151–160 of 164 posts
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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.
Employees are not allowed to trade in FB options.
Alternate title: FB down 20%+ since IPO You'd be gambling enough already if you bought FB stock at 20x earnings (the tech norm for well-established companies), let alone at 100x. At 20x, you'd be speculating on FB's ability to sustain its current earnings power in an increasingly competitive and verticalized space. That's a tough proposition, particularly since social graphs are not as much of a competitive moat as p…
That the social graph feeds ubiquity and vice-versa is what makes the proposition appealing.
Google+ is about the only real competition, and it's really designed for a separate purpose.
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…
Clients of investment banks in an IPO have a choice to invest or pass on the deal. There are many things they consider when making this decision, and the price of the deal is one of those. Assuming they are not given inaccurate information, they are not getting "bilked" by the banks if the stock goes down in the aftermarket. The clients know this is a possibility, and they chose to invest at $38 per share. Right now…
0. Keeps people guessing.
1. The company got most of its IPO market value, instead of having a portion extracted by Wall St. insiders.
2. The 'bubble' got popped early, which is probably a good thing for most everyone but Wall Street insiders.
3. Wall Street's ability to orchestrate asset bubbles, whether coordinated or purely emergent, and profit off them at the expense of potential crashes and financial crisies later, just took a hit.
4. There's less or no irrational exuberance this time around. The market may actually have learned from the 2000 and 2007/8 crashes.
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>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…
In the US, IPOs cannot be sold short for a month after they start trading.
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"This will require them going from a niche advertiser to taking over a significant fraction of all worldwide ad revenue, this is no small feat." But it is small for Facebook. They already have the footprint with over 9 million sites all running the Like button. Utilizing that same JS they can have a 'Social Adsense' revenue stream overnight. They can potentially grab the search queries from the headers and have impli…
And that may allow them to increase their ad revenue, perhaps even a lot. But is it enough to take control of fully 1/10th to 1/5th of all advertising spending for all media (print, television, radio, billboards, and online) for the entire world ? Imagining that capturing that much of the market is a sure thing is just silly. Are they going to be able to get circa $20 billion in ad revenue a year from the Asian marke…
They are also going to be tapping into a new market (mobile advertising) which is a market that is seeing 1.5x-2x yoy growth. Open Graph has already been proven to propel apps that use it to the top 10 of the Apple App Store. With apps paying $1 to $5 per user, Facebook is an interesting position where they can be a HUGE channel for these app companies to spend their money.
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…
If PE is so important why is LinkedIn http://www.google.com/finance?q=NYSE%3ALNKD not getting bashed as fb is. Both are kind of social networks (used differently with different target audience) . LinkedIn is trading at 600+ PE.
I know everyone keeps pointing to the 100:1 P/E but with 900 million active users that is more than 100 bucks per user. Is the average FB user worth 100 dollars to FB?
To be fair, FB doesn't need to get $100/user to be worth the $100 billion valuation. Realistically, they need to be making somewhere on the order of $6.7 billion/year to have a "healthy" P/E of 15. So, assuming that costs scale linearly with profit(they won't), FB needs to really be making around $25/user for the $100 Billion valuation to have a healthy P/E.
Business in those countries will not pay the same to publish their ads in FB, simply because the expected return will be lower.
[1] http://www.socialbakers.com/facebook-statistics/?interval=la...
I'm agree with many hn's that mobile is a general way for today Facebook. But today main Zuck plan look like a only increasing ads on Facebook - I'm talking about new Promote button - http://www.socialbakers.com/blog/587-get-ready-4-new-faceboo... Let me be honest - I'm not undersand Zuck. He have long war with Google for search traffic but still not released a Facebook Search. He can build a many new sections with new features (with ad) but still not. Well, he can experience with new brand pages (bild a new guidline and start migrate website inside Facebook and host it) or choose a absolutley new way of monetization (they are obvious) but this all still do not. I think, Zuck must hire a new CEO and calm down, then stocks can grow up to $160-$220 and more.
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I'd like for someone to explain precisely what Facebook should have done to ensure a big pop. Value the shares at $5? What if their internal projections indicated the company was worth more than that? Picking an artificially low strike price for the options probably would have resulted in people going to jail, not to mention all the employees owing taxes on the difference.
How about a time machine to take all the retail investors back to 1999? Back then everyone just piled in their orders without thinking twice. This attitude is what Wall Street was hoping would return.
http://www.nasdaq.com/symbol/gknt/interactive-chart , then click the "Max" button down the bottom ...