Will Facebook flop?

[ack]

I think so... It's been on the news lately a lot for obvious reasons, and here's some interesting data...

1. Anticipated P/E ratio of 100! It will take Facebook 100 years to be able to buy its stock, not that it would ever care to
2. Yahoo was valued at $100 billion too
3. GM says Facebook ads don't pay off (today's WSJ) and plans to pull them off
4. Start-ups are selling Likes (today's NPR news), aka Fake Likes from Fake People so that companies can garner some interest in their products; how many of the 900 millions users are really real? How many people are really swayed by Likes?

Personal sentiments:

1. Facebook is a waste of time for adults, spend very little time looking at family stuff, mostly; no time or interest for ads
2. Facebook appeals to the young population, ads should sell well there, but does the young population care that much?
3. Still just ad-revenue driven. Where's the growth? Games and other revenue sources discussed here in the past are just a drop in the bucket

I am obviously not investing... You?

 

[Steve williams]

Peter, you would be lucky to find a single share and I mean that in all candor

 

[amirm]

I think anyone who can spell "stock" will buy its shares once the IPO happens and the price will soar even more. The mass market mentality on this has no rhyme or reason.

The ad thing is pretty interesting. They have so much more personal data on users so ads are customized to death, way, way better than Google/Bing. Problem is I think that when people go to facebook, they are not searching for anything. So they tend to not click on ads as opposed to when googling for a product and the ad being right there. This is my theory anyway .

 

[Phelonious Ponk]

Through a combination of Facebook, Soundcloud and Spotify, the band I'm in keeps up with schedules, shares songs we're recommending/learning/working on and books rehearsal time. The band's Facebook site is, at this point, our only site, and I'm not sure we'll ever need any more than that. I also keep up with my daughter in Texas via FB (and email, phone, ichat). I find Facebook very useful. With that said, I don't play games, I don't click ads, I don't think I've logged a moment's activity on the thing that generated a dime for anyone. And I'm a daily user.

That, in and of itself, is not a very good sign.

Tim

 

[ack]

Steve, I guess I was asking... are we investing, ever... not me, not with this data

 

[Mosin]

I think it will be a longtime winner. Look at it this way; Facebook is like a forum, except it is all things to all people in some respects. People go there for the same psychological reasons that they come here, or go to any social communication site. The difference is that it is more diverse.

As far as GM goes, what were they trying to sell? It sounds to me like they are trying to find someone to blame for their own lack of performance. Facebook can't fix Chevy sales problems. No one can. GM is a loser for the simple reason that they basically have no original ideas, and because they resist change. Combine that with a failure to manage labor reasonably and other fiscal issues, and you have a no-win situation.

...All in my honest opinion (Someone who went the three step route without satisfaction on a dud GM car.)

 

[FrantzM]

I am not sure either and since we are all speculating ... I don't see the revenue stream. That they have data on people is one thing, that they can use it is another.. it may look simple but it is not and on that point Google seems to have a leg up.. There is also the psychology of going to Facebook simply to be there in a neighborhood .. Do the users tend to buy ? Which is what an advertiser would want to see.. Will the users continue to come to the forum if there is a lot of advertisement that distract them from their addiction? Color me skeptical.. I see 2000 all over again with lot of money not finding worthwhile investment .. There will be some more bubbles some smaller than others ..bubbles nonetheless ...

 

[mep]

There is a huge revenue stream from their games like Farmville. My wife spends big money and I know she is not alone. Farmville alone has to be worth a billion or so.

 

[JackD201]

There is a huge revenue stream from their games like Farmville. My wife spends big money and I know she is not alone. Farmville alone has to be worth a billion or so.

Welcome to the brave new world of In App Purchases.

 

[audioguy]

I also keep up with my daughter in Texas via FB (and email, phone, ichat). I find Facebook very useful. With that said, I don't play games, I don't click ads, I don't think I've logged a moment's activity on the thing that generated a dime for anyone. And I'm a daily user.

That, in and of itself, is not a very good sign.

Tim

Facebook (and text) is the ONLY way I can find what one of my daughters (also lives in Texas) is doing. So I check every once in a while !!

 

[RBFC]

Peter, you would be lucky to find a single share and I mean that in all candor

It's rumored that only those with inside connections, those with associations to the main banking giants, and certain large-scale investors will be able to purchase stock in this initial offering. Prices went up about 25% before the stock even came up for sale.

Lee

 

[Steve williams]

No individual unless you're in the Forbes 500 will be able to buy stock

It's just as Lee says

 

[amirm]

It's rumored that only those with inside connections, those with associations to the main banking giants, and certain large-scale investors will be able to purchase stock in this initial offering. Prices went up about 25% before the stock even came up for sale.

Lee

They and "friends of the family" get to that. I was invited as such prior to a company IPO because I was one of their best customers and good friends with the principals. You buy at the offered price with the hopes that it would shoot up above that post event. I bought at I think $9 and sold at $11. It was not that many shares but it was fast and free money. Good thing I did because six months later the stock was half the price!

BTW, that is what the investment bankers do for the company. They almost guarantee that they can pre-sell all the shares so the company has little to no risk.

 

[ack]

The stock is priced to pop, but let's watch it when it opens some time later today... Meantime, see http://whoownsfacebook.com/

 

[ack]

Yeap, that's the link I sent

 

[Steve williams]

totally missed your post Peter

 

[Bruce B]

I think it's going to end up like MySpace. People have already moved on to Twitter and g+

 

[Steve williams]

Facebook fizzles in debut, shares skirt IPO price


By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Facebook Inc shares fizzled on their first day of trade on the Nasdaq, erasing early gains of as much as 18 percent to trade close to their initial public offering price.
The stock opened 11 percent higher and rose to $45 before rapidly heading south in frenzied trade, touching its initial public offering price of $38. The No. 1 online social network raised as much as $18.4 billion in one of the biggest initial public offerings in U.S. history.
After a delay in the opening print that drove up anxiety levels among traders and onlookers outside the Nasdaq, the company's closely watched stock began trading at $42.05, compared with an IPO price of $38.
To rapturous applause from employees, Facebook Chief Executive Mark Zuckerberg -- flanked by Chief Operating Officer Sheryl Sandberg and Nasdaq Chief Executive Robert Greifeld -- rang the bell to kick off trading at the company's Silicon Valley headquarters at 6:30 a.m. Pacific time.
The 28-year-old billionaire founder hugged and high-fived Sandberg and other employees in celebration after he pressed the remote button.
The area outside Facebook's offices at 1 Hacker Way was packed with throngs of photographers, more than 12 television trucks, and a TV news helicopter hovering overhead as the excitement reached fever pitch.
"A 15 to 20 percent pop is in the realm of possibility," said Tim Loughran, a finance professor at the University of Notre Dame, before the start of trade.
"Given they already moved their IPO range up and increased the size, that's bullish to begin with."
Some expect shares could rise 30 percent or more on Friday, despite ongoing concerns about Facebook's long-term money-making potential. An average of Morningstar analyst estimates put the closing price for Facebook shares on Friday at $50.

 

[Phelonious Ponk]

Not that I wish I could buy any FB stock, but this commong IPO situation, where investment bankers manipulate the initial share price, then the company and brokers offer it at that price to a select group of customer who are almost guaranteed to turn a profit as soon as the stock is available to the general public, who, more often than not, buys it high from these "selected" cusotmer, only to watch it lose value in the coming weeks....how is that not insider trading?

Tim

 

[amirm]

The stock is priced to pop, but let's watch it when it opens some time later today... Meantime, see http://whoownsfacebook.com/

I hope some of those people donate money to charity ad otherwise, the thought of some of those unlikely characters to walk away with so much money to spend in drugs and such, makes me feel really bad for the world we live in.