Facebook IPO

[BoberFett]

A free market means I come and shoot you and take your stuff. Got a problem with it?

What a completely ignorant statement.

Why do "liberals" seem to to believe a free market includes coercion or violent crime?

A free market does not mean anarchy. You can still have criminal laws in a free market.

 

[ShawnD1]

What a completely ignorant statement.

Why do "liberals" seem to to believe a free market includes coercion or violent crime?

Are you disagreeing wit da union? It's my right as a worker at this company to park a truck that blocks the entrance to your factory. I paid my taxes and that gives me the right to block the road so nobody else can use it. It's also my right to drive my Prius in the left lane going 30mph below the speed limit. I also have the right to organize with several other friends so all of us drive 30mph below the speed limit, each taking 1 lane and staying next to each other so nobody can pass. This should be protected by the constitution because
1 - it's freedom of expression
2 - it's freedom of assembly
3 - fuck you

 

[blankslate]

http://www.marketwatch.com/story/facebooks-stock-should-trade-for-1380-2012-05-25?link=MW_popular

According to this link Facebook should be in the $13 dollar range....


oh man, some people have gotten taken for fools.


Better stick with index funds if you aren't connected or a gifted stock analyst in your own right.

 

[ShawnD1]

Better stick with index funds if you are retarded

Fixed. People knew it was worthless and they bought it anyway. Stupid people are stupid.

Right now Google says their PE ratio is 102. link
We can do some grade 7 math to figure out what Facebook should be priced at. We'll try to normalize the stock price according to PE ratio. Intel's PE ratio is 10.9 so we'll use that as the standard for what a stock should be.
31.91 facebook price * (10.9/102) = $3.41 is what Facebook should be priced at

Some other company PE ratios:
IBM - 15
Microsoft 10.6
General Electric - 15.8
TD Bank - 12.40
Google - 17.9
notice how none of them are above 20. A PE ratio of 20 means a company operates at 5% profit. That's respectable and it's close to the index average.

http://en.wikipedia.org/wiki/Greater_fool_theory

The greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a greater fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else at an even higher price[1].

It's worth mentioning that gold falls under the category of greater fool theory as well. Gold is mostly useless. It doesn't generate wealth in any way, so the only reason to buy it is if you think somebody else will buy it for a higher price because they are even more retarded. Something that generates wealth would be a bond (the interest) or a stock (company profits).

 

[Doppel]

Fixed. People knew it was worthless and they bought it anyway. Stupid people are stupid.

Right now Google says their PE ratio is 102. link
We can do some grade 7 math to figure out what Facebook should be priced at. We'll try to normalize the stock price according to PE ratio. Intel's PE ratio is 10.9 so we'll use that as the standard for what a stock should be.
31.91 facebook price * (10.9/102) = $3.41 is what Facebook should be priced at

Some other company PE ratios:
IBM - 15
Microsoft 10.6
General Electric - 15.8
TD Bank - 12.40
Google - 17.9
notice how none of them are above 20. A PE ratio of 20 means a company operates at 5% profit. That's respectable and it's close to the index average.

http://en.wikipedia.org/wiki/Greater_fool_theory

It's worth mentioning that gold falls under the category of greater fool theory as well. Gold is mostly useless. It doesn't generate wealth in any way, so the only reason to buy it is if you think somebody else will buy it for a higher price because they are even more retarded. Something that generates wealth would be a bond (the interest) or a stock (company profits).

Surely you realize some investors--for good reason--tolerate a very high pe because the company is growing fast; fb is growing much quicker than intel so pricing it at the same pe does not make sense. And there are oth profitable companies like rim with a low pe ratio because the anticipation is that they are soon to go through more problems. An average pe is good for an average company.

All this aside I agree that trading stocks is a fool's game and we all have seen the endless proof of it. I am index or mutual funds as well.

This doesn't stop me prognosticating of course. I think that fb is a much better stock than groupon, which is toilet paper and almost worthless but still of course the 100 pe ratio of Facebook, valuing it at twice or more than ford motor company is shall we see very optimistic.

 

[ShawnD1]

Surely you realize some investors--for good reason--tolerate a very high pe because the company is growing fast

There seems to be a misunderstanding of what certain financial terms mean. Gross and net for companies is different than gross and net for personal income.

Personal:
-Gross Income is how much you were paid before deductions
-Net Income is how much you took home

Business:
-Revenue is the total amount of money collected
-Gross Profit is how much is left over after including the operating costs of the business
-Net Profit is how much money is left after subtracting things like growth and research


If you're looking at growth, you look at assets and gross profits. Example: say I run a restaurant. I decide to expand my business by opening a second restaurant. That year might be considered a net loss because it takes a lot of money to build another restaurant, but you can see on the balance sheet that my company's overall value went up and the gross profit was positive.


With that in mind, how is facebook doing? The company's profit margins are actually very good; they make several dollars profit for every dollar it costs to run the company. So that means I should buy, right? Not quite. You need to factor in share price. Google Finance says their gross profit for the first quarter was 0.78 billion, so that's about 3.12 billion gross profit per year. Now how does that compare to the company's market value of 68 billion? 68/3.12 = 21.8 PE ratio, still terrible. Do not buy this company.

Now compare that to another information company like Google.
Their quartly gross profit is 6.86 billion, so that's about 27.44 billion per year. The company's current value is 198 billion. That puts Google's gross PE ratio at 7.2 so it's roughly 3x better than Facebook.

I used Intel as the comparison in my other post. Intel's gross profit 51.6 billion earned/yr and the company is worth 129 billion. That puts their gross PE at 2.5. That's exceptionally good and it's still 10x better than Facebook.

 

[loveit]

You guys shouldn't look at this as a long term investment right now. Shorting this stock is the way to go it's like shooting ducks in a bucket! I am making a killing with shorts and do plan a 1-3 year hold once it' bottoms out.

Came across this online...


When someone comes across something online and feels compelled to make an account to let us know what they found - and what they found is a link to a commercial site, then 99.9 times out of 100, it's spam.
99.9% probable spam removed. -Admin DrPizza
edit: oh wait, and you bumped thread that hadn't been touched in over a week. That takes care of the other 0.1%

 

[piasabird]

Well if facebook was growing, lets just say I want to see a stock split to prove it.

 

[AnonymouseUser]

Well if facebook was growing, lets just say I want to see a stock split to prove it.

If anything, FB needs a reverse split.