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Re: NASDAQ:FB

#171

Post by rprospero »

fear91 wrote: post #112
marshray wrote: post #104

Earlier quoted context omitted.

Google seems to have a pretty good track record of being a well run, profitable company. In my opinion anyway, FB still seems to be in the "do something big, figure out how to profit from it later" stage. That's all well and good, but I don't know that it's $130+ per active user good. How many ad banners are these people going to click? To put this in perspective, the initial valuation of $104B is over 2/3 the entire…

I believe that Facebook could make something like AdSense. They have vast quantities of info about people and their interests. Additionally, thanks to the huge presence of facebook tracking codes (Likes) on websites, they can track which websites you visit - additionally increasing targeting efficiency. It would be fun seeing google decreasing their margins on AdSense (38% of webmasters profit?) vs AdvFace(or somethi…

I remember hearing the same thing about TiVo. They had so much interesting information on what people were interested in that pundits predicted that they'd soon be giving away the boxes for free.

For all of Facebook's data collection, they don't seem to be able to do anything with it. To put it in perspective, I just logged onto facebook and got an ad from a company hiring coal miners. I'm asthmatic, despise big coal, currently employed, have cerebral palsy, and live three states away from this company. I could have targeted that ad better by randomly pulling a name from the phone book.

Other ads include:

* Beer - I don't drink

* Tickets to the Avengers - Okay, I do want to see that movie.

* Getting my Bachelor's Degree Online - I already have a master's degree. Facebook knows this

* Bait - While they get partial credit, since I enjoy camping, I'm not into hunting or fishing.

* Tequila - See above

* Lawn Fertilizer - I live in an apartment

* Airfare from Chicago to Oklahoma City - I don't live in Illinois or Oklahoma. Facebook knows this.

* Hunting Rifles - See above

* Vodka - See above

Conversely, Facebook should know that I'm attending a conference in DC next month, but there hasn't been any comments on restaurants or attractions in that area.

I don't deny that they have a lot of data. However, I think they're in the TiVo situation where the data simply isn't that interesting.

Re: NASDAQ:FB

#172

Post by mahyarm »

jwilliams wrote: post #141
Aqua_Geek wrote: post #135

Earlier quoted context omitted.

Is it a bad sign? Doesn't it mean that shares were priced appropriately and FB didn't leave much on the table?

It's a fine line. Markets care a lot about sentiment. A nice 10-15% pop on the first day leaves everyone feeling pretty good - and a nice halo around the company. If the price levels off.. Well people will be inclined to be more critical. They'll be wanting FB to start moving the stock north sooner. I was a bit curious about the pricing. As you say, they want the maximum investment value, but there is some sense in b…

While Zuckerberg has a complete majority, in what ways do they have to answer to shareholders? Fear of stock price drops as people sell off? Reporting requirements?

Re: NASDAQ:FB

#173

Post by jiojioiogrt »

option_greek wrote: post #162
rauljara wrote: post #130

[Kilgore Trout had written a novel call the Big Board.] It was about an Earthling man and woman who were kidnapped by extra-terrestrials. They were put on display in a zoo on a planet called Zircon-212. These fictitious people in the zoo had a big board supposedly showing stock market quotations and comodity prices along one wall of their habitat, and a news ticker, and a telephone that was supposedly connected to a…

Makes me wonder if each of us are in such environment already.

Pathetic extra, only I am real and you are all just extras.

Re: NASDAQ:FB

#174

Post by ChuckMcM »

Aqua_Geek wrote: post #135
alecco wrote: post #116

Earlier quoted context omitted.

This is a very serious warning sign, FB IPO didn't take off as some people expected. This is going to be a very important day to the valley. http://www.businessinsider.com/zynga-shares-crushed-and-halt...

Is it a bad sign? Doesn't it mean that shares were priced appropriately and FB didn't leave much on the table?

My take on it, its a non-IPO IPO, this is my reasoning.

Facebook has been trading for a while on secondmarket (a secondary market for 'qualified' investors). The prices have been pretty stable there. These people evaluate the markets in much the same way that every other trader does, and so their value calculation is going to be in line with what any 'real' trader might come up with.

Retail investors, the folks who made the dot com bubble so spectacular, have largely left the market as a mover. So any 'creative' valuations are probably not going to drive a lot of trades.

So trading on the NASDAQ opens up the process to retail investors but they aren't a significant factor, that leaves the more experienced investors and they have already valued the company and shown that on second market, so that the stock moves at all is probably more along the lines of the daily/monthly variations you might see in a Google or Apple or Groupon, rather than the sudden IPO pop of people who wanted to own the stock but were unable to get their hands on it.

That makes it a 'good' sign in the sense that the folks who valued the company in the secondary market were making pretty good guesses on the value. It is also another 'non-bubble' sign in the sense of over-exuberant participation by the retail investors.

Edit: replace 'going going' with 'not going'

Re: NASDAQ:FB

#175

Post by luser001 »

Aqua_Geek wrote: post #135
alecco wrote: post #116

Earlier quoted context omitted.

This is a very serious warning sign, FB IPO didn't take off as some people expected. This is going to be a very important day to the valley. http://www.businessinsider.com/zynga-shares-crushed-and-halt...

Is it a bad sign? Doesn't it mean that shares were priced appropriately and FB didn't leave much on the table?

People who know better can answer this more authoritatively. My two cents are:

1. Stocks are never priced "appropriately" in the US. Companies rarely adopt the Google-style book-building process (kinda like an auction).

2. FB like others was placed privately. What incentive does an investor at the roadshow have to buy it before the markets open? The incentive is the probability (nay near-certaintly) of an opening day "pop".

3. It's common for underwriters to have a 180-day lock in periods for employees who want to sell their newly-public stock (Linkedin had it iirc). This is another way to increase demand for the shares sold during the roadshow.

Re: NASDAQ:FB

#176

Post by anon808 »

twakefield wrote: post #140

Seems like Morgan Stanley and friends priced/played it perfectly for their client. Isn't that their role...to get the highest IPO price for the company they represent? It seems like the companies get screwed when there is big post IPO pop. It's a way for the banks to reward their customers at the expense of the company.

maybe. for a high profile ipo like this it's also a big marketing event, i think the company and bankers like to price in a decent bump.

but looks like now they're stepping in to support the price . . . financially good news for fb, pr-wise not so much.

http://www.bloomberg.com/news/2012-05-18/facebook-underwrite...

Re: NASDAQ:FB

#177

Post by EternalFury »

ChuckMcM wrote: post #174
Aqua_Geek wrote: post #135

Earlier quoted context omitted.

Is it a bad sign? Doesn't it mean that shares were priced appropriately and FB didn't leave much on the table?

My take on it, its a non-IPO IPO, this is my reasoning. Facebook has been trading for a while on secondmarket (a secondary market for 'qualified' investors). The prices have been pretty stable there. These people evaluate the markets in much the same way that every other trader does, and so their value calculation is going to be in line with what any 'real' trader might come up with. Retail investors, the folks who m…

You got it right, Chuck.

This is simply a transfer of wealth between Wall Street and Facebook's major shareholders. (not a broad base at all)

It was made possible because Wall Street believed every Facebook user would try to get in on the action in the open market.

It turns out retail investors and Facebook users didn't join the anticipated mania and now, the valuation of the company is what Wall Street made it out to be and not much more.

In other words, from here on, Facebook's valuation and Wall Street's ROI will solely depend on Facebook's financial success. Obviously, for Wall Street, this is much slower and much more work than having a stock take off on the basis of a mania.

If the financials don't turn up in the next few quarters, watch out.

Re: NASDAQ:FB

#178

Post by jwilliams »

mahyarm wrote: post #172
jwilliams wrote: post #141

Earlier quoted context omitted.

It's a fine line. Markets care a lot about sentiment. A nice 10-15% pop on the first day leaves everyone feeling pretty good - and a nice halo around the company. If the price levels off.. Well people will be inclined to be more critical. They'll be wanting FB to start moving the stock north sooner. I was a bit curious about the pricing. As you say, they want the maximum investment value, but there is some sense in b…

While Zuckerberg has a complete majority, in what ways do they have to answer to shareholders? Fear of stock price drops as people sell off? Reporting requirements?

Good question! One I've been trying to wrap my head around for a while. This level of control at this stage/size is unprecedented (if somebody has some good analogs I'd be interested to hear...).

There are all sorts of responsibilities and duties for an exec (of a public company in particular) - but I'd assume the FB board is insured to the hilt.

Ultimately execs always answer to shareholders (i.e. they bring a return). Otherwise the market doesn't work - the market they've used to raise 16 billion... How this will manifest for FB now and in the future, I've got no idea.

One thing happy shareholders does give you is access to future capital. However, can't see that being a problem for a while yet.

Re: NASDAQ:FB

#179

Post by gojomo »

luser001 wrote: post #175
Aqua_Geek wrote: post #135

Earlier quoted context omitted.

Is it a bad sign? Doesn't it mean that shares were priced appropriately and FB didn't leave much on the table?

People who know better can answer this more authoritatively. My two cents are: 1. Stocks are never priced "appropriately" in the US. Companies rarely adopt the Google-style book-building process (kinda like an auction). 2. FB like others was placed privately. What incentive does an investor at the roadshow have to buy it before the markets open? The incentive is the probability (nay near-certaintly) of an opening day…

Stocks are never priced "appropriately" in the US

And yet, big companies and time can change the rules. Google used the Dutch auction. Facebook has long been traded on non-public markets. Facebook also demanded lower fees from underwriters, and less first-day-pop 'money left on the table' for initial-distribution purchasers.

A negligible 'pop' could mean FB's strategy worked beautifully, capturing the maximum amount of capital for their own goals. It doesn't send the same signal as when another company, which needed more help from the underwriters and media, has a stable first-day price.

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