Facebook IPO watch.

[Crono]

That would be a mighty task to accomplish.

Indeed.

The reason why Facebook can get away with most of the data mining done on Facebook is the fact that they aren't really doing any of it themselves, nor are they profiting from it. If they could sell the data, they would get a ton of money... but of course they would alienate their userbase, anger privacy groups even more, and land themselves in legal trouble.

What alent1234 pointed out makes the most sense. Facebook can't be very profitable in the future (not enough to justify the $100 billion in shares, anyway) unless they branch out and buy many smaller businesses. And not just social networking related ones or tools to bolster Facebook itself. It's possible they'll go after the gaming market more heavily, acquire several publishers especially in the mobile app market, and possibly look at profitable companies in other industries.

They aren't creating enough content themselves to sell, and advertising alone isn't enough.

 

[conehead433]

I had posted this in P&N -

Now that it is traded publicly, and the institutional investors over the years see that the stock is going to appreciate very little, they will be dumping their shares ASAP in an effort to maximize their profits. Bono, the lead singer of U2 had invested 90 million a few years back, so now he's worth roughly 1.5 billion. Nothing in FB's business model can justify the lofty price. Ten percent of their income is from people playing games (Zynga) and the rest is advertising. And companies like GM have figured out that the advertising hasn't paid off and have cancelled their ads on FB. FB has evolved into a social networking site that is now little more than corporate spam. And investors who remember the Internet bubble of 2000 don't want anything to do with a company whose stock price is over 100 times earnings going forward. There is also little upside to FB's profit margins in the near future. When they start charging people to use it that will mark the end of FB. All that said I don't know why anyone would want to buy this POS. Let's put some lipstick on this pig and throw it on the BBQ. If I was Cramer I would be screaming 'Sell, sell, sell, sell... "It's dead Jim."

 

[Imp]

To be fair, Bono was worth way more than the $90 million he put into Facebook before the value went up.

My money's on FB following the Linked-In model of "premium" and basic accounts to avoid pissing too many people off. No idea how they'd separate the services.

 

[RichieZ]

U no have FB shares? U no buy house!

 

[Wreckem]

It was disappointment for new investors yes.

It was great for Facebook. They maximized the maximum amount of money they could get out of the IPO. Investors didn't make out like bandits, but Facebook and Facebook insiders did.

I never really understood the concept of IPO's selling for below what the market would pay. The company doing the IPO and their insiders(original investors) lose out on a lot of money. Facebook could have stuck to their original targets, but they would have left alot of money on the table for others to profit off of.

 

[Noirish]

i bet the bankers had many orders out there to buy up shares at $38. they don't want to anger any big institution buyers.

 

[Skel]

Today reminds me of when ATT wireless IPOed back in 2000. I knew people that borrowed money to jump on it thinking they could flip it a profit after a few days. The stock, if I recall correctly, did nothing but sit there until Cingular bought them out. The people I knew ended up dumping the stock at a loss and to this day will tell you the stock market is nothing but legalized gambling.

 

[Arachnotronic]

i bet the bankers had many orders out there to buy up shares at $38. they don't want to anger any big institution buyers.

They did.

 

[LegendKiller]

i bet the bankers had many orders out there to buy up shares at $38. they don't want to anger any big institution buyers.

They don't want to anger them or the company. Imagine that they allow the biggest IPO and the biggest social networking site to flop? That'd ruin a lot of relationships.

What an overall screwup though.

 

[kranky]

Down around 8% at today's market opening at just over $35.

 

[Golgatha]

Down around 8% at today's market opening at just over $35.

Make that $34.

 

[actuarial]

I really want to but some puts with a strike price of sub $30. I wonder what the put prices are going to look like.

 

[The-Noid]

I really want to but some puts with a strike price of sub $30. I wonder what the put prices are going to look like.

Puts will be CRAZY expensive.

Putting aside the fact that vol is huge on FB, there is also going to be huge negative skew based on how it has traded.

 

[SP33Demon]

Puts will be CRAZY expensive.

Putting aside the fact that vol is huge on FB, there is also going to be huge negative skew based on how it has traded.

Can someone explain why puts aren't offered yet?

 

[lothar]

Make that $34.

Make that $33.
http://finance.yahoo.com/q?s=FB&ql=1

Follow the stock there real time.

 

[The-Noid]

Can someone explain why puts aren't offered yet?

If you can't short the stock, there is no way to be a market maker in the puts.

 

[SunnyD]

I'm going to be surprised if they don't start an investigation on the IPO underwriting. That was blatant pump and dump.

 

[GTaudiophile]

Haha. Always knew FB was a bubble...

Go back and watch "the movie." MZ never knew how to monetize what he had. Quite obvious. And Eduardo Saverin? Couldn't sell it then either. About the only thing FB can do is to even more blatantly sell "our" information and content to telemarketers and such. Nothing new.

 

[Sheep]

$105b valuation for a company that has no way of consistently monetizing its 900 million users. You'd have to be truly thick to fall for that.

 

[Nintendesert]

Well FB is inching it's way back up now that lunch has passed. I think everyone went and drank a few shots and are getting their stupid back on.

 

[Imp]

$34.80-ish at 2pm...

Don't you guys have a holiday? Memorial day weekend or something, no?

 

[kranky]

$34.80-ish at 2pm...

Don't you guys have a holiday? Memorial day weekend or something, no?

That's next week. The US holiday is May 28.

 

[gevorg]

Morgan Stanley may have spent billions of dollars to support the stock price by buying shares in the market. Some market participants said that the underwriters had to absorb mountains of stock to defend the $38 level and keep the market from dipping below it.

The firm did this by tapping into a 63 million share over-allotment option, or greenshoe, according to sources familiar with the deal.

As an indication of the cost, had Morgan Stanley bought all of the shares traded around $38 in the final 20 minutes of the day, it would have spent nearly $2 billion. Underwriters are not obligated to prop up a stock on debut, but typically do. Morgan Stanley declined to comment.

It gets better! hahahaha!

 

[The-Noid]

It gets better! hahahaha!

The greenshoes are usually shares held short by the underwriters. Defending at 38 was via covering, not real money.

MS may have lost money but the amount was going to be small.

 

[alent1234]

It gets better! hahahaha!

go read the news on the google IPO back in the day

first they dropped the price, reduced the shares and then it was flat for months until it started going up