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View Full Version : How many have jumped on the Facebook bandwagon?



Uncle Bill
05-22-2012, 02:51 PM
Just curious if any RTFers bought into the hype of the recent weeks. I did not climb on board, despite the various arm-twisting schemes sent to me. I went along with this advice from one of my better newsletter advisors:

"Speaking of nonsense, Facebook went public on Friday, debuting at $38 per share. The question is, “What does Facebook actually do?” That’s a really good question. Other than providing a platform for stalking old flames and allowing grandmothers and potential employers to pass judgment on your postings, there is a rising sense that Facebook doesn’t have a clear business path. The revenues of the company are just over $4 billion, while the profits were $650 million. While this is good money, it doesn’t suggest a company valuation of $100 billion… not by a long shot. And there is the question of whether or not the company will sustain its revenue, given the unproven nature of its advertising model. However… and there is a BIG however… the company is raising tens of billions of dollars. These funds will serve as a mighty war chest that it can use to acquire many other tech companies. Remember, Amazon started as a book selling website. Watch for Facebook to scramble for ways to increase revenue. If they can’t generate organic growth, they’ll start buying it through accretive acquisitions."

Also of interest to me would be how many of you that invest in the markets, consider Greece to still be a certain collapse in the near future...and Spain to follow along? Do you see this as causing the U.S. lots of problems...in the near future, or farther down the road?

UB

ssramage
05-22-2012, 02:53 PM
http://finance.yahoo.com/blogs/daily-ticker/facebook-bankers-secretly-cut-facebook-revenue-estimates-middle-133648905.html

BonMallari
05-22-2012, 03:03 PM
it closed at 30.97 over 7 dollars down from the IPO...had FB gone public three or four years ago who knows, but the only ones who made money on this deal are Zuckerberg and his investors like rocker Bono from U2

helencalif
05-22-2012, 04:29 PM
I didn't jump on it.. and am glad I didn't. As it stands today, a lot of folks have lost money if they sell. Investigations are starting. I suspect a scandal brewing over the IPO price of $38 and how it was set... and then the bad news about advertisers pulling out which were factors in the downward spiral.

mngundog
05-22-2012, 04:38 PM
I didn't jump on it.. and am glad I didn't. As it stands today, a lot of folks have lost money if they sell. Investigations are starting. I suspect a scandal brewing over the IPO price of $38 and how it was set... and then the bad news about advertisers pulling out which were factors in the downward spiral.
Investigation for what? Overpricing there IPO, I've never heard of that as being a crime.

ARay11
05-22-2012, 04:49 PM
The problems with Facebook:

1: Whatever happened to MySpace? Oh yeah, Facebook.

2: The only reason social sites are used is because they are FREE.

3: #1 daily user of said social platforms: Teenagers (y'know...the ones without jobs to whom the advertising means nothing because they have no money to spend their only concern is whether or not Timmy or Tommy might *poke* them that day)

4: I enjoy a little FB time myself...but the minute they try to charge me for it, I will be out. Most others feel the same way.

mngundog
05-22-2012, 05:01 PM
The problems with Facebook:

3: #1 daily user of said social platforms: Teenagers (y'know...the ones without jobs to whom the advertising means nothing because they have no money to spend their only concern is whether or not Timmy or Tommy might *poke* them that day)

The last figures I saw of Facebook users said 90% of users were 18 and older.

Franco
05-22-2012, 05:13 PM
I don't trust the stock market, therefore I don't buy stocks.
I've use FB to connect with a lot of old friends and classmates that I haven't communicated with in decades.
Yes, the stock will be over-priced until they figure out a way to cash in on 500,000,000 users.
If they do start charging a subscription price, depending on the cost, I might stay or leave.

Cody Covey
05-22-2012, 05:41 PM
The problems with Facebook:

1: Whatever happened to MySpace? Oh yeah, Facebook.

2: The only reason social sites are used is because they are FREE.

3: #1 daily user of said social platforms: Teenagers (y'know...the ones without jobs to whom the advertising means nothing because they have no money to spend their only concern is whether or not Timmy or Tommy might *poke* them that day)

4: I enjoy a little FB time myself...but the minute they try to charge me for it, I will be out. Most others feel the same way.

How are any of those things a problem?

1.) Myspace tailored itself towards marketing musicians and didn't have great security. That is why people moved from myspace to facebook in droves

2.) They will continue to be free and no mention has been made otherwise. As long as Facebook is Zuckerbergs it will not be a paid service.

3.) This is just wrong no matter which way you look. That would be like saying Mattel shouldn't advertise anymore because the kids aren't running to their parents saying they want the new toy...

4.) Again you will not be charged for it...ever.

I don't understand why people think that you are all of a sudden going to be charged for facebook.

This always happens with IPO offerings. It shoots up and people sell their stocks and then it goes back down. A first day buy was dumb for small time buyers but for the people who could move a bunch of cash it was probably great.

With just under a billion users to think that faceboook is all of a sudden going to go somewhere or that ad revenues are going to stop is ridiculous.

Marvin S
05-22-2012, 06:01 PM
Just curious if any RTFers bought into the hype of the recent weeks. I did not climb on board, despite the various arm-twisting schemes sent to me. I went along with this advice from one of my better newsletter advisors:

"Speaking of nonsense, Facebook went public on Friday, debuting at $38 per share. The question is, “What does Facebook actually do?” That’s a really good question. Other than providing a platform for stalking old flames and allowing grandmothers and potential employers to pass judgment on your postings, there is a rising sense that Facebook doesn’t have a clear business path. The revenues of the company are just over $4 billion, while the profits were $650 million. While this is good money, it doesn’t suggest a company valuation of $100 billion… not by a long shot. And there is the question of whether or not the company will sustain its revenue, given the unproven nature of its advertising model. However… and there is a BIG however… the company is raising tens of billions of dollars. These funds will serve as a mighty war chest that it can use to acquire many other tech companies. Remember, Amazon started as a book selling website. Watch for Facebook to scramble for ways to increase revenue. If they can’t generate organic growth, they’ll start buying it through accretive acquisitions."

Also of interest to me would be how many of you that invest in the markets, consider Greece to still be a certain collapse in the near future...and Spain to follow along? Do you see this as causing the U.S. lots of problems...in the near future, or farther down the road?

UB

As with many things financial FB is a little hard to understand :). But so was AMZN, which for the life of me I cannot figure out how they make money (very good money) on logistics with normal stuff. AMZN is spending beaucoup bucks building office towers in the center of Seattle to house their work force, some of which are well compensated, & I can't explain that for the life of me :confused:. How does GOOG make money & YHOO not so much? Again something I don't understand. But I can barely use my cellphone so am not the person to be evaluating this stuff. & MSFT was not the hotshot of the 6 IPO's that went public about the same time 4 of which no longer exist, a few of us missed that :). But I also missed on INTL @ $9 several splits ago when someone brought it up @ the stock club.


You also have to consider - 2.5B shares already so not a lot of room for splits. For some reason splitting becomes non existent when they get that number of shares.


If FB continues to crater I will probably make a bet on it as I am willing to bet that Buckerzerg & his brainy minions will come up with a game plan to create a viable company. So the question to me is, if FB can match GOOG's price, where would a good entry point be. Certainly not $38 - maybe 1/2 of that? I don't know but will consider that a possible entry point. 30 to 1 is a good bet in any horse race ;-).

Cody Covey
05-22-2012, 11:33 PM
As with many things financial FB is a little hard to understand :). But so was AMZN, which for the life of me I cannot figure out how they make money (very good money) on logistics with normal stuff. AMZN is spending beaucoup bucks building office towers in the center of Seattle to house their work force, some of which are well compensated, & I can't explain that for the life of me :confused:. How does GOOG make money & YHOO not so much? Again something I don't understand. But I can barely use my cellphone so am not the person to be evaluating this stuff. & MSFT was not the hotshot of the 6 IPO's that went public about the same time 4 of which no longer exist, a few of us missed that :). But I also missed on INTL @ $9 several splits ago when someone brought it up @ the stock club.


You also have to consider - 2.5B shares already so not a lot of room for splits. For some reason splitting becomes non existent when they get that number of shares.


If FB continues to crater I will probably make a bet on it as I am willing to bet that Buckerzerg & his brainy minions will come up with a game plan to create a viable company. So the question to me is, if FB can match GOOG's price, where would a good entry point be. Certainly not $38 - maybe 1/2 of that? I don't know but will consider that a possible entry point. 30 to 1 is a good bet in any horse race ;-).

The short of Google vs Yahoo is that no one uses Yahoo really. At best they are a news site these days. Google is a noun as well as a verb these days. Also Google does many other things and owns TONS of patents, not that they created those things but when you get to be a decent sized tech company you start to buy patents to make money off royalties etc. Much off the internet is based off ad revenue. You offer free content and put Google Ad Words on your site and get a bunch of hits and youre a millionaire. (Literally) The tech business is a different animal all together and is something a lot of people are unable to understand because a lot of times it doesn't work the same way as other markets. A lot of people are fretting that Facebook doesn't provide a service so it is going to die. Facebook provides an entertainment service and is extremely successful at that. I don't see why people see Facebook any different than a television station only with exponentially more users.

huntinman
05-23-2012, 07:32 AM
The short of Google vs Yahoo is that no one uses Yahoo really. At best they are a news site these days. Google is a noun as well as a verb these days. Also Google does many other things and owns TONS of patents, not that they created those things but when you get to be a decent sized tech company you start to buy patents to make money off royalties etc. Much off the internet is based off ad revenue. You offer free content and put Google Ad Words on your site and get a bunch of hits and youre a millionaire. (Literally) The tech business is a different animal all together and is something a lot of people are unable to understand because a lot of times it doesn't work the same way as other markets. A lot of people are fretting that Facebook doesn't provide a service so it is going to die. Facebook provides an entertainment service and is extremely successful at that. I don't see why people see Facebook any different than a television station only with exponentially more users.

The major difference here is that FB is able to "mine" it's vast field of users data and sell that info to advertisers. FB can be so much more specific as to users preferences such as time of day, length of time they are on etc. Most TV stations can't touch that. They may not have refined how they are going to capitalize on the advetising sales end yet... but they will.

ARay11
05-23-2012, 10:06 AM
The last figures I saw of Facebook users said 90% of users were 18 and older.

Check out the difference between "daily user" and "user"
Millions are registered.... but don't use "daily"

huntinman
05-23-2012, 10:19 AM
I can remember a time when lots of people (myself included) poo-poo'd email as a waste of time. It would never work, who would use it etc... Now we can't live without it. We all scoff at change and new technology... Remember when we were saying whats a google? I agree with a lot of the skepticism of FB, but I also remember my own skepticism of a lot of things I now use all day long every day...

ARay11
05-23-2012, 10:32 AM
How are any of those things a problem?

1.) Myspace tailored itself towards marketing musicians and didn't have great security. That is why people moved from myspace to facebook in droves FBs only revenue is from Advertisers. When the ads over run the site... everyone will flock away from it and go "in droves" to the next, free, no hassel site

2.) They will continue to be free and no mention has been made otherwise. As long as Facebook is Zuckerbergs it will not be a paid service. -- This is not a problem for the user... this is a problem for FB. They gain ZERO dollars from their USERS. When you provide a service, and receive ZERO dollar for your service, this is a problem for INVESTORS. If you want someone to have faith and INVEST in your company.. Be prepared to show GROWTH, and REVENUE from your primary USER.

3.) This is just wrong no matter which way you look. That would be like saying Mattel shouldn't advertise anymore because the kids aren't running to their parents saying they want the new toy. These kids DO NOT look at the ads. Go ask a teenager how many ads caught their eye that day. It's not the same as a TV commercial. More like a magazine ad... they pay zero attention to them.

4.) Again you will not be charged for it...ever. Exactly. Again, not a problem for me, but a huge problem for an investor.

FB has zero growth platform... what are they going to do? Sell more ads? Those ads will drive people away.

I don't understand why people think that you are all of a sudden going to be charged for facebook.
I do not think FB will ever charge for their services... but that is a problem for investors.... and the OP asked if anyone were interested in INVESTING in this STOCK. These are all reasons why I am not interested in an over valued stock trading at 50x earnings with zero growth platform.

This stock should have opened in the $15-$20 range.

This always happens with IPO offerings. It shoots up and people sell their stocks and then it goes back down. A first day buy was dumb for small time buyers but for the people who could move a bunch of cash it was probably great.
It was a dumb buy for small buyers.... and a dumb buy for big buyers.... IPO's always lose "a little" ... but we are talking about a 20%-30% drop in the first days. You must remember... this time it's not just "the little guy" that got burned here.... major banks, major investors, and major people got the shaft. The SEC will have a hayday on this one.

With just under a billion users to think that faceboook is all of a sudden going to go somewhere or that ad revenues are going to stop is ridiculous. I never said FB was going anywhere (only that any change in their services could drive people away).... just that they are a crappy stock for investing and if they plan to CHANGE that fact, they are going to have to do something different.. like find revenue GROWTH (which there aren't many avenues for that GROWTH if they dont charge the USER which they swear they will not do). When an IPO is grossly overvalued and sold as being "of value".... the SEC will be knocking at the door.

ARay11
05-23-2012, 10:40 AM
I can remember a time when lots of people (myself included) poo-poo'd email as a waste of time. It would never work, who would use it etc... Now we can't live without it. We all scoff at change and new technology... Remember when we were saying whats a google? I agree with a lot of the skepticism of FB, but I also remember my own skepticism of a lot of things I now use all day long every day...


FB is an awesome service and they may grow over time with some revenue source changes.... but that doesn't mean that the $38/share valuation was right. This should have opened at around $15-$20 per share based on earnings. That's why folks are burnin hot mad over it and the SEC will be involved.

huntinman
05-23-2012, 10:42 AM
FB is an awesome service.... but that doesn't mean that the $38/share valuation was right.



that's fine by me, I never said it was

ARay11
05-23-2012, 10:52 AM
[QUOTE=Marvin S;969749]As with many things financial FB is a little hard to understand :). But so was AMZN, which for the life of me I cannot figure out how they make money (very good money) on logistics with normal stuff. AMZN is spending beaucoup bucks building office towers in the center of Seattle to house their work force, some of which are well compensated, & I can't explain that for the life of me How does GOOG make money & YHOO not so much? Again something I don't understand. But I can barely use my cellphone so am not the person to be evaluating this stuff. & MSFT was not the hotshot of the 6 IPO's that went public about the same time 4 of which no longer exist, a few of us missed that :). But I also missed on INTL @ $9 several splits ago when someone brought it up @ the stock club.


You also have to consider - 2.5B shares already so not a lot of room for splits. For some reason splitting becomes non existent when they get that number of shares.
:-? and the employees were given an option in January of either holding or selling their given shares.

If FB continues to crater I will probably make a bet on it as I am willing to bet that Buckerzerg & his brainy minions will come up with a game plan to create a viable company. So the question to me is, if FB can match GOOG's price, where would a good entry point be. Certainly not $38 - maybe 1/2 of that? I don't know but will consider that a possible entry point. 30 to 1 is a good bet in any horse race I'm personally hoping for about a $20/share price...that'd put em closer to being in line with earnings .... :grab: then folks can grab em up and hold on tight :)

ARay11
05-23-2012, 11:03 AM
As I write, shareholder suits have already been filed in New York and California. The State of Massachusetts has subpoenaed Morgan Stanley (MS (http://finance.yahoo.com/q?s=ms&ql=1)), following reports that it allegedly only told a few of its best clients that its analyst was cutting his revenue outlook for the company. The entire underwriting syndicate (http://www.bloomberg.com/news/2012-05-23/morgan-stanley-goldman-sachs-sued-over-facebook-ipo.html) --(GS (http://finance.yahoo.com/q?s=gs&ql=1)), (JPM (http://finance.yahoo.com/q?s=jpm&ql=1)), (BAC (http://finance.yahoo.com/q?s=bac&ql=1)), (BCS (http://finance.yahoo.com/q?s=BCS&ql=0))-- is being sued, as is Facebook's newlywed CEO and several board members. In addition, the Nasdaq (NDAQ (http://finance.yahoo.com/q?s=NDAQ&ql=0)) has also been sued, and the SEC and FINRA are launching investigations (http://news.yahoo.com/facebook-shares-fall-valuation-doubts-rise-134021413--sector.html). Congressional hearings and probes can't be far off.