141–150 of 164 posts
I predict that Facebook is going to have a hard time hiring good talent now. This is one of the downsides of filling up your stock with a lot of hot air. It's all short term gain.
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If you wanted to value it at $25-$50B, the share price would accordingly be $12-$24. Remember market cap = total shares * price. :)
You assume that the number of shares being offered was static, hence the price drop by half. More realistically, Facebook should have sold less shares, which would have kept the price at that target. But I guess it couldn't sell less: they had a bucketload of people who wanted to sell, and all the biggest potential buyers had already bought... Lesson learned: don't get talked into secondary market abuse...
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From what I've seen, it was hugely overvalued. Maybe $25-$50 billion, with a share price of $28-$32. Last minute change to $38+ was suicide.
If you wanted to value it at $25-$50B, the share price would accordingly be $12-$24. Remember market cap = total shares * price. :)
Website becomes popular.
Website gets personal details from users: email, maybe photos, address, etc., plus it gets a list of "friends" for each user.
Website shows display ads.
(Website gives birth to games company. Games company goes public then loses half its value in two months.)
Does website have a "business model"?
Wait, we're not done.
Website monitors everything users do on the website as well as, to the extent they can, the other websites users visit, using web beacons scattered across the web (Like buttons, aka "Facebook Connect").
Website shows display ads.
Do we have a business model yet?
But wait, there's more.
Website goes public and raises a heap of easy cash.
Website acquires a web browser, produces a mobile phone and begins monitoring everything users do on the web and every conversation they have with their friends.
Website shows display ads.
Do we have a business model yet?
Or is this just lots and lots of spying, information collection and dreaming that this is somehow useful for business?
Display ads are not a business model that will grow a business, unless the business is itself a display ad company.
(And Google already acquired those guys years ago.)
Let's look at this in simple terms. Let's look for evidence of a "business model". Website becomes popular. Website gets personal details from users: email, maybe photos, address, etc., plus it gets a list of "friends" for each user. Website shows display ads. (Website gives birth to games company. Games company goes public then loses half its value in two months.) Does website have a "business model"? Wait, we're no…
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…
>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. Wrong. FB did crazy volume on the first day at $45 to $38. 580 million shares were traded and the total number of shares in IPO was only ~470MM IIRC. That does not mean that the big clients unloaded all their shares because of shares getti…
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And how much of your own money are you putting where your mouth is on that one? If you're right, you could make a lot of money with that bet.
How much money did these people that "knew it would fail, of course!" put on shorting it when it was $35? If any of the people that "knew $38 was way too high" had done that, they'd be out counting their money on a beach, not sitting at their desk. It's all just hindsight garbage.
Let's look at this in simple terms. Let's look for evidence of a "business model". Website becomes popular. Website gets personal details from users: email, maybe photos, address, etc., plus it gets a list of "friends" for each user. Website shows display ads. (Website gives birth to games company. Games company goes public then loses half its value in two months.) Does website have a "business model"? Wait, we're no…
I thought they are already making money.
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It would be higher relative to the IPO price . Among other things, this means that employee options would still be above water. Rather more motivating than underwater options after years of death-march hours.
All employees since 2008-ish have gotten RSUs, not options.
I never checked my FB options package. Largely on account of not receiving one.