Face(palm)Book

[YosemiteSam]

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

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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

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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

 

[casmith07]

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

 

[YosemiteSam]

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.

 

[YosemiteSam]

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.

 

[YosemiteSam]

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.

 

[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.

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.

 

[YosemiteSam]

Well, that would be scalping.

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.