Face(palm)Book

[Sam I Am]

I was appalled when Facebook raised their price just prior to the IPO. I was thinking nobody should buy it at it's current price and figured it would just scare more people away. smh

==============================

Wall Street struggles to find Facebook's worth

NEW YORK (Reuters) - In its three days of trading, Facebook's stock has dropped 18 percent from its $38 issue price. For the thousands of investors that bought at the IPO, that's bad enough, but one analysis of its earnings prospects suggests it could get a lot worse - more like $10 a share.

Setting aside the hype and the cultural phenomenon that is the online networking site, Facebook Inc would be fairly priced at $9.59, according to the smattering of Wall Street estimates analyzed and modeled by Thomson Reuters StarMine.

Complete Story (http://www.moneycontrol.com/news/wire-news/wall-street-struggles-to-find-facebooks-worth_707955.html)

================================

Subsequently...

SEC, FINRA call for probe of Facebook IPO as stock slides

Facebook’s (FB-Q31.00-3.03-8.90%) shares fell sharply again on Tuesday and two top U.S. financial regulators called for a review of the circumstances surrounding its troubled initial public offering last week.

The separate calls for review, by Securities and Exchange Commission Chairman Mary Schapiro and FINRA Chairman Rick Ketchum, added pressure on the company, its underwriters and the Nasdaq, all of which have taken blame for the stock’s harried opening and subsequent sharp decline.

Complete Story (http://www.theglobeandmail.com/globe-investor/facebook-stock-hit-again-as-valuation-doubts-rise/article2439751/)

[casmith07]

They should never have went public. They're going to way of *******.

[Sam I Am]

They should never have went public. They're going to way of *******.

They never needed to go public. (they got this large without going public) They didn't go public until they were as big as they could possibly get. The only reason they did finally go public is to suck in as much money as possible while they were at the top, before the company starts its downward slide.

This was 100% to screw people out of their money.

[MonsterD]

They should never have went public. They're going to way of *******.


my space? it is censored.

[Sam I Am]

my space? it is censored.

Yeah, for a long time. I don't blame them either. That site was an complete and utter mess and hosted so many viruses and malware. That block was like having antivirus on this site.

[Reality]

The tech industry caused the DOT-COM crash 12 years ago because VC firms overvalued pre-IPO stock prices and convinced additional rounds of investors it was a solid investment. In the real world, we call this a ponzi scheme, but in the venture capital world, apparently it is the "genius" way to make money.

People have been so high on Facebook because everyone uses it. I do not nor have I ever, but almost everyone I know does. However, there is a flaw in that thinking. There is a HUGE difference between everyone buying something and everyone using something for free.

If a company gives everything away for free of course they will become "popular", but history has shown that when you start out free and try to switch to get revenue from your users later, most of the users leave for yet another site that is "free".

Companies like Apple, Microsoft, Google, etc. all have real revenue streams which justifies most of their valuations. A company like Facebook is valued more on hype than revenue. It's the thought that because everyone uses it, everyone has their lives in it, it "will" be valuable. However, if you stop and think about it, Facebook just pulled a pre-DOT-COM IPO out of a post-DOT-COM-CRASH world.

#reality

[Reality]

They never needed to go public. (they got this large without going public) They didn't go public until they were as big as they could possibly get. The only reason they did finally go public is to suck in as much money as possible while they were at the top, before the company starts its downward slide.

This was 100% to screw people out of their money.

Exactly! This was nothing more than a money grab to make sure the original founders and investors from the VC firms got their pay days. The company's new found cash-on-hand will most likely be used for fruitless acquisitions as a way to stave off the inevitable decline in users, and more importantly, user activity which will directly impact their biggest asset .. YOUR data.

#reality

[Cajuncowboy]

They never needed to go public. (they got this large without going public) They didn't go public until they were as big as they could possibly get. The only reason they did finally go public is to suck in as much money as possible while they were at the top, before the company starts its downward slide.

This was 100% to screw people out of their money.

That would insinuate they did something illegal. At this point there is no evidence that they did. And, getting as much money as you can is something I have no problem with. However, anyone who invested, as I said in the thread just as it was happening, was stupid. To value a company like FB, that will not be around in three years more than a company like Disney is insane. Those that lost their money or will lose their money will do so because they made a terrible investment, not because Zuck screwed them.

[Sam I Am]

That would insinuate they did something illegal. At this point there is no evidence that they did. And, getting as much money as you can is something I have no problem with. However, anyone who invested, as I said in the thread just as it was happening, was stupid. To value a company like FB, that will not be around in three years more than a company like Disney is insane. Those that lost their money or will lose their money will do so because they made a terrible investment, not because Zuck screwed them.

Not necessarily. People buy tickets to events way over their actual value. That isn't illegal. In this case, people didn't do the math and paid way way way more for the stock than what it was worth. People purchased on hype rather than the numbers. (which blows me away that so many big banks bought too)

Though, as noted above. There is going to be a SEC investigation.

[BrAinPaiNt]

That would insinuate they did something illegal. At this point there is no evidence that they did. And, getting as much money as you can is something I have no problem with. However, anyone who invested, as I said in the thread just as it was happening, was stupid. To value a company like FB, that will not be around in three years more than a company like Disney is insane. Those that lost their money or will lose their money will do so because they made a terrible investment, not because Zuck screwed them.

Just sum it up with...Zuck didn't screw them, they screwed their selves. :)

[trickblue]

my space? it is censored.

Yes... near the end of its popularity, there was a lot of nudity and inappropriate material being linked to from my space...

[casmith07]

Just sum it up with...Zuck didn't screw them, they screwed their selves. :)

Exactly. :rolleyes:

[Reality]

That would insinuate they did something illegal. At this point there is no evidence that they did. And, getting as much money as you can is something I have no problem with. However, anyone who invested, as I said in the thread just as it was happening, was stupid. To value a company like FB, that will not be around in three years more than a company like Disney is insane. Those that lost their money or will lose their money will do so because they made a terrible investment, not because Zuck screwed them.

You are right .. a fool and his money are soon parted. I do not blame Facebook for what they did as the stock purchasers were not forced or mislead into buying Facebook stock. In this case, though, a lot of first time stock investors fell prey to the hype based completely on the idea that "Everyone I know uses it!" Their fault? Absolutely. Does that make it okay? Not really.

#reality

[Faerluna]

You could see this coming a mile away. Anyone that bought that stock is delusional. (And I love Facebook!)

[casmith07]

I want to quit using Facebook but I'm guilted into keeping it by my mother.

[JBond]

Facebook is a fad. Now Morgan Stanley is being investigated by the Fed because they did not parrot the common narrative. High ranking government officials made several references to how wonderful Facebook is the night before the IPO and the the day of.

Those that did not fall in line are now going to be punished. Real experts peg the stock at about $9 a share based on the revenue they generate.

I am sure everyone noticed the Zuck immediately dumped 30 million shares and for a billion dollar profit. I wonder how many unions and pension funds bought in?

Reality mentioned the .com bubble of the 90's, but apparently many people have the memory of a fruit fly and bought in anyway. Dumb people make it easier for the rest of us to make real money.

[Cajuncowboy]

Not necessarily. People buy tickets to events way over their actual value. That isn't illegal. In this case, people didn't do the math and paid way way way more for the stock than what it was worth. People purchased on hype rather than the numbers. (which blows me away that so many big banks bought too)

Though, as noted above. There is going to be a SEC investigation.

Well, that would be scalping. :D

But you said FB did this to screw people. I think they just did what they needed to do to maximize their profit. They didn't force anyone to buy and like you said, people didn't do their due diligence.

[Cajuncowboy]

Just sum it up with...Zuck didn't screw them, they screwed their selves. :)

That's right.

[Sam I Am]

Well, that would be scalping. :D

But you said FB did this to screw people. I think they just did what they needed to do to maximize their profit. They didn't force anyone to buy and like you said, people didn't do their due diligence.

They did. They knew Facebook wasn't worth $38 a share. The only people who would have bought it are people that didn't know how to do the math. It's like scammers scamming old people out of their retirement. Either way, it was dishonest and screwed people out of their money.

People who buy overpriced tickets, know they are overpriced. People do not buy stock that is overpriced intentionally. People buy stock to make money, not to lose money. People by overpriced tickets as a luxury.

[burmafrd]

Facebook is a fad. Now Morgan Stanley is being investigated by the Fed because they did not parrot the common narrative. High ranking government officials made several references to how wonderful Facebook is the night before the IPO and the the day of.

Those that did not fall in line are now going to be punished. Real experts peg the stock at about $9 a share based on the revenue they generate.

I am sure everyone noticed the Zuck immediately dumped 30 million shares and for a billion dollar profit. I wonder how many unions and pension funds bought in?

Reality mentioned the .com bubble of the 90's, but apparently many people have the memory of a fruit fly and bought in anyway. Dumb people make it easier for the rest of us to make real money.

actually what it looks like is that MS did not tell everyone about this; only a privlidged few. THAT is what is wrong.

[Cajuncowboy]

You are right .. a fool and his money are soon parted. I do not blame Facebook for what they did as the stock purchasers were not forced or mislead into buying Facebook stock. In this case, though, a lot of first time stock investors fell prey to the hype based completely on the idea that "Everyone I know uses it!" Their fault? Absolutely. Does that make it okay? Not really.

#reality

I guess the question would be was it ethical. It was okay in the sense they did nothing illegal. The SEC investigation will turn up some other information and we will see if it was all on the up and up.

[Cajuncowboy]

They did. They knew Facebook wasn't worth $38 a share. The only people who would have bought it are people that didn't know how to do the math. It's like scammers scamming old people out of their retirement. Either way, it was dishonest and screwed people out of their money.

People who buy overpriced tickets, know they are overpriced. People do not buy stock that is overpriced intentionally. People buy stock to make money, not to lose money. People by overpriced tickets as a luxury.

Then it is their fault for not doing their homework. Don't play in a den of vipers if you don't know how to handle them. This was the fault of the investors, not really the fault of FB.

[Sam I Am]

More news.

Not that I couldn't see this coming.

============================

Zuckerberg, Morgan Stanley sued over Facebook IPO

Facebook Inc Chief Executive Mark Zuckerberg, and several banks led by Morgan Stanley were sued by shareholders, who claimed the defendants hid the social networking leader's weakened growth forecasts ahead of its $16 billion initial public offering.

The defendants were accused of concealing from investors during the IPO marketing process "a severe and pronounced reduction" in Facebook revenue growth forecasts, resulting from increased use of its app or website through mobile devices.

Complete Story (http://marketday.msnbc.msn.com/_news/2012/05/23/11828591-zuckerberg-morgan-stanley-sued-over-facebook-ipo?lite)

[Sam I Am]

Then it is their fault for not doing their homework. Don't play in a den of vipers if you don't know how to handle them. This was the fault of the investors, not really the fault of FB.

See above. That pit of vipers is about to get bit themselves.

Just because you can pull the wool over someones eyes, doesn't mean you can do it freely without consequences.

[Reality]

Facebook is a fad. Now Morgan Stanley is being investigated by the Fed because they did not parrot the common narrative. High ranking government officials made several references to how wonderful Facebook is the night before the IPO and the the day of.

Those that did not fall in line are now going to be punished. Real experts peg the stock at about $9 a share based on the revenue they generate.

I am sure everyone noticed the Zuck immediately dumped 30 million shares and for a billion dollar profit. I wonder how many unions and pension funds bought in?

Reality mentioned the .com bubble of the 90's, but apparently many people have the memory of a fruit fly and bought in anyway. Dumb people make it easier for the rest of us to make real money.

Back in the late 1990's, I had a major player in the DOT-COM industry want to buy a site I owned. He offered me millions in stock to acquire my site and a stock option package worth a lot more. Right from the start I asked for a financial statement and months later I finally got one. His venture had $60,000 cash on hand yet he promoted his company was worth more than a billion dollars. While I saw through it, several other similar sites like mine fell for it and a year later filed lawsuits to regain ownership of their sites.

People have no idea how IPOs and the stock market works. They assume when the bell rings you can buy stock at whatever the opening price is. They do not realize how many share orders are already queued and allocated prior to the IPO and that the price they pay will be a lot higher after those shares are transferred. The fact that the stock's price was pushed upwards immediately before the IPO launched should have been a warning sign.

#reality

[Cajuncowboy]

See above. That pit of vipers is about to get bit themselves.

Just because you can pull the wool over someones eyes, doesn't mean you can do it freely without consequences.

Well, like I said before, the SEC will investigate this. If they did something illegal then fine, but if not, then it is those who played with fire an got burned who is at fault.

Although, most of us who buy and sell stocks often could see this coming from a mile away. There is no inherent value in Facebook that justifies the IPO price.

And simply suing someone doesn't mean they did something wrong.

[Sam I Am]

Back in the late 1990's, I had a major player in the DOT-COM industry want to buy a site I owned. He offered me millions in stock to acquire my site and a stock option package worth a lot more. Right from the start I asked for a financial statement and months later I finally got one. His venture had $60,000 cash on hand yet he promoted his company was worth more than a billion dollars. While I saw through it, several other similar sites like mine fell for it and a year later filed lawsuits to regain ownership of their sites.

People have no idea how IPOs and the stock market works. They assume when the bell rings you can buy stock at whatever the opening price is. They do not realize how many share orders are already queued and allocated prior to the IPO and that the price they pay will be a lot higher after those shares are transferred. The fact that the stock's price was pushed upwards immediately before the IPO launched should have been a warning sign.

#reality

Hence, make limit orders not market orders. :)

[Sam I Am]

Well, like I said before, the SEC will investigate this. If they did something illegal then fine, but if not, then it is those who played with fire an got burned who is at fault.

Although, most of us who buy and sell stocks often could see this coming from a mile away. There is no inherent value in Facebook that justifies the IPO price.

And simply suing someone doesn't mean they did something wrong.

If they covered up forward financials, then they did do something wrong.

[Reality]

Hence, make limit orders not market orders. :)

Most people want the stock no matter what though :D

#reality

[JBond]

actually what it looks like is that MS did not tell everyone about this; only a privlidged few. THAT is what is wrong.

maybe...but I don't think so. After Zuck disclosed he was going to immediately dump 30 million shares they reevaluated the IPO.


"Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs. These procedures are in compliance with all applicable regulations," the brokerage said in a statement to CNBC.

"After Facebook released a revised S-1 filing on May 9 providing additional guidance with respect to business trends, a copy of the amendment was forwarded to all of MS’s institutional and retail investors and the amendment was widely publicized in the press at the time. In response to the information about business trends, a significant number of research analysts in the syndicate who were participating in investor education reduced their earnings views to reflect their estimate of the impact of the new information. These revised views were taken into account in the pricing of the IPO," the statement said.


http://www.cnbc.com/id/47523622

[Cajuncowboy]

If they covered up forward financials, then they did do something wrong.

Oh I agree. I'm just saying we don't know that for sure yet. My supposition is based on what we know. All this is right now is an accusation.

[theogt]

They should never have went public. They're going to way of *******.They had to go public. They were going to start bumping up against SEC rules requiring the to register, so it only made sense to do so in an offering context.

[Cajuncowboy]

Most people want the stock no matter what though :D

#reality

I think novice investors get excited to "own" a piece of something that is popular and don't look at the reality (no pun intended) of the whole picture.

I bought into Ford a few years ago when it was around 5.00 per share. It has more than doubled since then. There was REAL value in the company and the stock. It was very low and worth taking a risk to get into for a large chunk of change. Compare to FB. FB has nothing tangible to sell unlike Ford that has a real commodity.

A good rule of thumb is to invest in companies that the vast majority of people spend their money on. Things like entertainment (I own Disney stock) food companies that have a long history (Because everyone needs to eat) and hard goods (like cars, mid to low end clothing companies etc)

Some people think they are going to be overnight millionaires with stock and more often than not they end up broke. Common sense is always a good barometer.

[Reality]

A good rule of thumb is to invest in companies that the vast majority of people spend their money on. Things like entertainment (I own Disney stock) food companies that have a long history (Because everyone needs to eat) and hard goods (like cars, mid to low end clothing companies etc)

That is sound advice!

Right after Facebook announced their IPO, I had a friend ask me if he should buy their stock. I told him to imagine if our local city decided to launch an IPO for the city's main park and asked him if that would be a worthy investment? He said no of course. I said tons of people hang out there regularly and the park makes money from vending machines and tennis court fees, so why wouldn't he invest in that idea? He said, "But everyone uses Facebook." I then said, so if everyone used the park ..." and he cut me off with, "I get it."

#reality

[Reality]

I think the problem with most individual investors is that they think of shares of stock as the investment, not ownership in the company. It's like someone buying a baseball card because they think the baseball card will be worth more in the future. Baseball card investors never think about Major League Baseball's future, only that of the player on the card.

Stock investors are the same way. In most cases, they do not look at the company. Instead, they look at the stock share's potential or recent trends and invest in it. The only association they have with the company is when they can tell their friends and family, "Yeah, I own shares of their stock!" Beyond that, it's the shares themselves that matter. Owning 10 shares of Facebook would be like owning 10 copies of the same rookie baseball card that you paid $38 for. If at some point, the card is worth more than $38, you are a savvy investor. If the card's value drops into single digits, you wasted your money on magic beans.

#reality

[JBond]

They had to go public. They were going to start bumping up against SEC rules requiring the to register, so it only made sense to do so in an offering context.


Could you expound on this idea please? Why are private companies forced to become public companies? Your answer may be educational for more people than myself.

[theogt]

Could you expound on this idea please? Why are private companies forced to become public companies? Your answer may be educational for more people than myself.I won't get into too many legal specifics, as that's just opening up a can of words, but basically there are two ways a company can "go public". An initial public offering that is registered with the SEC is one way. That is what the vast majorities of companies do.

Also, if a "private" company is large enough and has a certain number of shareholders it is essentially deemed to become a "public" company such that it's required to register with the SEC and file public reports like other public companies. These rules are the only reason that Google went public for example. In 2011, the SEC began inquiries with Facebook about whether or not they would need to register because of these rules. It was inevitable that they would need to register, but going ahead and doing so in the form of a public offering has the benefit of raising capital (and providing liquidity to your existing shareholders), so that is what they did. They didn't really have much of a choice.

But that's not why they're getting bad press now. They're getting bad press now because the bankers priced the offering so high (and so large). They were able to do that only because there was enough demand to do that. Everyone and their dog wanted to be able to say that they bought into the Facebook IPO. But they didn't necessarily want to hold onto the stock long-term. So you had huge demand at the launch (or, rather, pricing) of the IPO, then later demand died down and the price dropped.

[JBond]

I won't get into too many legal specifics, as that's just opening up a can of words, but basically there are two ways a company can "go public". An initial public offering that is registered with the SEC is one way. That is what the vast majorities of companies do.

Also, if a "private" company is large enough and has a certain number of shareholders it is essentially deemed to become a "public" company such that it's required to register with the SEC and file public reports like other public companies. These rules are the only reason that Google went public for example. In 2011, the SEC began inquiries with Facebook about whether or not they would need to register because of these rules. It was inevitable that they would need to register, but going ahead and doing so in the form of a public offering has the benefit of raising capital (and providing liquidity to your existing shareholders), so that is what they did. They didn't really have much of a choice.

But that's not why they're getting bad press now. They're getting bad press now because the bankers priced the offering so high (and so large). They were able to do that only because there was enough demand to do that. Everyone and their dog wanted to be able to say that they bought into the Facebook IPO. But they didn't necessarily want to hold onto the stock long-term. So you had huge demand at the launch (or, rather, pricing) of the IPO, then later demand died down and the price dropped.

Thank you. That makes sense. I agree the hype around facebook was bit out of hand. I am not sure which firm handled the IPO but clearly they made some errors, intentional or otherwise.

[theogt]

Thank you. That makes sense. I agree the hype around facebook was bit out of hand. I am not sure which firm handled the IPO but clearly they made some errors, intentional or otherwise.Morgan Stanley, JP Morgan and Goldman Sachs were joint book-runners on the deal. You can see the full list of banks here.

http://www.sec.gov/Archives/edgar/data/1326801/000119312512240111/d287954d424b4.htm#toc287954_19

Ultimately it was the company's decision as to how to price and size the deal, so they deserve as much blame, if any, as the banks. I'm not sure anyone deserves blame, though. The people that bought into the IPO did so at a price they were willing to pay. And later sold at a price they were willing to sell at. In 6 months the price may be 20% higher than the IPO price. That's just the nature of valuing equity securities.

I don't ever buy into IPOs. And I don't "trade" securities. I would think most individuals would want to buy something and hold it -- i.e., be an investor, not a trader -- so as not to worry about short-term fluctuations in price.

[casmith07]

I won't get into too many legal specifics, as that's just opening up a can of words, but basically there are two ways a company can "go public". An initial public offering that is registered with the SEC is one way. That is what the vast majorities of companies do.

Also, if a "private" company is large enough and has a certain number of shareholders it is essentially deemed to become a "public" company such that it's required to register with the SEC and file public reports like other public companies. These rules are the only reason that Google went public for example. In 2011, the SEC began inquiries with Facebook about whether or not they would need to register because of these rules. It was inevitable that they would need to register, but going ahead and doing so in the form of a public offering has the benefit of raising capital (and providing liquidity to your existing shareholders), so that is what they did. They didn't really have much of a choice.

But that's not why they're getting bad press now. They're getting bad press now because the bankers priced the offering so high (and so large). They were able to do that only because there was enough demand to do that. Everyone and their dog wanted to be able to say that they bought into the Facebook IPO. But they didn't necessarily want to hold onto the stock long-term. So you had huge demand at the launch (or, rather, pricing) of the IPO, then later demand died down and the price dropped.

Great info, thanks for that.

[Reality]

I would think most individuals would want to buy something and hold it -- i.e., be an investor, not a trader -- so as not to worry about short-term fluctuations in price.

That is exactly the most important point that many individual investors fail to comprehend. They should invest in stocks, not trade in stocks. Playing stocks like playing slot machines will rarely lead to huge pay outs.

#reality

[Sam I Am]

That is exactly the most important point that many individual investors fail to comprehend. They should invest in stocks, not trade in stocks. Playing stocks like playing slot machines will rarely lead to huge pay outs.

#reality

I agree. *Traders* are algorithmic traders or HFT. (high frequency trader) HFTs make profits at very high risk levels and usually have to be well funded. (beyond what most people can fund on their own) To do this, you had better be a quantitative analyst with a post graduate mathematics degree or something similar. The risk is already through the roof for people who do this for a living. If you try to do it without being properly trained, you are setting yourself up to fail.

[CowboyMcCoy]

The tech industry caused the DOT-COM crash 12 years ago because VC firms overvalued pre-IPO stock prices and convinced additional rounds of investors it was a solid investment. In the real world, we call this a ponzi scheme, but in the venture capital world, apparently it is the "genius" way to make money.

People have been so high on Facebook because everyone uses it. I do not nor have I ever, but almost everyone I know does. However, there is a flaw in that thinking. There is a HUGE difference between everyone buying something and everyone using something for free.

If a company gives everything away for free of course they will become "popular", but history has shown that when you start out free and try to switch to get revenue from your users later, most of the users leave for yet another site that is "free".

Companies like Apple, Microsoft, Google, etc. all have real revenue streams which justifies most of their valuations. A company like Facebook is valued more on hype than revenue. It's the thought that because everyone uses it, everyone has their lives in it, it "will" be valuable. However, if you stop and think about it, Facebook just pulled a pre-DOT-COM IPO out of a post-DOT-COM-CRASH world.

#reality

That and if you think about ******* or yourspace since that one is censored, or also friendster.. they all proved to be somewhat worthless in the long-term. I expect the same thing for facebook.

[vta]

That and if you think about ******* or yourspace since that one is censored, or also friendster.. they all proved to be somewhat worthless in the long-term. I expect the same thing for facebook.

How valuable can a pumped up chat or forum be? It's not a tangible product and yes while it has that aspect of connecting and advertising, for the most part it's just a life diversion with people yapping and ignoring the ads. The whole 'value' of such a thing is an illusion based on a 'potential', but I'm guessing most people aren't entrepreneurs and the greater percentage use it to talk with people they don't see every day and post pictures.

[CowboyMcCoy]

How valuable can a pumped up chat or forum be? It's not a tangible product and yes while it has that aspect of connecting and advertising, for the most part it's just a life diversion with people yapping and ignoring the ads. The whole 'value' of such a thing is an illusion based on a 'potential', but I'm guessing most people aren't entrepreneurs and the greater percentage use it to talk with people they don't see every day and post pictures.

Indeed.

[Reality]

How valuable can a pumped up chat or forum be? It's not a tangible product and yes while it has that aspect of connecting and advertising, for the most part it's just a life diversion with people yapping and ignoring the ads. The whole 'value' of such a thing is an illusion based on a 'potential', but I'm guessing most people aren't entrepreneurs and the greater percentage use it to talk with people they don't see every day and post pictures.

When anything comes along and diverts the attention and time of a large number of people from existing entertainment mediums such as TV, it becomes valuable because it represents potential or lost revenue depending on how direct it replaces other mediums.

The really scary thing is that any time you put your personal information on a site, especially with the level of detail you see on Facebook, the site becomes a highly desired target for criminals and governments. The fact that people make this so easy by voluntarily adding and regularly updating their personal information is rather unbelievable.

#reality

[vta]

When anything comes along and diverts the attention and time of a large number of people from existing entertainment mediums such as TV, it becomes valuable because it represents potential or lost revenue depending on how direct it replaces other mediums.

The really scary thing is that any time you put your personal information on a site, especially with the level of detail you see on Facebook, the site becomes a highly desired target for criminals and governments. The fact that people make this so easy by voluntarily adding and regularly updating their personal information is rather unbelievable.

#reality

And it probably isn't sustainable in the long run. People get bored of these things, especially when they're not really a tangible product you can put to great use. Let the economy slump a little further and jerking around in front of a computer will fast become history.

And the crap some people put on their Facebook amazes me. Their cell number and their address, then blurt out on their feed that they're going away for vacation or worse that 'hubby' is going away for the weekend. Insane. I've had to private message some people on this and give it to them from a another perspective.

[theogt]

Anything that derives its value from people looking at it seems like an inherently risky investment to me.

[vta]

Anything that derives its value from people looking at it seems like an inherently risky investment to me.

From what I understand pron is a multi billion dollar industry. :laugh2:

[kmd24]

Anything that derives its value from people looking at it seems like an inherently risky investment to me.

I'm not too optimistic about ads as a vehicle for their success. It works for GOOG because a significant percentage of searches are to buy stuff or research stuff to buy. People don't use FB to buy stuff, they use it to socialize.

Ultimately, I think their success will turn on what's going on in the online gambling arena in the US. It would require them to execute well in a lot of areas, and it's no slam dunk, but it seems almost certain that the US will have regulated online gaming in the next few years, and when that happens, there will be hordes of companies trying to capitalize on FB. I wouldn't be surprised if FB already has a plan in place.

[Reality]

Anything that derives its value from people looking at it seems like an inherently risky investment to me.

It really comes down to why the users are there and what do they get out of the site. In the case of Facebook, they are there because everyone else is there. If a lot of people were to leave Facebook, it would cause a domino effect of users leaving. What they get out of it is communication with friends and family that is less cumbersome than email and less annoying than phone calls. More importantly, it allows them to say something once and have several people hear about it rather than make phone call after phone call or rely on others to spread the word.

The problem is that so much of what is posted on social networking sites, even by your friends and family, is worthless dribble that serves no other purpose than to dilute the overall quality and benefit of communication. The fad of Facebook has passed and while I do not believe it will go away, I do believe its popularity has peaked and its usage will continue to decline at least in this country.

#reality

[theogt]

Morgan Stanley, JP Morgan and Goldman Sachs were joint book-runners on the deal. You can see the full list of banks here.

http://www.sec.gov/Archives/edgar/data/1326801/000119312512240111/d287954d424b4.htm#toc287954_19

Ultimately it was the company's decision as to how to price and size the deal, so they deserve as much blame, if any, as the banks. I'm not sure anyone deserves blame, though. The people that bought into the IPO did so at a price they were willing to pay. And later sold at a price they were willing to sell at. In 6 months the price may be 20% higher than the IPO price. That's just the nature of valuing equity securities.

I don't ever buy into IPOs. And I don't "trade" securities. I would think most individuals would want to buy something and hold it -- i.e., be an investor, not a trader -- so as not to worry about short-term fluctuations in price.To back up what I said here, below is an except from a current WSJ article:

In some phone calls, Morgan Stanley bankers have mentioned that, while they and other underwriters helped set the price and size of the deal, [Facebook CFO David Ebersman] and other Facebook officials made the final decision to boost the price and number of shares in the $16 billion initial public offering. Facebook and Morgan Stanley agreed with the decision to boost the price and size of the deal, people familiar with the matter added.

What should be the price of Facebook's stock? MarketWatch columnist Mark Hulbert joins Markets Hub with what he says is a fair-price calculation for the social-media giant. Photo: Reuters.

Michael Pachter, an analyst at Wedbush Securities, said all the underwriters on the Facebook deal "botched it" by letting Facebook bump up the number of shares. "I think they all believed the hype and made a mistake," he said.

http://online.wsj.com/article/SB10001424052702304065704577426593357063940.html?m od=WSJ_hps_LEFTTopStories