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Please state your views & opinion over Facebook's USD 104 Billion IPO

Sperminator

Alfrescian
Loyal
http://www.economist.com/blogs/schumpeter/2012/05/facebooks-flotation-0
[SOURCE]

Facebook's flotation
The final countdown
May 16th 2012, 17:24 by M.G.| SAN FRANCISCO

20120519_fnp502.jpg

“ZUCKERBERG’S rocket, ready for lift-off” was the title of our article about Facebook’s upcoming initial public offering (IPO) that ran in last week's issue of The Economist. As the first day of trading in its shares, expected to be May 18th, approaches, the rocket’s payload is getting bigger. On May 16th the social network revealed it was boosting the number of shares available by 25%, to 421m, on the back of increased demand. Its bold move is a sign that investors’ hunger for Facebook’s equity could turn its IPO into one of the biggest in American corporate history.

The fact that Facebook’s offering is already said to be heavily oversubscribed is remarkable for a couple of reasons. One is that it is taking place against the backdrop of a turbulent global economy, with chaos in the euro-zone helping to depress stockmarkets almost everywhere. The other is that doubts continue to be raised about the company’s ability to generate huge growth in its core online advertising business, which accounts for more than four-fifths of its revenues. Yet this will be essential if the firm is to justify a valuation that could hit $104 billion if the company achieves a price for its shares at the top of the $34-38 range it has set. (This range could still be increased further before the IPO process is formally closed.)

The bullish case for Facebook, whose offering could raise almost $16 billion, rests on the belief that the company can hit a mother-lode of ad dollars by finding new advertising formats in the same way that, say, Google has minted money from text ads placed alongside search results. But some companies are clearly not convinced by the social network’s efforts so far. On May 15th a report in the Wall Street Journal revealed that General Motors (GM), one of the biggest advertisers in America, had decided to stop advertising with the service because the advertisements the car maker had run were having insufficient impact on consumers.

Interestingly, GM intends to keep promoting itself via its own pages on Facebook, which it does not pay for. Some advertising-industry insiders say this is a common trend. Firms buy some ads on the social network to promote their presence there, but once they have convinced enough people to become “fans” of their pages through such activity, they shut off the ad spigot and concentrate their efforts on creating content for their existing fan-base.

The GM news, which could not have come at a worse time for Facebook, follows on the heels of a study which shows that click-through rates on Facebook's display ads are still way below those run on Google. Worse, according to a new poll commissioned by AP and CNBC, more than half (57 percent) of Facebook users surveyed said they never click on ads or other sponsored content when they use the site.

If the social network wants to boost revenues it may be tempted to use more persuasive—and potentially more invasive—ad formats. But that could alienate its users. A think-piece just published by the World Economic Forum, in collaboration with the Boston Consulting Group, is a salutary reminder that concerns over privacy threaten to hold back the growth of an emerging online economy.

Such concerns do not seem to have deterred institutional investors, who will dominate the IPO. Many are no doubt planning to offload some of their shares to keen retail investors after trading begins, giving a boost to Facebook’s share price in early trading. A similar "pop" has occurred in a number of high-profile web IPOs over the past year.

Taking advantage of the hype around the IPO, many of Facebook’s backers are already planning to part with more shares than originally planned. For instance, Peter Thiel, a well-known Silicon Valley financier, is offering 16.8m shares, more than twice the amount of stock he had initially intended to sell. Some big investment companies, such as Russia’s DST Global and Accel Partners, an American venture-capital firm, have also boosted the number of shares they are willing to part with. Those who buy them will have to hope that once it has left its IPO launch-pad, Facebook can quickly come up with a business model that justifies a stratospheric share price.


SPERMINATOR:

From looking at the world's first largest IPO EVER in human history, do you think FACEBOOK, a 8 year old company is worth USD 104 Billion or about USD 38 for 421 Million Shares IPO listing?

Please state your views and opinions in all angles, from the financial point of view (facebook's financial statements), from the user point of view, from the potential growth point of view, from the customer base point of view, from the sales point of view.

As a Singaporean Investor, would YOU, invest in Facebook? If yes, why, and if no, why.

We are all witnessing one of the largest listing in Human History! Mark Zuckerberg really prove that it is POSSIBLE to be a instant Billionaire in 8 years time! I am personally awed and impressed by this feat...
 

DerMannschaft

Alfrescian (Inf)
Asset
You won't get anything positive from me about FB as they are for morons. Only this time and for your thread i will skip attaching a quote from Anonymous that i always like to use. :biggrin:
 

scroobal

Alfrescian
Loyal
Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

With a nick like "sperminator" you lose half the effectiveness of your effort. I raised this to illustrate why the IPO is so high. If the name of Facebook was not used but the name "Dickster" I am sure it would not have reached this level of people engagement. So in essence

1) Get the name right
2) The name should give hint of what it does
3) People come and realise that it has unique functionality and they can be part of it
4) This brings ready acceptance and the membership base grows
5) The large base is the value proposition for potential advertisers.
6) That advertising potential is now reflected in the IPO price expectation.

If you cannot get the name right, at least the name should not carry any intelligence.
 

Sperminator

Alfrescian
Loyal
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

Dear Scroobal,

Thanks for your wise inputs. Sperminator is a favored nick many years back, it's not supposed to be taken seriously, as we are in www.sammyboy.com and it's like Singapore coffee shop talk.

I acknowledge your views, the name Facebook does have a interesting appeal... the name Facebook does it's basic function well (Sharing photos resources, linking friends, and it's possibly the most used social network website on earth... with close to a Billion user worldwide, with over 70 languages)

Yes, on point 3, I truly agree about the interactivity of the user between different users, and when you are in Facebook, you can share your thoughts to your connected friends, one blast, all your friends receive your information... talk about leverage... SMS you have to pay, Facebook free! Best of all, it's REAL TIME.

From the membership point of view, I believe Facebook may have reach it's critical mass already, if you use the rule of exponential growth in Facebook Customer's base... it'll just be another few years when they have reached maximum capacity of the world INTERNET USERS... which I believe is at most half of the world's population, or about 3.5 Billion people. Growth rate will be stunted in a matter of years.

The value proposition for advertisers is a solid argument as the people who join Facebook, knowingly or unknowingly have already inputted their own bio-profile, name, race, age, occupation, company working in, position, experience, likes, dislikes etc... Facebook is any Advertiser's dream come true, as there is finally a way to find your focused market, and get some REAL data or even sample data for their marketing initiatives GLOBALLY. (Except for CHINA) - This point alone, I believe can support Facebook's value.

IPO price expectations... from my point of view, I think Facebook is truly over valued... and they need to think of a continuous growth strategy to support their Share price growth rate...

State your views and opinions... no right or wrong... just discuss.
 

eatshitndie

Alfrescian (Inf)
Asset
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

don't trust wall street anal-yeast infections and pundits. they're lying thru' their teeth. their intention pre-ipo is to scare away would-be private investors and leave the spoils for themselves and their associates and buddies in hedge funds and institutional investment firms. anyway, most of them have early buy-in opportunities ahead of the general public. a few seconds headway is all they need. and when the stock eventually were to slide slightly in the future, they'll talk it up and sell when fools who believe in them buy in. have seen the same modus operandi and shit happening with qcom and goog in early days.
 

Cestbon

Alfrescian (Inf)
Asset
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

FB Company does not make profit year after year survive by investor money. More like ponzi.
 

Sperminator

Alfrescian
Loyal
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

FB, in my opinion is a database goldmine. And photos goldmine.

If they sell advertising alone to Google, Yahoo, and all other major search engines, they should monetize pretty well, as the hit rates are more or less quite assured.

In my opinion, Social Networking Websites are here to stay, and FB have become a culture already... If you look at Americans, Europeans, Asians, Africans, Latin Americans (ALL EXCEPT CHINA), the first thing everyone does in the morning when they arrive office, is to CHECK FACEBOOK!!! (Many bosses will be angry with the loss of productivity, however, should be taken as an opportunity for marketing, as when each employee put their company name, isn't that free publicity for the company?)

However, In my opinion, I do not believe that FB justify such high prices... and I agree with Eatshitndie and Cestbon, the business model of FB seems strikingly similar to a PONZI SCHEME.

Remember, a bank like JP Morgan can lose USD 2 Billion in trading losses overnight... the financial institutions are evil... a lot of strange derivatives products that is served, nothing than to confuse and con common people, and steal their wealth...

Study FB's financial statements, and I think FB is over valued, as their total assets, and cash flow do not justify a value of USD 104 Billion... this company is a WEBSITE... It is a social networking website.
 

eatshitndie

Alfrescian (Inf)
Asset
fb is anticipated to hit 55 usd per share seconds after 11am est, although the planned ipo price is 38 usd. as predicted, institutional investors and hedge funds (high rollers) are already training buy buttons on it, seconds and perhaps minutes ahead of the general public. their behemoth positions will dominate, and all it takes are a few precious seconds.
 

bryanlim1972

Alfrescian
Loyal
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

their intention pre-ipo is to scare away would-be private investors and leave the spoils for themselves and their associates and buddies in hedge funds and institutional investment firms.

how is that possible? without these would-be suckers, there'll be no one to pick up the over valued crap at $38/share.

as u pointed out, the sharks already got in pre-ipo. so what u said isn't logical.
 

eatshitndie

Alfrescian (Inf)
Asset
Re: Re f: Please state your views & opinion over Facebook's USD 104 Billion IPO

how is that possible? without these would-be suckers, there'll be no one to pick up the over valued crap at $38/share.

as u pointed out, the sharks already got in pre-ipo. so what u said isn't logical.

institutional investors (hedge funds, mutual funds) will swoop in early at 38 when trading on fb begins at 11eastern. in a few seconds after that, it would be oversubscribed above the ipo price at about 55 and above. that's when huge individual buys come into play, followed by the general public. when you begin to buy online through your account, the stock may already hit over 50. for individuals, any buy is so insignificant it makes very little difference to the value of the stock. in wall street, it's institutional investment that truly moves values of stocks.
 
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QXD

Alfrescian (InfP)
Generous Asset
wtf, it started raising the cap orders from US$50 to US$56.80 in five minutes.

I cancelled my order. Does not make sense to buy an IPO 40% overpriced within a few seconds.
 

QXD

Alfrescian (InfP)
Generous Asset
facebook to start trading 11:05am EST.

Nabeh. delayed...
 
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eatshitndie

Alfrescian (Inf)
Asset
wtf, it started raising the cap orders from US$50 to US$56.80 in five minutes.

I cancelled my order. Does not make sense to buy an IPO 40% overpriced within a few seconds.

everything is in the works as i've predicted. the delay of over 5 minutes, now 15 minutes, is due to aggressive huge institutional trades and settlements that need to happen for a stable price to open.
 
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