The Facebook IPO

[Russ Smith]

Lawsuits starting to roll in, Mass and California suing FB and Morgan Stanley for not publicly revealing the Pre IPO revenue downgrades.

Not that I expect anything to come out of it people sue over this stuff all the time but what MS did is apparently VERY unusual it wouldn't surprise me at all to see them get a hefty fine from the SEC.

I do think it's going to take FB awhile to recover from all the bad pub. I also agree with matt they have the platform to be huge, they just have to figure out how to capitalize on that platform. If they do they can be huge, if they don't, they'll be a great example of a bubble.

 

[82CardsGrad]

Guys, if Facebook opened up an on-site storefront, they would CRUSH Amazon and Google. They have so many users, they could do it cheaper than ANYONE. They are already the biggest, stickiest Internet property ever created. The average user spends 8 HOURS A MONTH on the site. No other Internet property in the world has ever approached that kind of eyeball attention. Frankly, there are TV networks that would kill to have those numbers. It would be iTunes on steroids. Sell movies, music, clothing -- anything pop culture related. In a heartbeat. All they got to do is put a small portion of that new capital they have into something like it.

And ... they could maintain their free status and public sentiment.

Oh, and that would make it the killer mobile app of our generation in one shot.

No doubt Matt... which makes it a potentially terrific long-term investment. Of course, Zuckerberg and his team still need to execute and deliver. But nobody could possibly muster a counter to the incredible fact that Facebook possesses untold and never before seen potential due to the shear numbers of users and amounts of time spent on the site...

 

[Russ Smith]

No doubt Matt... which makes it a potentially terrific long-term investment. Of course, Zuckerberg and his team still need to execute and deliver. But nobody could possibly muster a counter to the incredible fact that Facebook possesses untold and never before seen potential due to the shear numbers of users and amounts of time spent on the site...

AS someone on CNBC said the other day to put it into scale, if FB charged each user $1 a year, they'd be pulling in 900 million annually (they'd lose people of course who wouldn't pay). He wasn't suggesting they do that just pointing out how big the subscriber base is.

Advertisers have to figure out how to best exploit that and they have to get the mobile app part of it down, if they do it can be huge, if they don't, colossal failure but still a very popular site.

 

[asudevil83]

AS someone on CNBC said the other day to put it into scale, if FB charged each user $1 a year, they'd be pulling in 900 million annually (they'd lose people of course who wouldn't pay). He wasn't suggesting they do that just pointing out how big the subscriber base is.

Advertisers have to figure out how to best exploit that and they have to get the mobile app part of it down, if they do it can be huge, if they don't, colossal failure but still a very popular site.

and the more facebook becomes JUST and advertising stream and a place for business to spam the **** out of people's pages, the more people will migrate away.

IMO, just as myspace saw a dramatic spiral downward is its user base, the same thing will eventually happen to facebook. to me, i dont see facebook and a social network. they've incorporated way too much corporate advertising.

"if its free, you arent the consumer, you are the product."

and i believe the ONLY reason Google+ still exists is to gobble up these people who wake up and move on from facebook.

 

[Russ Smith]

and the more facebook becomes JUST and advertising stream and a place for business to spam the **** out of people's pages, the more people will migrate away.

IMO, just as myspace saw a dramatic spiral downward is its user base, the same thing will eventually happen to facebook. to me, i dont see facebook and a social network. they've incorporated way too much corporate advertising.

"if its free, you arent the consumer, you are the product."

and i believe the ONLY reason Google+ still exists is to gobble up these people who wake up and move on from facebook.

Definitely possible. FB has already gone way beyond what MySpace ever was, but I am concerned about some of their goals etc. They overpaid for Instagram, although the price is coming down quickly since it was a stock deal. There are rumors about them getting into the smart phone business and some other things(Pinterest etc) that concern me based on what they paid for Instagram.

Options started trading on FB yesterday and hammered the stock again.

Honestly had I had any idea of course I'd have waited to buy, but I still probably would eventually have bought some. the big concern now for me is with all the lawsuit talk going around there's talk that they may call Zuckerberg and the lawyers in front of congress. I'm sure it's a big PR stunt by Congress but I just have this fear of Zuckerberg showing up in his hoodie and not taking any of it seriously and really further harming the brand name and thus the stock.

That was always my big concern with the company that he wasn't ready to either be an adult himself, or let the adults take over.

 

[BillsCarnage]

and the more facebook becomes JUST and advertising stream and a place for business to spam the **** out of people's pages, the more people will migrate away.

IMO, just as myspace saw a dramatic spiral downward is its user base, the same thing will eventually happen to facebook. to me, i dont see facebook and a social network. they've incorporated way too much corporate advertising.

"if its free, you arent the consumer, you are the product."

and i believe the ONLY reason Google+ still exists is to gobble up these people who wake up and move on from facebook.

Agreed. I've never bought into FB just as I never bought into myspace. I don't have a FB acct and know more and more ppl abandoning theirs. Had a buddy not login for a month and missed absolutely zilch.

FB was a social network, however once advertisers slither in it becomes a corporation (figuratively). And once FB becomes a public company Zuck will need to watch his back.

In time there will be something newer and trendier.. Just how the waves of the internet roll.

 

[Russ Smith]

This one is FINALLY getting interesting for us idiots who bought near the IPO.

It finally got back over 30 yesterday. FB has announced an "event" on the 15th saying they will release something they've been "building". Rumors are everything from search engine, smartphone to new ecommerce setup. Earnings are on the 30th and the rumors have been they're expected to beat expectations, the announcement on the 15th is clearly meant to be a positive so it would seem the next few weeks will be good news for FB.

The announcement would have to be pretty stunning to get much more liftoff on the stock price it's gone from 18 to 31 in about 3-4 months now. Kicking myself, I had a buy order in at 18 in my IRA for $5,000 worth but I changed my mind before it executed. Had I done that I'd actually be above water now in my IRA on it.

Will be interesting to see what happens, they'd have to have pretty big news on the 15th to get more pop, then you have a 2 week period of anticipation and then earnings. Everyone is figuring they're going to beat so I suspect that's already priced in, so unless it's a huge beat, or the forecast is really good I wouldn't expect a pop. I think a big part of the pop from 25 to 30 is both a short squeeze and presumably news leaking out in advance of the press release about the announcement on the 15th.

Apparently the mobile revenue is really starting to take off so it sounds like they actually are figuring out how to monetize. The PE ratio is still very high but kind of intriguing to watch.

Obviously I'd have been much better off buying something at the time but at least it's finally starting to make some good new.

 

[Gaddabout]

Facebook is going to become monetized for basic functions. For example, want to send a message to someone who isn't your friend? Facebook will do it now for $1.

 

[Russ Smith]

Facebook is going to become monetized for basic functions. For example, want to send a message to someone who isn't your friend? Facebook will do it now for $1.

Yeah nobody is sure yet if that's the announcement or not. They've been testing it for example $100 to send a message to Zuckerberg. They said the idea is say you're Justin Bieber, you want to have a presence on FB, but you don't want to be paying people to wade through all the messages from 11 year old girls. So you make people pay say $2 to send a message to Bieber without being his "friend". That reduces the amount of messages he gets, and produces revenue for FB. An interesting idea and one they admit they're tinkering with on what is the right price.

But until Tuesday we won't know what the actual announcement is. There's even speculation it is just Zuck's wife is maybe pregnant.

 

[Gaddabout]

They've already implemented it on small scale. I know, because I needed to get a message to a reporter on Facebook, and Facebook told me it would cost me $1.

 

[Russ Smith]

They've already implemented it on small scale. I know, because I needed to get a message to a reporter on Facebook, and Facebook told me it would cost me $1.

Yeah it's only being tried out slowly from what they've said. So I can't imagine that's the announcement tomorrow but who knows.

 

[Russ Smith]

I guess the big announcement was "graph search" which allows you to search information shared to you by FB friends.

Stock is still up for the day but down slightly since the announcement so no huge pop.

I guess the pop was built in.

 

[Gaddabout]

I guess the big announcement was "graph search" which allows you to search information shared to you by FB friends.

Stock is still up for the day but down slightly since the announcement so no huge pop.

I guess the pop was built in.

It seems to be killing Yelp. They want to go after Google, I think.

 

[Russ Smith]

It seems to be killing Yelp. They want to go after Google, I think.

Yeah that surprised me. One of the articles I read had the same take I did, why would this kill Yelp it actually validates Yelp as a business. What FB is saying is you get more valuable information searching for personal reviews, even more valuable if it's from your friends. the reality is most people have "friends" on FB they haven't seen in years, I have friends on there I haven't seen in 25 years.

When I wanted to know if the place my mom takes her car for service was ripping her off I went and looked at yelp. I think what FB is doing now is saying yelp is a good idea.

I actually expect someone like Google or FB to buy Yelp down the line. I nearly bought Yelp in my IRA today for that very reason but decided not to.

FB closed down .85 cents or 2.75% so clearly the market didn't like the announcement but it wasn't a huge drop. With earnings coming up in 2 weeks it was't the huge announcement people wanted I guess.

funny apparently lots of people wanted a FB phone, I can already read it on my phone why would I want a FB phone?

 

[BillsCarnage]

What's interesting is that FB is using Bing as its search engine vs the two being separate before. Essentially what MS and FB are doing is trying to generate better(?) ad revenue to take away from google.

A FB phone would essentially do for FB what iphone and droid do for Apple and google. FB could control the ecosystem, thus more revenue.

I just don't see a FB phone ever happening. at least not on an iphone scale. Maybe WP7 scale, max.

If a FB phone happens, my $$ is on deep integration with winphone. Neither Apple or Google will give up any revenue to FB, but MS will just to gain market share. Ala the new search graph.

 

[Russ Smith]

What's interesting is that FB is using Bing as its search engine vs the two being separate before. Essentially what MS and FB are doing is trying to generate better(?) ad revenue to take away from google.

A FB phone would essentially do for FB what iphone and droid do for Apple and google. FB could control the ecosystem, thus more revenue.

I just don't see a FB phone ever happening. at least not on an iphone scale. Maybe WP7 scale, max.

If a FB phone happens, my $$ is on deep integration with winphone. Neither Apple or Google will give up any revenue to FB, but MS will just to gain market share. Ala the new search graph.

Sure I guess my point was I can already get FB on my Android phone(or iPhone if I had one) so why would I buy a FB phone and be tied into a 2 year contract? What would a FB phone offer that I can't get on my phone now, they'd have to tailor features to it and frankly that would just tick off the user base if they knew FB was tryign to force them to buy a phone to get access to certain features.

Zuckerberg has said before they're not going to make a phone.

Earnings will be interesting, I saw someone on CNBC yesterday that says he believes it's possible FB will beat by as much as 10%. He said FB has been notoriously conservative and very hard to accurately forecast because the revenue model is so unusual. That from putting together bits and pieces he believes there has been a substantial uptick in revenue.

I did notice last night my GF logged out and it went to a State Farm ad(Aaron Rodgers) showing before going back to the login screen, thats about the 3rd different ad from a big company I've seen on that page recently. So maybe what this guy is suggesting is true, that they now have lots more ad revenue coming in.

Will be interesting to see, I would think a 10% beat and a good forecast would pop the stock again but seeing it's already run from 18 to 32 and now is just over 30, it would have to be both. I don't think just good earnings would pop it again.

 

[jf-08]

After my initial sell, I picked some more up along the way @ 22.29, 25.85, 28.82, 32.57. It is now back up to 34.36.


Made a little bit of money on good old social media.

 

[jf-08]

Up over $41.

Made over 35% so far, surprisingly.

Interesting read about it though - still not a Buy.

http://www.fool.com/investing/general/2013/08/27/facebook-stock-is-soaring-is-it-still-a-buy.aspx

 

[Russ Smith]

Up over $41.

Made over 35% so far, surprisingly.

Interesting read about it though - still not a Buy.

http://www.fool.com/investing/general/2013/08/27/facebook-stock-is-soaring-is-it-still-a-buy.aspx

Yeah I finally sold all mine at about a 15% profit, which is terrible considering how long I held it. That's the stock that was in my IRA. I sold my regular account shares at a loss, about $550 loss.

Had I bought any number of other stocks I would have made far more than 15% but at least I didn't lose(in my IRA).

My girlfriend still has hers but she only has I think 25 shares.

They are doing a nice job of monetizing but I'm still not seeing that "killer app" that is going to put their stock into triple digits. I hope it does for my girlfriends stock.

 

[Russ Smith]

Boy did I sell too early nearly at 44.50 today. I have no idea why it's popping so much it's up about 15% in the last 2 weeks.

Good for my GF but she has only 25 shares, I had 1250 in my IRA at onetime but sold them all.

 

[Russ Smith]

Next up is Twitter. they filed an S1 today. I have a friend who works there but I don't think I have any money for friends and family stock even if he offered, and I don't expect he would.

I hope he makes a killing, Twitter is ubiquitous but I have to admit I still don't get the allure.

Seems to make it way too easy to say stupid things and make bad predictions.

 

[azonaback]

Advertisment company.

 

[Russ Smith]

Advertisment company.

Over 100 now should have held it in my IRA I guess.