Facebook IPO Disaster

[-EnVus-]

Am i the only one who hopes and wish that the shit Fails and all the dumb ass investments crumble ?



As the stock's value continues to drop -- it closed Tuesday at $31, down 8.9% on the day, and down 19% from the IPO price of $38 -- lead underwriter Morgan Stanley (MS (http://www.dailyfinance.com/quote/nyse/morgan-stanley/ms)) is being attacked for its 11th-hour cut (http://www.reuters.com/article/2012/05/22/us-facebook-forecasts-idUSBRE84L06920120522) in estimates of Facebook's revenue forecasts. SEC Chairman Mary Schapiro (http://www.reuters.com/article/2012/05/22/us-facebook-sec-idUSBRE84L0XZ20120522), has claimed that "we need to look at" issues related to the IPO, and analysts are criticizing everyone from Nasdaq (http://www.wcti12.com/news/31093221/detail.html) to Facebook itself, desperate to find someone to blame.

[bu villain]

Personally, I don't care what happens to facebook stock. I do however have an interest in the market behaving as rationally as possible so I guess I'm glad that the price isn't skyrocketing based on hype alone. Since I never invest in something with so much hype (not a fan of the greater fool theory), I haven't really looked at facebook's fundamentals but I'm pretty sure they don't justify a $40 price.

[Browning151]

Personally, I don't care what happens to facebook stock. I do however have an interest in the market behaving as rationally as possible so I guess I'm glad that the price isn't skyrocketing based on hype alone. Since I never invest in something with so much hype (not a fan of the greater fool theory), I haven't really looked at facebook's fundamentals but I'm pretty sure they don't justify a $40 price.

It put their valuation at more than 100 times 2011 profits, that's a LARGE gap and one that Facebook needs to come up with new revenue streams quickly to justify.

Overall I agree though, kind of sucks for Facebook but it's good to see the market not run through a quick boom/bust cycle with the stock.

[BanginJimmy]

It put their valuation at more than 100 times 2011 profits, that's a LARGE gap and one that Facebook needs to come up with new revenue streams quickly to justify.

Overall I agree though, kind of sucks for Facebook but it's good to see the market not run through a quick boom/bust cycle with the stock.

Listening to bloomberg on sirius on the way home from work today. Seems a lot of analysts think it is valued correctly at about $32 a share and that it will likely rise or fall from here on its performance, not hype. They did say to expect some drastic fluctuations in the next several months as info about the lawsuits is released.

[Browning151]

It will be interesting to see how the lawsuits etc. play out. $32 seems a bit more reasonable than than the IPO and what it actually opened at. I personally don't see FB as being a stable long term investment though. It's a fad, just as Myspace was and as soon as the next "big thing" comes along they will be struggling unless they get pretty creative expanding into other areas IMO.

[BanginJimmy]

There was talk of FB creating a mobile OS to help generate revenue from mobile users. To tell you the truth, I would love to see a third party compete with Android and Apple.

[Browning151]

I wouldn't mind seeing another OS, but I would never have a FB OS on any device. They are far too unpredictable with their security policy changes.

[Drummerboy]

t's a fad, just as Myspace was and as soon as the next "big thing" comes along they will be struggling unless they get pretty creative expanding into other areas IMO.

I tried to explain this to a friend the other day, but he just didn't get it. He said "Facebook is too widespread to go under." But I explained that Myspace was the same way, and to a lesser extent before that, Xanga. Facebook is just doing a good job of staying relevant for now. That won't last forever.

[BanginJimmy]

I tried to explain this to a friend the other day, but he just didn't get it. He said "Facebook is too widespread to go under." But I explained that Myspace was the same way, and to a lesser extent before that, Xanga. Facebook is just doing a good job of staying relevant for now. That won't last forever.

Nothing lasts without innovation. As long as FB keeps changing and improving they have the base to stay relevant for a very long time. The only place they are lacking right now is in their mobile device revenue streams. If they can correct that, they will be in position to stay around for a very long time.

[nelson9995]

Nothing lasts without innovation. As long as FB keeps changing and improving they have the base to stay relevant for a very long time. The only place they are lacking right now is in their mobile device revenue streams. If they can correct that, they will be in position to stay around for a very long time.

hmm. what do you mean by mobile device revenue streams?

[BanginJimmy]

hmm. what do you mean by mobile device revenue streams?

Ways of generating revenue from mobile devices. Right now FB has ads when you access it from your computer. No ads if accessed from a smart phone or tablet (word of mouth on the table). No ads means they are not gaining any revenue from people that only use mobile devices to access FB, like me. Listening to the coverage on this last week, I believe they said that nearly 70% of FB access is now done via smart phones and tablets, meaning that on average only 30% of the time a user spends on FB is spent on a medium that includes ads. Advertisers know this and will either pull their ads all together, or negotiate cheaper contracts.