Facebook IPO

[her209]

http://abcnews.go.com/Business/face...chance-company/story?id=16372015#.T7ZR_1LSdvI

While Facebook announced on Thursday that its initial public offering of common stock would be priced at $38 a share, raising $16 billion and valuing the company at $104 billion, the shares available for purchase by the public will likely be priced higher. That's causing many analysts to caution individual investors not to rush into making any risky investments.

Facebook's lead underwriter, the investment bank Morgan Stanley, determined who got shares of the company before shares are sold to the larger public on Friday, said Jim Krapfel, IPO analyst with the Morningstar investment firm.

This doesn't seem very "free market" to me. I'm not alone in sharing that viewpoint.

Mellody Hobson, president of Ariel Investments, an investment firm in Chicago, said there was "no way" she was going to purchase Facebook shares as an individual investor on IPO day.

"First of all, the institutions have gotten there first. And we're getting their sloppy seconds," she told ABC News' Sharyn Alfonsi.

 

[Pr0d1gy]

Morgan Stanley is the underwriter, shocking business practices given their track record I know. pfft

When are we going to prosecute all of these thieves?

 

[WackyDan]

A large number of shares are assigned ownership in advance of open trading of shares to the people who fronted the initial and ongoing investment capital which started the company and maintained it to this point. Which is why in part Morgan Stanley and the others are involved to make sure that anyone who had an equitable stake in the company, including the average employee properly and legally has their shares dispersed to them.

Anyone who thinks these are great opportunities for retail investors is dreaming anyway.

 

[Ausm]

Morgan Stanley is the underwriter, shocking business practices given their track record I know. pfft

When are we going to prosecute all of these thieves?

Not in our lifetime that's for sure since Wall Street owns Congress.

 

[alent1234]

When are we going to prosecute all of these thieves?

since i live in NYC, hopefully never

 

[yllus]

What are first days of trading usually like? FB seems pretty stable at $40 already. Did they simply price it right to begin with?

 

[Capt Caveman]

Been up to $45, now at $38.

I was able to participate in the IPO thru eTrade.

 

[dank69]

i thought it opened at 45

 

[Capt Caveman]

i thought it opened at 45

Opened at $42.05

 

[mshan]

Someone on tv yesterday said average cost basis for insiders was something like $1.10 / $1.11.

 

[gevorg]

hahaha!

 

[Ausm]

Been up to $45, now at $38.

I was able to participate in the IPO thru eTrade.

Same here..I bought at 42 and dumped at 45 for a tidy profit.

 

[Ausm]

hahaha!

I don't find this surprising in the least.

 

[CycloWizard]

It is farce. Some animals are more equal than others.

 

[Pr0d1gy]

Not in our lifetime that's for sure since Wall Street owns Congress.

Then war is the only answer.

 

[Craig234]

Is it just me or does it seem vastly overvalued that it's worth more than McDonalds or Citigroup?

That just seems nuts for a site like this with all the potential competition and changes in the internet marketplace, reminding me a bit of AOL buying Time-Warner.

So, I could short this stock and make out like a bandit when the bubble bursts... except I'm not sure enough to put money on that and bubbles last as long as suckers buy.

In fact, the word 'suckers' is questionable given that a lot of money is made in bubbles. When Tulips were a bubble centuries ago, many 'suckers' made a fortune.

 

[Blackjack200]

http://www.latimes.com/business/technology/la-fi-tn-facebook-trading-20120518,0,6622700.story

Morgan had snap up a lot of FB shares to prevent the price from slipping below $38.

 

[Pr0d1gy]

The problem with Facebook is it really cannot effectively become the cash cow these people all want it to be. So the crooks will get it rated AAA like they did with all the subprime derivatives before 2008 and then start dumping it when people realize it could never stand up with a real business because in order to do so would require a much more invasive format that people will not accept. They all know it but they will once again make a bubble, get rich, and fuck over everyone else just like they have time and time again.

 

[Blackjack200]

Is it just me or does it seem vastly overvalued that it's worth more than McDonalds or Citigroup?

That just seems nuts for a site like this with all the potential competition and changes in the internet marketplace, reminding me a bit of AOL buying Time-Warner.

So, I could short this stock and make out like a bandit when the bubble bursts... except I'm not sure enough to put money on that and bubbles last as long as suckers buy.

In fact, the word 'suckers' is questionable given that a lot of money is made in bubbles. When Tulips were a bubble centuries ago, many 'suckers' made a fortune.

Why would you compare FB to a restaurant franchise and a bank? FB is similar to Google in that they use a free service to build a user base that they can sell to advertisers, and Google makes tons of money.

McDonalds and Citibank might be more visible, but FB could have a very lucrative business.

 

[Blackjack200]

The problem with Facebook is it really cannot effectively become the cash cow these people all want it to be. So the crooks will get it rated AAA like they did with all the subprime derivatives before 2008 and then start dumping it when people realize it could never stand up with a real business because in order to do so would require a much more invasive format that people will not accept. They all know it but they will once again make a bubble, get rich, and fuck over everyone else just like they have time and time again.

Ok.

I don't know if FB is worth $100 billion, but some of you guys are being a bit silly.

 

[Pr0d1gy]

Ok.

I don't know if FB is worth $100 billion, but some of you guys are being a bit silly.

That's it? I'm silly? Coming from a guy with a Snoopy avatar, really?

I'm not silly at all, I just don't buy the bullshit the people are selling. Just like AIG should not have bought the subprime AAA shit that was sold to them.

 

[Blackjack200]

That's it? I'm silly? Coming from a guy with a Snoopy avatar, really?

I'm not silly at all, I just don't buy the bullshit the people are selling. Just like AIG should not have bought the subprime AAA shit that was sold to them.

It is good to know that there are people out there like you that don't buy the bullshit. It helps me sleep at night.

 

[conehead433]

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."

 

[Pr0d1gy]

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."

I'm sure this guy has something to say about your obvious opinion, which is one I wholeheartedly share:

It is good to know that there are people out there like you that don't buy the bullshit. It helps me sleep at night.

 

[Craig234]

Why would you compare FB to a restaurant franchise and a bank? FB is similar to Google in that they use a free service to build a user base that they can sell to advertisers, and Google makes tons of money.

McDonalds and Citibank might be more visible, but FB could have a very lucrative business.

I didn't compare them. I compared their value. Because it illustrates a point.

It's not to say the businesses are comparable. It's merely to show things where people are likely to appreciate the value.

It's not simply that they're visible. People have some sense of McDonalds' brand, real esate, revenue and other things that are impressive in their overall value.

Facebook's value is much less clear in the longer term, including the risk.

I appreciate the value of Google more, and it's a good example to discuss. Internet searching isn't going anywhere soon, nor is advertising, and while I would have made similar comments early on about Google because of the threat of competition, it's proven it has the ability to continue to dominate the market for many years, so that risk is lessened, and they've been pretty adept at entering some new markets as well, unlike Facebook.

So I'd bring up the oft-used example of 'pets.com' for an internet company that can be 'overhyped' - while Facebook is much better than that, it shares some issues.

I recall when 'myspace' and many others seemed pretty hyped as well.