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Ford vs Facebook

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Re: Ford vs Facebook

#41

Post by moocow01 »

jerrya wrote: post #13
TazeTSchnitzel wrote: post #11

Earlier quoted context omitted.

Facebook does make it surprisingly easy to get a copy of all your data. There's a single big button on the site which will make a ZIP file containing all your data on Facebook, except for data stored in Apps (outside of FB's control), and comments you've made on other people's posts. It will even tell you your previous IP addresses and I think auth tokens.

I'm thinking more of API access so that external apps can be created to link Facebook to other networks, so that tweets and google plus and tumblr posts and all that stuff can just flow from one network to the next like telephone calls can do now. I just clicked on "Start my archive", Facebook will email me when they are done zipping it up.

This was more or less what Opensocial was trying to do but I believe it is pretty much dead.

Re: Ford vs Facebook

#42

Post by photon137 »

rabidsnail wrote: post #23

Valuation lower than assets means you get eaten by corporate raiders, unless you're as big as Ford or the majority of the stock is held by a single family. That just shows how unhealthy Ford is.

You mean equity valuation lower than book value of equity. Assets don't come into the picture at all.

Re: Ford vs Facebook

#43

Post by powertower »

> You forgot one important thing: Potential for Growth

The key to understand this madness is so right in front of our faces, that we can't even see it.

Due to the dynamics/nature of the market, stock investments seems to be more about a gamble today, and you can't gamble on Ford too much except for it to go down.

Forget trying to spot the value. It's all about what's hot.

Hence Facebook is getting crazy valuations.

Re: Ford vs Facebook

#44

Post by HackersCapital »

photon137 wrote: post #39
HackersCapital wrote: post #35

Ford IS more valuable that facebook. This guy's analysis is an apples to oranges comparison. Ford has $100.5 billion in debt and facebook has no debt - the companies should be compared based on enterprise value: Enterprise value in billions = market capitalization + debt - cash Ford’s enterprise value = 40.4 + 100.5 - 15.2 = $125.7 Billion facebook’s enterprise value = 90 + 0 - 1.5 = $88.5 Billion See here for a post…

Wrong. EV should include debt at _market value_. FB could just as easily issue debt in billions and I'd think that the market will be valuing it higher than that of Ford's for the same issue coupon (which just came back into the investment grade club after residing in the junk club for quite a while). FB would probably have a good income-to-interest coverage ratio if it ever issued debt so the discounting of its debt…

I will take a look at the book value of Ford's debt tomorrow on Bloomberg. I agree that the market value of debt should be used for the analysis, but I don't think it will change the conclusion.

Re: Ford vs Facebook

#45

Post by photon137 »

HackersCapital wrote: post #44
photon137 wrote: post #39

Earlier quoted context omitted.

Wrong. EV should include debt at _market value_. FB could just as easily issue debt in billions and I'd think that the market will be valuing it higher than that of Ford's for the same issue coupon (which just came back into the investment grade club after residing in the junk club for quite a while). FB would probably have a good income-to-interest coverage ratio if it ever issued debt so the discounting of its debt…

I will take a look at the book value of Ford's debt tomorrow on Bloomberg. I agree that the market value of debt should be used for the analysis, but I don't think it will change the conclusion.

It will. Issued debt rarely ever trades at 100 (except in special cases - ie debt near maturity etc).

And, in any case, you cannot compare market values of two companies with different leverages such as FB and Ford without renormalizing earnings to the same leverage level. Earnings on equity are amplified if the company has debt (which Ford has). FB has no leverage - its unleveraged earnings give it a whopping market value of $95B. Ford can't even manage half of that figure with its $100B (!) of debt.

Edit: I am relying on your figures.

Re: Ford vs Facebook

#46

Post by natnat »

rabidsnail wrote: post #23

Valuation lower than assets means you get eaten by corporate raiders, unless you're as big as Ford or the majority of the stock is held by a single family. That just shows how unhealthy Ford is.

That's not true. Ford is more than $100 billion in debt. If a corporate raider were to take over Ford, they would be saddled with a ton of debt too, making such a takeover a much less attractive option.

Re: Ford vs Facebook

#47

Post by rabidsnail »

natnat wrote: post #46
rabidsnail wrote: post #23

Valuation lower than assets means you get eaten by corporate raiders, unless you're as big as Ford or the majority of the stock is held by a single family. That just shows how unhealthy Ford is.

That's not true. Ford is more than $100 billion in debt. If a corporate raider were to take over Ford, they would be saddled with a ton of debt too, making such a takeover a much less attractive option.

I didn't say that Ford is going to get raided. In fact I said that it isn't, because there isn't anybody big enough to do it.

Although there probably is some way to siphon off the assets and default on the debt without committing fraud.

Re: Ford vs Facebook

#48

Post by photon137 »

rabidsnail wrote: post #47
natnat wrote: post #46

Earlier quoted context omitted.

That's not true. Ford is more than $100 billion in debt. If a corporate raider were to take over Ford, they would be saddled with a ton of debt too, making such a takeover a much less attractive option.

I didn't say that Ford is going to get raided. In fact I said that it isn't, because there isn't anybody big enough to do it. Although there probably is some way to siphon off the assets and default on the debt without committing fraud.

Yes, there is :). Take equity control of the company (which should be cheap enough for a badly-doing company) - now you'd have control over the financing decisions of the company. Issue "junior" debt uncollateralized by the company's assets. Use the cash so raised to buy off "senior"/"secured" debt outstanding in the market. When the company goes into bankruptcy, you get the first cut on the assets :).

PS: Actually it's not so simple - when the company is highly leveraged, existing bondholders often do have a say in future financing decisions of the company.

Re: Ford vs Facebook

#49

Post by muyuu »

DVassallo wrote: post #4
AndrewDucker wrote: post #3

Earlier quoted context omitted.

Users and pageviews are _potential_ assets. You cannot sell either of those things, but you might find ways of making them produce money.

There are many other intangible assets that produce money but are not easily sell-able: Trademarks, human capital, trade-secrets, other intellectual property, etc.

All of these would be in Ford's side without any doubt. Maybe profit-per-capita is the single benchmark they'd clearly lose at, and the fact that their workforce is largely unionized, which is a serious risk in times of hardship (they'd find themselves unable to cut expenses significantly, as it has happened many times in the past).

Ford vs Google might be a close one in terms of IP - hard to compare across industries though - but vs Facebook it's quite one-sided for Ford.

Re: Ford vs Facebook

#50

Post by D_Alex »

photon137 wrote: post #32
johnhartigun wrote: post #17

Earlier quoted context omitted.

Investors don't invest because of curiosity. They want to earn money.

Investors care about marginal returns. An additional $1 invested into Ford won't bring as much returns as an additional $1 invested in Facebook. Ford's is a capital-intensive business. That's what gives it hard assets that make its market cap 70% of assets (btw, the author totally forgets the liability side of equation - equity investors aren't owed assets - they are owed (assets - liabilities) - look at big banks, t…

"An additional $1 invested into Ford won't bring as much returns as an additional $1 invested in Facebook."

I don't know what investment opportunities Ford has, but regarding Facebook, I really don't think they can invest additional capital sensibly. An additional $1 invested in Facebook will end up being an additional $1 paid for some Instagram-like acquisition.

Furthermore, additional $$ spent on Facebook IPO stock will just end up an additional $$ in the founders' pockets.

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