Facebook IPO watch.

[kevman]

Good for you. But if you were committed to buying this stock at it's current lofty valuation (even at $32) maybe you should let a professional do your trading, or not be in the market at all.

You are right, I do need to leave it to the pro's. I was trying to dabble in this but it is well beyond my understanding. I bought in thinking it was going to jump up 10-15% and then I'd be able to make a quick buck and drop out. Obviously that is not what happened. I'm going to get some advisers and start parking my money in long term stuff. I am not market savvy by any means and I don't think I have the capacity to become good at it at this stage in my life.

 

[nboy22]

Complete stock noob here. How is it that facebook is valued at $100 billion? From what I understand there is nowhere near $100 billion in stock shares. Is this correct?

I found an article stating that facebook "brought in about $3.7 billion in revenue and made $1 billion in profit in 2011." If this is true, how can the company be even remotely close to $100 billion?

 

[Rudee]

Complete stock noob here. How is it that facebook is valued at $100 billion? From what I understand there is nowhere near $100 billion in stock shares. Is this correct?

I found an article stating that facebook "brought in about $3.7 billion in revenue and made $1 billion in profit in 2011." If this is true, how can the company be even remotely close to $100 billion?

$100 billion was to represent the intended market capitalization of it's stock. Share price x number of outstanding shares. It got to over $115 billion briefly when it hit $45 on opening day, but has been losing a few billion in market cap each day since. $10 billion of market cap has been wiped out in a mere 3 trading days.

 

[nboy22]

$100 billion was to represent the intended market capitalization of it's stock. Share price x number of outstanding shares. It didn't quite get there.

Ok, we're getting somewhere. So even though it didn't get there, there is obviously a lot of money invested. I still don't see how it can be worth so much if they only make $1 billion a year. I, along with many, believe that facebook is pretty much at its pinnacle. If it were at its pinnacle and facebook stock was say $90 billion, doesn't that mean it would take nearly 80-90 years for it to make it truly worth its stock?

Something just doesn't add up here... I suppose we just make up fake values for companies in the stock market? Again, I am a stock noob, but i just don't even see how facebook is worth anywhere near even 20 billion

 

[actuarial]

Complete stock noob here. How is it that facebook is valued at $100 billion? From what I understand there is nowhere near $100 billion in stock shares. Is this correct?

I found an article stating that facebook "brought in about $3.7 billion in revenue and made $1 billion in profit in 2011." If this is true, how can the company be even remotely close to $100 billion?

It's worth whatever people are willing to pay for it. In terms of it being a smart investment, at that market capitalization there would need to be MASSIVE expected growth in earnings going forward.

 

[actuarial]

Something just doesn't add up here... I suppose we just make up fake values for companies in the stock market? Again, I am a stock noob, but i just don't even see how facebook is worth anywhere near even 20 billion

20 billion actually make sense if there was expected growth. At 20 billion the company is earning 5% of its value each year (1 billion net earnings). That's pretty decent return if you expect that earnings will grow on top of that.

 

[nboy22]

20 billion actually make sense if there was expected growth. At 20 billion the company is earning 5% of its value each year (1 billion net earnings). That's pretty decent return if you expect that earnings will grow on top of that.

Ok so based on this post and the one above that you have made, it's going to be a fat chance that anyone is actually going to make a profit. And if people do, it will probably be slim.

I guess $20 billion is not too bad a figure, that's why I threw it out there. It was a figure I could see as being realistic. I don't see $100 billion being anywhere near realistic.

 

[Rudee]

Ok, we're getting somewhere. So even though it didn't get there, there is obviously a lot of money invested. I still don't see how it can be worth so much if they only make $1 billion a year. I, along with many, believe that facebook is pretty much at its pinnacle. If it were at its pinnacle and facebook stock was say $90 billion, doesn't that mean it would take nearly 80-90 years for it to make it truly worth its stock?

Something just doesn't add up here... I suppose we just make up fake values for companies in the stock market? Again, I am a stock noob, but i just don't even see how facebook is worth anywhere near even 20 billion

Stocks sell at a premium of their forward earnings. The higher the premium the higher the stock price to earnings (P/E) ratio. Facebook is trading at a P/E ratio of around 70 if I recall correctly. That's mighty high, especially when you compare it to an Apple P/E ratio of 13 or even Google's P/E ratio of 18. When you buy a stock you are paying the current price for future earnings.

 

[Epic Fail]

Sadly, $8 a share is about the right price for the stock right now, given it's earnings and slowing growth rate. That puts it at a more reasonable P/E ratio of around 26.

I'm still stunned that it didn't spike higher before dropping in value, though. Tech investors in 2012 seem smarter than they were in 1999.

It won't drop that low, $8 will make the market cap smaller than the book value. The 16B raised in the IPO didn't go into thin air and FB had more than 5B in equity pre-IPO.

 

[conehead433]

You are right, I do need to leave it to the pro's. I was trying to dabble in this but it is well beyond my understanding. I bought in thinking it was going to jump up 10-15% and then I'd be able to make a quick buck and drop out. Obviously that is not what happened. I'm going to get some advisers and start parking my money in long term stuff. I am not market savvy by any means and I don't think I have the capacity to become good at it at this stage in my life.

I was a market newbie in 2000 when the market tanked and lost a good bit. That was when the Internet bubble hit. You could buy anything and all it did was go up, albeit what turned out to be briefly. Some of the stocks that got slammed then have never recovered. The main problem with Facebook is it's valuation in regard to earnings. Do yourself a favor and study up on P/E ratios and what they mean. Investing can be fun and rewarding, but due diligence is required. Other factors such as how many shares outstanding, insiders selling or buying, volume of shares traded daily, etc. all come into play. It gets complicated, but as a general rule it's best to buy companies that make a lot of money, and don't spend that much doing it.

 

[OCGuy]

Yea this garbage is legal but online poker is the devil.

This country is as ass-backwards as the rest of them sometimes...

 

[dagamer34]

You are right, I do need to leave it to the pro's. I was trying to dabble in this but it is well beyond my understanding. I bought in thinking it was going to jump up 10-15% and then I'd be able to make a quick buck and drop out. Obviously that is not what happened. I'm going to get some advisers and start parking my money in long term stuff. I am not market savvy by any means and I don't think I have the capacity to become good at it at this stage in my life.

Yep, I suggest you search the web for the term "retail investor" because that's what the financial world would call you.

The true value of a company like this isn't realized for a couple of years anyway, assuming they do have a solid business plan and execute well. Take a look at Google which was the previous darling of tech stocks, it took 3 years to hit a peak value of ~711 when it IPO'ed at $85 and there was plenty of time to "get in".

Unless you are a day trader, there's no point in rushing.

 

[Rudee]

Given how LIKD's and GRPN's IPO went, I'm pretty sure you won't see FB under $35 for many years to come.

Oh reeeealllly??

 

[13Gigatons]

Zuckerberg sold 30.2 million shares at a price of $37.58 for gross proceeds of $1.13 billion; Thiel sold 16.8 million shares for gross proceeds of $633 million.

What a scam...

 

[Printer Bandit]

zuckerberg made out like a bandit.

 

[Hugo Drax]

I'm still waiting on mine at $42 to be cancelled. What broker?

The longer you wait to unload the larger the losses you will incur. It looks like fb will trade sharply lower again today.

 

[Doppel]

I'm very much enjoying watching it already having shed almost 20% of its value. This company is still valued at almost twice Ford? So absurd. FB is a large company that does make money but its valuation was totally asinine. When its stock price peaked its valuation was something like 2/3rd of Coca Cola for F's sake, that is just retarded.

It may go up shortly but I'd like to see it crash down a little further so that people would get up off their knees as if Facebook is the greatest gift to mankind. It was never a particularly novel idea, is not an idea not easily copyable, and the company has few patents. The only thing FB has is its brand name and many users, who would readily jump ship if they saw the tides were changing and found a better product.

 

[rcpratt]

The longer you wait to unload the larger the losses you will incur. It looks like fb will trade sharply lower again today.

It's long been unloaded.

 

[Doppel]

You are right, I do need to leave it to the pro's. I was trying to dabble in this but it is well beyond my understanding. I bought in thinking it was going to jump up 10-15% and then I'd be able to make a quick buck and drop out. Obviously that is not what happened. I'm going to get some advisers and start parking my money in long term stuff. I am not market savvy by any means and I don't think I have the capacity to become good at it at this stage in my life.

If it makes you feel any better it is beyond most pro's understanding as well. Professionals also have lost their shirts so far buying in when it was at or above $38. This is why very few people, pros or not, can even match the stock market long term. Stocks are gambling; long term purchases are investing. I watch stocks go up and down for fun but learned my lesson a little while back not to bother with them. You'll find no shortage of guys online bragging about how much money they've made on a stock but rarely admit how much they've lost on another.

 

[kranky]

You'll find no shortage of guys online bragging about how much money they've made on a stock but rarely admit how much they've lost on another.

They are just like gamblers in that regard.

 

[SP33Demon]

I'm very much enjoying watching it already having shed almost 20% of its value. This company is still valued at almost twice Ford? So absurd. FB is a large company that does make money but its valuation was totally asinine. When its stock price peaked its valuation was something like 2/3rd of Coca Cola for F's sake, that is just retarded.

It may go up shortly but I'd like to see it crash down a little further so that people would get up off their knees as if Facebook is the greatest gift to mankind. It was never a particularly novel idea, is not an idea not easily copyable, and the company has few patents. The only thing FB has is its brand name and many users, who would readily jump ship if they saw the tides were changing and found a better product.

I'm pretty sure FB will be worth high 50's - 60 (i.e. double) in 1-2 years. People who bought in at 38 have nothing to worry about once the pump and dumpers are done, as long as FB keeps its revenue up.

 

[The-Noid]

The longer you wait to unload the larger the losses you will incur. It looks like fb will trade sharply lower again today.

FB indicated 31.88/9 @ 9:11. +.75

 

[The-Noid]

FYI: Borrow is a lot easier today as the shares have settled. Just in case anyone wants to try it.

 

[OlafSicky]

All you guys that didn't invest will be sorry when FB announces it's creating it’s own internet. They are already there just give them 2 or 3 years. Social networking is huge and it's only going to get bigger. I wouldn't be surprised if they bring out their own phone or pad a “networking” appliance in the next few years. 10 years from now FB will own the internet. I 'm waiting for it to go to $15 next week than I'm buying a shitload of stock. In the next 3 years my investment will go up 600% + in value.

 

[abaez]

lol $60 in two years? Really? What do you think Facebook will be doing in two years that will make it worth that much? Social networking is big, but facebook is NOT the end point of it at all.

Do you honestly think a Facebook phone, from a company who has no OS, no hardware, and no telecom experience would compete with an iPhone or the Galaxy S II or III? Networking appliance? Seriously?