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Facebook trades under $30, down 7%+

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Re: Facebook trades under $30, down 7%+

#41

Post by bignoggins »

MisterBastahrd wrote: post #37
ddet wrote: post #4

FB IPO is bad for the startup world

FB's IPO is based on imaginary numbers. 900 million users? How many actual users. Seems to me that the suits REALLY wanted to make this a $100B company regardless of how much worth it actually had. There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebo…

It's 900 million monthly active users. Say what you will about FB but they don't use vanity metrics.

Re: Facebook trades under $30, down 7%+

#42

Post by mattlong »

nicholassmith wrote: post #30

Does anyone have any insider info on when Facebook's employee lockup period ends? The shares won't end up worthless but I can't see them being worth billions.

Employees are typically awarded stock options with a non-zero strike price based on the FMV of the company at the time the options grant. Those options very well could end up worthless.

Re: Facebook trades under $30, down 7%+

#43

Post by fijal »

ddet wrote: post #4

FB IPO is bad for the startup world

FB IPO is bad for the inflated startup world around the FB ecosystem. All stuff "social" and "connected". It's hopefully good for everyone else who is bringing some value, but was turned down/undervalued, because they're not social enough.

Re: Facebook trades under $30, down 7%+

#44

Post by asdf333 »

jonknee wrote: post #17
Osiris wrote: post #2

While the IPO was bad for investors, it was certainly good (financially) for Facebook. They definitely maximized their earnings from the IPO and Zuckerberg really made out well getting just under $38/share for his $1.1bn in shares. In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did.

> In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did. Google priced their shares based on an auction, I'd say it was priced right. It was also much smaller because it wasn't a bunch of insiders trying to dump their shares at an inflated value. Google sold 19.6M shares, 14.1M of them…

While this is anecdotal, some ibanking friends told me that alot of the traditional wall street banks 'boycotted' google for going w/ a smaller player who did a non-traditional format (auctions) that threatened their business model and that resulted in lower demand (and lower price) for their shares at IPO than would have otherwise been the case.

Re: Facebook trades under $30, down 7%+

#45

Post by tomkarlo »

Osiris wrote: post #2

While the IPO was bad for investors, it was certainly good (financially) for Facebook. They definitely maximized their earnings from the IPO and Zuckerberg really made out well getting just under $38/share for his $1.1bn in shares. In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did.

The game is not as simple as maximizing the value of just the shares being sold on day 1. Post-IPO, a company's shareholders are largely the same as pre-IPO... the value they achieve for their shares in will be determined over a much longer time frame. Reputation / performance matters.

Re: Facebook trades under $30, down 7%+

#46

Post by ryanmerket »

cletus wrote: post #40

There are only two parties hurt by this: 1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and 2. Facebook. (1) I don't care about. (2) is the interesting one. You'll note that I don't include the employees in the list of injured parties. They're largely in a lockout anyway (I assume?). Whether it opens at $38 and drops to $30 or starts at $20 and…

How can you say the P/E isn't justified when Facebook isn't monetizing +60% of their impressions (mobile)?

Re: Facebook trades under $30, down 7%+

#47

Post by tomkarlo »

zgohr wrote: post #31
rondon1 wrote: post #14

Morgan Stanley has been putting in floors to keep this stock from totally crashing. They cannot keep it up forever.

Do you have proof? I know that on opening Friday we saw it sit at $38.00 and that was obviously MS, but since then I don't see any evidence in the stock price that this has happened since. On the 23rd the stock traded at 31.53 a few times but later in the day traded at 31.52. I'd love to see MS take a beating for that 100m they got for underwriting this poorly orchestrated IPO, I just haven't been able to see it happ…

At least for the first day, this was documented (and expected) from the underwriters. http://www.businessinsider.com/facebook-banker-morgan-stanle...

Underwriters start out with a net short position on an IPO so that they can step in to support if necessary.

Re: Facebook trades under $30, down 7%+

#48

Post by hughw »

mattlong wrote: post #42
nicholassmith wrote: post #30

Does anyone have any insider info on when Facebook's employee lockup period ends? The shares won't end up worthless but I can't see them being worth billions.

Employees are typically awarded stock options with a non-zero strike price based on the FMV of the company at the time the options grant. Those options very well could end up worthless.

I imagine many of them hedged with options on the open market.

[edit] I just learned below that that market just opened, so that strategy must not have been available to them.

Re: Facebook trades under $30, down 7%+

#49

Post by Cushman »

cletus wrote: post #40

There are only two parties hurt by this: 1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and 2. Facebook. (1) I don't care about. (2) is the interesting one. You'll note that I don't include the employees in the list of injured parties. They're largely in a lockout anyway (I assume?). Whether it opens at $38 and drops to $30 or starts at $20 and…

> Anyway, I'm glad about this drop. Not out of any kind of schadenfreude but because the market is acting... rationally. These P/Es were never justified and instead of not mattering and the stock skyrocketing anyway (which would happen were we in a bubble, which we are not), the stock is seeking a more appropriate level.

Agreed entirely. Everyone's been acting disappointed by the lack of an IPO extravaganza, but that would have been horrifying-- this drop should be heartening to anyone in tech.

Re: Facebook trades under $30, down 7%+

#50

Post by ryanmerket »

bignoggins wrote: post #41
MisterBastahrd wrote: post #37

Earlier quoted context omitted.

FB's IPO is based on imaginary numbers. 900 million users? How many actual users. Seems to me that the suits REALLY wanted to make this a $100B company regardless of how much worth it actually had. There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebo…

It's 900 million monthly active users. Say what you will about FB but they don't use vanity metrics.

50% of which are daily active users.
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