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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?
Earlier quoted context omitted.
I would argue that the drop isn't from the market acting rationally at all, but in response to yet more hype supplied by the press, specifically the "how low will it go?" narrative you mention.
I disagree. While the market hasn't been acting too rationally in general over the last few years, FB dropping like a rock is actually a fairly rational response to their circumstances. FB made less money in Q1 2012 than in Q1 2011. That was reported by them before the IPO. FB blamed it on the fact that more users are accessing Facebook through their mobile clients, which don't get them as much advertising money. Nor…
Normally a private company cannot have most than 500 stockholders. Facebook obviously has more than that number of employees. They previously applied for and got an exemption from the SEC on the basis that most stockholders were employees.
That all changed early last year with Goldman Sachs' "investment vehicle" of holding stock on behalf of clients (a move the SEC will see through). That was deliberately done in January as it put a clock on filing for IPO by April this year, which is what happened.
Now they may have wanted to go public anyway. Whether or not they wanted to they signaled this event over a year ago.
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…
>Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Why do you think the momentum of their stock has an effect on facebook's ability to attract talent? That's certainly not something I'm looking at (future stock price, yes; current momentum, no). Facebook's stock performance thus far has not changed my view of the potential future success of the company, and I think anyone who has actually done their homework regarding the Facebook valuation would feel the same way.
Earlier quoted context omitted.
It's 900 million monthly active users. Say what you will about FB but they don't use vanity metrics.
>It's 900 million monthly active users This number has always irked me. How many of those are unique? And I don't mean unique accounts, I mean actually unique people . I did some work in the social gaming space. We would routinely discover people with 5, 10, sometimes 20+ Facebook accounts that would be logged in and actively used in order to "game" social gaming mechanics ("add 10 friends!", "log in 10 days in a row…
In 1 month the price will be back to, or above, the original IPO.
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?
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…
The employees, they dumped a lot of their shares probably. They are allowed since Monday to sell them.
How many shares did the employees own? Even if they all sold all of them, is it really enough to have a meaningful impact on the price of the stock with that much trading volume and that large of a market cap? Probably not!
Even if you don't, a huge slab of the company is owned by current and former employees.
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…