enables. That it’s possible through out the next decades of their lives they will not be able to ‘unplug’ so to speak from FB. No more than any of us here can unplug from the English language. I.e. it’s much more than a passing fad. E.g. think of Star Trek’s The Borg’s collective consciousness.

 

I mean, I certainly know people in the under 30 crowd that are never not on FB. And not just idle chit chat, they, in many respect’s, have moved their actual lives to there. They live, play, socialize and yes work – on, actually “on” is not the right word – they live in FB.

 

Another thing that I thought was interesting; Donna is a certified genealogist. In that realm there are already discussions going on about how important Facebook Timelines will be for doing genealogy/family history research 100 years from now. Because nobody records it anywhere else these days. I.e. – who (in the under 60 crowd at any rate) writes stuff in the front of a family Bible any more? And detailed censuses are falling by the wayside due to budget cuts.

 

I don’t know, these points may be hooey, but it’s interesting that in some circles "The Facebook Effect" is being considered that important.

 

 

 

[Ken H.]

OTOH, for that same demographic there’s some increasingly strong evidence that it is actually altering the intellectual, social and cognitive development of young people (more or less 12 – 22) and not necessarily for the better.

 

 

I hadn't heard that. Could you elaborate?

Oh I’ve read about a few different studies, none of which I can probably easily put my hands on again. At least one was in a news magazine. It talked about favored sources of information have evolved over the centuries/decades. Go back to scholars. Then there was books, rare, but a step. Then books became common and there were the generations that the common method of finding out something was “go the library.” Encyclopedias to bring a certain expanse / source of information into the home came about. A couple of decades ago the where to go to for information became “The Internet”. Which spawned Google and Wikipedia. Today when the under 24 year demographic is asked, “Where do you go to find out about something?” Something like 40% reply, “I ask on Facebook.”

 

I also read a thing about crowd sourcing, group solving a specific problem by socializing it in the general populous is starting to move onto FB. I.e. people are actually getting real work done there. Very limited at this point, FB is still a small % of the world’s population after all. But on the other hand it’s by far the single biggest point where some percentage of humans on the planet have ever gathered together. Who knows what that might enable?

 

 

[Mike]

OTOH, for that same demographic there’s some increasingly strong evidence that it is actually altering the intellectual, social and cognitive development of young people (more or less 12 – 22) and not necessarily for the better.

 

 

I hadn't heard that. Could you elaborate?

Oh I’ve read about a few different studies, none of which I can probably easily put my hands on again. At least one was in a news magazine. It talked about favored sources of information have evolved over the centuries/decades. Go back to scholars. Then there was books, rare, but a step. Then books became common and there were the generations that the common method of finding out something was “go the library.” Encyclopedias to bring a certain expanse / source of information into the home came about. A couple of decades ago the where to go to for information became “The Internet”. Which spawned Google and Wikipedia. Today when the under 24 year demographic is asked, “Where do you go to find out about something?” Something like 40% reply, “I ask on Facebook.”

 

I also read a thing about crowd sourcing, group solving a specific problem by socializing it in the general populous is starting to move onto FB. I.e. people are actually getting real work done there. Very limited at this point, FB is still a small % of the world’s population after all. But on the other hand it’s by far the single biggest point where some percentage of humans on the planet have ever gathered together. Who knows what that might enable?

 

 

"I ask on Facebook." That's scary.

 

I guess that there's some validity to crowd-sourcing information, though the traditional benefits of verifying sources, as is supposed to occur in traditional research and journalism, are lost.

 

Having said that--and this doesn't directly implicate Facebook--it's interesting to see information being suppressed in the news media, which causes you to wonder who's pulling the strings. We're hosting the NATO summit and there are apparently things happening, things you find out about in conversations with LEOs, that are not making the news. So, traditional forms of reporting sometimes let us down.

[pbharvey]

I'm not on Facebook but in observing my wife and children it seems to have lost some steam. There's not nearly the urgency to go check Facebook as there was a year ago. The kids are more into Tweeting and Instagraming.

 

Much of what I've seen on Facebook, I wish I hadn't. Not bad things per se, just stuff I'd rather not know about people.

[moshe_levy]

WRT to investment potential, like it or not, FB represents the vanguard of targeted marketing. That is powerful.

 

I was about to get off Facebook because I was less than disinterested in the comings and goings of long lost grade school friends, and I didn't care to know who went to the bathroom when and who won at some stupid online game.

 

Then a friend of mine explained to me that I was using FB all wrong. "Sign up for products you love, music you love, and maybe 5 or 6 good friends or people you're really interested in hearing from. Block the rest."

 

I followed his advice and now I love FB. I get all sorts of cool updates from manufacturers I care about, great music updates from bands I care about, and I hear from those I want to hear from.

 

It loses steam when it's one one big pile of rubbish. When you take a few minutes to sort through it and filter 99% of it out, it becomes a good tool to stay in touch.

 

Would I invest in it? Hell, no. We've got record low real estate values coupled with record low interest rates. Anyone wasting time with anything else is crazy IMO.

 

-MKL

[RonStewart]

Today when the under 24 year demographic is asked, “Where do you go to find out about something?” Something like 40% reply, “I ask on Facebook.”

"I ask on Facebook." That's scary.

I ask on bmwst.com.

[Ken H.]

Today when the under 24 year demographic is asked, “Where do you go to find out about something?” Something like 40% reply, “I ask on Facebook.”

"I ask on Facebook." That's scary.

I ask on bmwst.com.

That's scary.

 

 

 

 

Sorry, sometimes the cheap shots are just to easy to pass up.

[Mike]

News reports indicate that the IPO kind of fell flat, with first-day trading ending essentially flat. Maybe investors have been reading BMWST.

 

[Bob Palin]

News reports indicate that the IPO kind of fell flat, with first-day trading ending essentially flat. Maybe investors have been reading BMWST.

Nothing that generates $100 billion can possibly be considered to have fallen flat! The price is flat obviously. I wouldn't invest in FB, even though I think it is the best thing that ever happened to computers, there is too much uncertainty about the ad model and mobile platform.

 

According to Facebook 40% of users never click on ads. I do, I make a point of clicking on ads I don't like. That may not be good for FB of course because those advertisers don't get an ROI for those clicks and they probably measure that. I do occasionally see ads I'm interested in and click on those but I can't actually remember any of those clicks resulting in purchases.

[Limecreek]

It will crash and burn in the next few years. Stay away.

[John Ranalletta]

Some times, it's best to let others do the talking:

The IPO was grossly overpriced, and so the insiders were dumping everything they could to the hapless idiots on the other side of the trade. The good news is that for once it is the underwriters such as Morgan Stanley who are getting the rat----. Couldn't happen to a worse set of criminals.

That the underwriter feels some serious pain for foisting this useless turd of of a company on the market is not a problem with me.

 

The 'market' has literally become madness at this point. The simple idea of "asset creation" is lost now. What real asset does facebook create, what utility? It has a certain value, it is a form of entertainment for lonely, narcisstic people, but it is way over hyped.

 

As a site it has a certain voyeuristic and twisted quality, which for most socially normal people falls off fairly quickly. As a privacy destroyer it has succeeded handsomely! Facebook's overreach is what will ultimately kill it.

 

For now I let it linger around like an old rolodex. That is its only possible utility. I don't care if anyone just made dinner, or is tired, or just farted. I don't think any but a small, sick demographic will care either. And over time there is no way to justify a large cap for such uselessness.

High frequency traders just doing their thing to FailBook's stockholders. Long but instructive of why buying stocks is a fool's game.

 

[Bob Palin]

High frequency traders just doing their thing to FailBook's stockholders. Long but instructive of why buying stocks is a fool's game.

 

FailBook huh? 2011 estimated revenue: 3.7 billion dollars, I'd like that kind of failure. Some people just can't stand it when others are successful.

[Mike]

High frequency traders just doing their thing to FailBook's stockholders. Long but instructive of why buying stocks is a fool's game.

 

FailBook huh? 2011 estimated revenue: 3.7 billion dollars, I'd like that kind of failure. Some people just can't stand it when others are successful.

 

It's certainly become a huge success in a short time. But, doesn't it seem pretty overvalued for its revenue?

[Bob Palin]

It's certainly become a huge success in a short time. But, doesn't it seem pretty overvalued for its revenue?

Yes it does, but even ignoring the current revenue, which at least exists as opposed to many hi-tech IPOs a few years ago, the future revenue sources seem uncertain which is the real reason it's overvalued. But it can't be considered a failure yet.

[TBear]

Apple has a price to earnings ratio of 15. At its current valuation, FB has a P/E ratio of 100. FB must double and re-double its profits repeatedly to merit the current valuation. An economist recently stated that in, the years to come, FB must earn 7 out of 10 global advertising dollars to substantiate it valuation. That ain't happening.

[Boffin]

It seems that the market believes Facebook to be over-valued:

Facebook price drops as much as 13.7pc.

 

Andy

[tallman]

It seems that the market believes Facebook to be over-valued:

Facebook price drops as much as 13.7pc.

 

Andy

 

Time to double that, over 27% down from high.

 

YMMV

[moshe_levy]

It was overhyped, for sure. But let's see what happens long term. I remember a similar story for Amazon, which is strong today.

 

-MKL

[MT Wallet]

Amazon is selling products. Facebook is selling ads.

[Quinn]

Amazon is selling products. Facebook is selling ads.

 

And information.

 

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[moshe_levy]

Right. Ads and info are very valuable indeed.

 

-MKL

[Bob Palin]

Amazon is selling products. Facebook is selling ads.

Facebook is selling us! We are the product.

[MT Wallet]

Agreed. I mentioned in a previous thread how much I hated being "target marketed to" by these guys. I can't tell you how many MC helmet ads I got even after I bought one. I solved that problem with the help of some of the folks here.Selling my data is just an intrusion. Ok, I'm done venting.

[ragtoplvr]

what good is advertising targeted or otherwise when 99% of us have no money except for essentials

 

Rod

[moshe_levy]

Rod, targeted marketing is good precisely in the situation you describe. When I was in grad school for marketing a few years back, the ultimate dream was to have ads which changed based on who was viewing them. Some of the ideas bandied about for future marketing was a set of glass with user preferences imbedded in them which then "saw" the ads the wearer would want to see. When there is less disposable income to go around, targeted marketing works even better, by advertising those attributes the user needs at the best value. I hate as noise as much as the next guy, but what FB has done with targeted marketing is the future, folks, like it or not.

 

-MKL

[moshe_levy]

That should've been "glasses" not "glass," and "ad" noise not "as" noise. Jeez. Sorry about that.

 

-MKL

[markgoodrich]

No, I wouldn't have invested in Facebook. Of course, I wouldn't have invested in google, either, I much preferred Alta Vista....

 

Here's an informed, if perhaps extreme, view of Facebook:

 

http://www.technologyreview.com/web/40437/?p1=A1

 

[unlike Killer, I never click on ads, because I never see them, they don't show up. I presume it's because I use a AdBlock Plus, which kills ads in my browser. So far there have been no smartphone ads on the site]

[DavidEBSmith]

Oh I’ve read about a few different studies, none of which I can probably easily put my hands on again. At least one was in a news magazine. It talked about favored sources of information have evolved over the centuries/decades. Go back to scholars. Then there was books, rare, but a step. Then books became common and there were the generations that the common method of finding out something was “go the library.” Encyclopedias to bring a certain expanse / source of information into the home came about. A couple of decades ago the where to go to for information became “The Internet”. Which spawned Google and Wikipedia. Today when the under 24 year demographic is asked, “Where do you go to find out about something?” Something like 40% reply, “I ask on Facebook.”

 

This is something of a digression, but I've seen a decline in lawyers' research skills with the rise in online searching. 20 years ago, to look up an issue, you went to the West Digest books, which had capsule summaries of cases listed by topic. You would read through the case summaries, looking for something that sounded like your issue, then you'd go read the case to see if it really was. With the rise of Westlaw and Lexis, which are keyword oriented, lawyers started falling into the habit of searching for specific phrases and being stymied if they didn't get an exact hit. (Putting together good Westlaw searches that aren't overly specific is an art). The everyday use of Google has made that bad habit even stronger. I've had law clerks and lawyers report to me that they couldn't find any cases involving "Municipal Code of Chicago section 4-4-280", and got blank looks when I told them they had to search more generally for cases on "license revocation", or "license revoked", but for business licenses, not driver's licenses. I can't even imagine what legal research will be in the Facebook era. "I searched on Facebook and none of my friends know the answer"?

[Selden]

This is something of a digression, but I've seen a decline in lawyers' research skills with the rise in online searching. 20 years ago, to look up an issue, you went to the West Digest books, which had capsule summaries of cases listed by topic. You would read through the case summaries, looking for something that sounded like your issue, then you'd go read the case to see if it really was. With the rise of Westlaw and Lexis, which are keyword oriented, lawyers started falling into the habit of searching for specific phrases and being stymied if they didn't get an exact hit. (Putting together good Westlaw searches that aren't overly specific is an art). The everyday use of Google has made that bad habit even stronger. I've had law clerks and lawyers report to me that they couldn't find any cases involving "Municipal Code of Chicago section 4-4-280", and got blank looks when I told them they had to search more generally for cases on "license revocation", or "license revoked", but for business licenses, not driver's licenses.

This is what librarians are for. My wife was appalled when one Emory Law student bragged that he had gotten through law school without ever using the library. Even more appalling, two library staff positions were cannibalized to hire this ignoramus for an IT position.

[Marty Hill]

what good is advertising targeted or otherwise when 99% of us have no money except for essentials

 

Rod

 

I've got to ask, are BMW moto's essential?

[tallman]

Youbetcha...

[BadAdam]

what good is advertising targeted or otherwise when 99% of us have no money except for essentials

 

Rod

 

You realize you are posting this on a web discussion forum mainly composed of old dudes with expensive motorcycles....

[Marty Hill]

Hey bad, you got that right!

[majrosebud]

what good is advertising targeted or otherwise when 99% of us have no money except for essentials

 

Rod

 

You realize you are posting this on a web discussion forum mainly composed of old dudes with expensive motorcycles....

 

 

Thanks for the laugh. Great way to start the day.

[Ken H.]

This is so messed up… The lawsuits are already flying, investor’s suing left and right over the money they lost on FB. The (public) company is only FOUR DAYS OLD for cryin’ out loud!!! The investment firms and high volume traders are all pissed off about that they weren’t able to make fortunes by investing in FB for a few hours. WTF?

 

What ever happened to the idea of investing in a company because you thought it was a good company with a future? Instead these day’s its all about how fast does the stock go up in the next few minutes? If not the company is junk.

 

And what ever happened to the concept of accepting risk? You decide to investing some thing, you get your reward. Or your punishment. Now days if you don’t get your reward in the investment (in a couple of days no less) you sue so you get it anyway. ???

 

Besides, from what has been disclosed so far, FB did issue revised earnings projection to their underwriters well before the IPO (May 8). But Morgan Stanly, Goldman Sachs, JP Morgan and Bank of America all kept it under wraps except to a select group of preferred investors who intended to short the stock.

 

The whole investment system is just so totally jacked. There is no way the economy in its current form can be fixed. By any elected official of any political bent. It’s just one big rape & plunder free for all.

 

We are so screwed.

 

Article - Shareholders sue Facebook

[Boffin]

Only private shareholders invest in the long-term of a company. According to an article I read in the Daily Telegraph, the average US shareholding lasts 22 seconds.

I have read elsewhere that this may be incorrect and that shares are held for as long as 7 months.

Share prices have long-ceased to be an indicator of long-term confidence in a company - unless you consider tomorrow to be long-term.

 

Andy

[Bob Palin]

what good is advertising targeted or otherwise when 99% of us have no money except for essentials

 

Rod

 

You realize you are posting this on a web discussion forum mainly composed of old dudes with expensive motorcycles....

Isn't that why they can only afford the essentials?

[1LIFE2LIVE]

This is so messed up… The lawsuits are already flying, investor’s suing left and right over the money they lost on FB. The (public) company is only FOUR DAYS OLD for cryin’ out loud!!! The investment firms and high volume traders are all pissed off about that they weren’t able to make fortunes by investing in FB for a few hours. WTF?

 

What ever happened to the idea of investing in a company because you thought it was a good company with a future? Instead these day’s its all about how fast does the stock go up in the next few minutes? If not the company is junk.

 

And what ever happened to the concept of accepting risk? You decide to investing some thing, you get your reward. Or your punishment. Now days if you don’t get your reward in the investment (in a couple of days no less) you sue so you get it anyway. ???

 

Besides, from what has been disclosed so far, FB did issue revised earnings projection to their underwriters well before the IPO (May 8). But Morgan Stanly, Goldman Sachs, JP Morgan and Bank of America all kept it under wraps except to a select group of preferred investors who intended to short the stock.

 

The whole investment system is just so totally jacked. There is no way the economy in its current form can be fixed. By any elected official of any political bent. It’s just one big rape & plunder free for all.

 

We are so screwed.

 

Article - Shareholders sue Facebook

 

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