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

[johnny333]

An interesting phenomena was being discussed on CNBC. When Facebook was being IPO'ed the shares of Apple dropped. Some theorised that some people were selling their Apple shares to fund their FB purchases. The shares of Apple have gone up while the shares of FB is down

I guess it's a case of a bird in the hand is worth two in a bush

 

[Cestbon]

FB share will dorp until US$20++ then stable not more than US$30.

 

[jw5]

An interesting phenomena was being discussed on CNBC. When Facebook was being IPO'ed the shares of Apple dropped. Some theorised that some people were selling their Apple shares to fund their FB purchases. The shares of Apple have gone up while the shares of FB is down

I guess it's a case of a bird in the hand is worth two in a bush

The comparison between these 2 companies is ludicrous.
One is constantly trying to innovate and come up with new creations and products to satisfy
their users/followers.
The other allows its users/followers to post their ugly pictures and inane comments on their pages,
keep looking and checking these pictures and comments and say whether they like one another or not.

 

[Merl Haggard]

34 now. cheap to buy more.

anyway, don't go all in at once. buy in stages and in small chunks. my budget for fb is tiny. 5 years is long term for me. never panic, but at the same time, never bet against merl. he's always right. but i may prove him wrong on this. it's just a 5-year bet. small change.

The next best bet would be Black Caviar who has left Australia for UK to race in Ascot in June.

Believe it or not, this world champion is gonna run her 22nd race in Ascot to achieve her 22 wins.

 

[eatshitndie]

The next best bet would be Black Caviar who has left Australia for UK to race in Ascot in June.

Believe it or not, this world champion is gonna run her 22nd race in Ascot to achieve her 22 wins.

thanks for the tip of the week. i'm also betting on i'll have another to win the triple crown. gotta dream after all these decades of waiting for a triple crown winner.

 

[Cestbon]

2nd day of the week down again. By This weekend on friday will be stable around $20++ .

 

[Scrooball (clone)]

2nd day of the week down again. By This weekend on friday will be stable around $20++ .

Not likely. Facebook will be trading at volatile levels until their first quarterly performance update.

 

[Sperminator]

31.00 -3.03‎ (-8.90%‎)
22 May 4:00pm ET - Disclaimer
30.50‎ -0.50‎ (-1.61%‎) After Hours
Open: 32.61
High: 33.59
Low: 30.94

Volume: 102,053,826
Avg Vol: 374,448,000
Mkt Cap: 66.28B

FACTS SPEAK LOUDER THAN WORDS... appears that the Market do not agree with the high FB pricing...

 

[Merl Haggard]

After all the hype, FB closed up only 23C or 0.6%.

FB with a PE ratio 124 is much too overpriced....four to five times more expensive than Google or Apple.

In 90 days when the moratorium to sell newly issued shares is lifted, its price has only one way to go.

I don't know how to use FB, but when I see a bubble, I know.

It's a travesty that they fixed the IPO price of FB at $38 per share which valued FB at $100b with only an annual revenue of $3.7b.

At current price of $31, its PE ratio is 99.2x, it is still very expensive compared to Apple & Google.

Lead underwriter Morgan Stanley and Zuckerberg have made so many retail investors become big-time suckers.

 

[Sperminator]

It's a travesty that they fixed the IPO price of FB at $38 per share which valued FB at $100b with only an annual revenue of $3.7b.

At current price of $31, its PE ratio is 99.2x, it is still very expensive compared to Apple & Google.

Lead underwriter Morgan Stanley and Zuckerberg have made so many retail investors become big-time suckers.

Fully agree with Merl's view. In the end it's Zuckerberg and underwriters that made the dough, and the rest of the people who actually bought at IPO price is suckered... now many people KPKB, some even want to sue their brokers... (you won't sue brokers when you make money)

 

[tonychatisaballslessshit]

Re: Online


Facebook, banks sued over pre-IPO analyst calls

<cite class="byline vcard" style="font-style: normal; color: rgb(119, 119, 119); font-size: 12px; display: block; font-family: Georgia, Times, 'Times New Roman', serif; vertical-align: middle; ">Reuters</cite>

By Jonathan Stempel and Dan Levine

(Reuters) - Facebook Inc and lead underwriter Morgan Stanley were sued by shareholders who claimed they hid the social networking company's weakened growth forecasts ahead of its $16 billion initial public offering.

The lawsuit came as Facebook and the banks that took it public face questions about the IPO, which culminated in a May 18 stock market debut plagued by technical glitches.

Facebook shares fell 18.4 percent from their $38 IPO price in their first three trading days. They were up $1.08, or 3.5 percent, at $32.08 in Wednesday afternoon trading.

The lawsuit claimed that the defendants, including Facebook Chief Executive Mark Zuckerberg, Goldman Sachs Group Inc and JPMorgan Chase & Co, concealed "a severe and pronounced reduction" in revenue growth forecasts resulting from greater use of Facebook's app or website through mobile devices.

It also accused Facebook of telling its bank underwriters to "materially lower" their forecasts for the company. The lawsuit said the underwriters disclosed the lowered forecasts to "preferred" investors only, instead of all investors.

"The main underwriters in the middle of the road show reduced their estimates and didn't tell everyone," said Samuel Rudman, a partner at Robbins Geller Rudman & Dowd, which brought the lawsuit on Wednesday. "I don't think any investor in Facebook wouldn't have wanted to know that information."

Andrew Noyes, a Facebook spokesman, said: "We believe the lawsuit is without merit and will defend ourselves vigorously."

Morgan Stanley had no comment. It said on Tuesday that Facebook IPO procedures complied with all applicable regulations and were the same as in any initial offering.

IPO INVESTIGATIONS

The lawsuit seeks class-action status, and was filed in U.S. District Court in Manhattan. It asks for compensatory damages and other remedies.

On Tuesday, law firm Glancy Binkow & Goldberg said it filed its own Facebook lawsuit in California state court on behalf of an investor.

Nasdaq OMX Group Inc was also sued on Tuesday by an investor who claimed the exchange operator was negligent in handling orders for Facebook shares. Morgan Stanley said it is reviewing Facebook trades and would adjust prices for some retail customers who overpaid.

Research analysts at several underwriters lowered their forecasts for Facebook after the Menlo Park, California-based company in a May 9 prospectus that cautioned investors about the possible impact of users shifting to mobile platforms. Facebook said it makes little revenue from mobile ads.

The shareholders, in contrast, called the disclosures of Facebook's business risks inadequate, saying that analysts knew more about these risks and cut their business outlooks accordingly -- for the benefit of only some investors, not all.

"If Facebook told analysts to materially lower their forecasts, it should have told the entire market," said Antony Page, a professor at the Indiana University Robert H. McKinney School of Law. "We need to know what exactly was said to the analysts, and determine how different Facebook's public story was from its private story."

Regulators including the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Massachusetts Secretary of the Commonwealth William Galvin are looking into how the IPO was handled. The U.S. Senate Banking Committee is also reviewing the matter.

BofA, BARCLAYS ALSO SUED

The New York lawsuit was brought on behalf of Dennis Palkon and Brian Roffe, who said they respectively bought 1,800 and 200 Facebook shares at the IPO price, and Jacob Salzmann, who said he paid more than $123,000 on May 18 for 2,961 shares at an average $41.77 each.

Citing people with direct knowledge of the matter, Reuters this week reported that Facebook during its IPO road show advised analysts for its underwriters to reduce their profit and revenue forecasts.

It also said underwriters Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America Corp cut their forecasts after the May 9 prospectus was filed but that these cuts were not publicly revealed before the IPO.

"If Facebook faced a known and particularly salient risk, boilerplate language would be insufficient," said Elizabeth Nowicki, an associate professor at Tulane University Law School and a former SEC lawyer. "If Facebook told underwriters to lower their forecasts, it would certainly be material."

Bank of America and Barclays Plc are also defendants in the New York case, as are Facebook Chief Financial Officer David Ebersman and several Facebook directors.

Bank of America spokesman Bill Halldin, Barclays spokesman Mark Lane and Goldman spokesman Michael DuVally declined to comment. JPMorgan did not respond to requests for a comment.

The case is Brian Roffe Profit Sharing Plan et al v. Facebook Inc et al, U.S. District Court, Southern District of New York, No. 12-04081.

(Additional reporting by Alistair Barr in San Francisco, and Nadia Damouni and Olivia Oran in New York and Sarah N. Lynch in Washington, D.C.; Editing by Martha Graybow and Steve Orlofsky)

 

[Cestbon]

Re: Online

I think FB die die must find a way to up the price to $38 if not will be sue. But too bad where they going to get the money to buy back the share.

 

[CheesePie]

 

[CheesePie]

Facebook Under Fire: It’s the Valuation, Stupid! Says Peter Schiff
<cite class="byline vcard">
By Jeff Macke | Breakout – <abbr title="2012-05-24T15:42:27Z">3 hours ago</abbr></cite><object width="576" height="324">

</object><object width="576" height="324"><embed width="576" height="324" allowfullscreen="true" src="http://d.yimg.com/nl/techticker/breakout/player.swf" type="application/x-shockwave-flash" flashvars="browseCarouselUI=show&vid=29450255&"></object>

Less than a week after Facebook's (FB) IPO there are already rumors that Facebook is considering a move from the Nasdaq (NDAQ) to the NYSE (NYX). According to Peter Schiff of Euro Pacific Capital, switching exchanges will accomplish nothing for Facebook.

"The problem isn't where it's listed—it's the valuation!" says the author of The Real Crash.

Though valued like a growth company, Schiff thinks Facebook's best days are behind it. "How many people on earth are members? It's not like there's that much opportunity to grow." For the record, there are roughly 6.8 billion people on earth, 901 million of whom have Facebook accounts.

Schiff says Facebook is only the latest example of a flawed system. He blames the regulators, not because there are too few rules, but because there are way too many. The high cost of jumping through regulatory hoops means only more mature, expensive companies can afford to go public. Up until then, the only people invested in a company were Venture Capitalists, Private Equity, and assorted well-connected, well-heeled individuals.

Those lucky few are using the IPO as a chance to cash out to the public. "By the time the average American gets a shot at all, the upside is gone," says Schiff.

In the case of Facebook, the little guys may have gotten doubly hosed. During the road show, the underwriters reportedly lowered earnings estimates prior to the IPO, then only disseminated the news to select institutions and clients.

The specifics of Facebook are different, but in the larger picture Schiff says the Facebook IPO is no different than any other offering. The insiders who are selling know the company is ripe to be sold while the outsiders wager on better days.

Schiff says of the average IPO investor: "You're betting on the come but meanwhile you're paying through the nose." That's not a recipe for investing success.

 

[CheesePie]

Facebook Shares Plunge Again: Will Options Trading Fuel More Volatility?
By Matt Nesto | Breakout – 2 hours 28 minutes ago<object width="576" height="324">

<embed width="576" height="324" allowfullscreen="true" src="http://d.yimg.com/nl/techticker/breakout/player.swf" type="application/x-shockwave-flash" flashvars="browseCarouselUI=show&vid=29497213&"></object>

"If you have nothing good to say, don't say anything at all" your mother probably told you many times, and yet, when it comes to Facebook (FB), the doomsayers are ruling the day, while fanatics are nowhere to be found.

As much as options trading is the norm for most large cap stocks, in the case of the newly minted social media stock, the trading debut of its puts and calls has brought with it another new low and more volatility.

"Options allow for people to take long and short positions and levered positions," says Bruno Del Ama, CEO of Global X Funds -creator of the Social Media etf (SOCL)- in the attached video. "So that may add to volatility, but it also adds to price discovery of the stock." And that, he says, is a process that needs to play out, and one that makes deriving early valuation estimates very difficult.

Facebook has its detractors, Del Ama points out that the street's beef is overwhelmingly about price and has little to do with the underlying franchise or network, which continues to garner tremendous respect and admiration. And ultimately, he says, it will gain converts and earn the market premium he thinks it deserves.

"I think the thing people are overlooking on the positive side is what the company will do with revenues," Del Ama says, reminding investors that it is a "very unique asset" that also happens to be "growing very, very quickly."

While he characterizes Facebook's first week as ''awful," he's confident better days and better news flow will come. "Starting now and going forward, there's going to be more focus in the fundamentals," he says, although admits to be worried about choppy trade ahead of 2nd quarter earnings, as well as when the 3-month and 6-month insider lock-up periods are lifted.

In the meantime, the disappointment of the year nominee has now shed 35%, or about $45 billion from it's momentary peak of $45 a share. That plunge makes it about 1/3 as valuable as Google (GOOG), down from about half its size just 10 days ago.

And as much as the criticism of Facebook is currently flowing freely, the day will soon come when someone has something nice to say.

 

[CheesePie]

Facebook shares plumb new depths, valuation questioned

By Alistair Barr and Edwin Chan
SAN FRANCISCO | Tue May 29, 2012 3:58pm EDT

(Reuters) - Facebook Inc shares slid below $29 to a new low on Tuesday as nervous investors fled the company's shares, concerned about the social network's long-term business prospects and an initial offering price that proved too rich.

Shares of the No. 1 social network fell 10 percent to an all-time low of $28.65, before recovering slightly to $29.01. Since its market debut on May 18, the eight-year-old company has shed approximately $25 billion in value -- roughly equivalent to the market capitalization of Morgan Stanley, the lead underwriter of Facebook's IPO.

Wall Street has harbored concerns that Facebook, while boasting nearly a billion users worldwide and dominating Internet social-networking, would have difficulty translating its growing presence on smartphones and other mobile devices into revenue. Rivals Google Inc and Apple Inc are currently more dominant in the mobile arena.

The increasing urgency of Facebook's quest to monetize mobile is spurring widespread speculation over its next moves. Technology bankers say the company will benefit from tacking on mobile operating software through an acquisition of Norway's Opera, which has been on the auction block for a while.

The New York Times over the weekend also cited sources dredging up a longstanding rumor that Zuckerberg was pondering building a Facebook phone, with the new wrinkle that an easy way to acquire the hardware expertise needed was to buy troubled Research in Motion.

Analysts say apart from the challenge of earning money off smartphone and tablet users, Facebook -- which relies on advertising for the majority of its revenue -- may also find it difficult to lure large advertisers.

Days before Facebook's market debut, General Motors announced it was pulling out of paid advertising on the social network, citing Facebook's unproven track record and echoing potential concerns about the lack of evidence that advertising on Facebook yielded strong returns on investment.

"Facebook is in a transition in their business model," Walter Price, portfolio manager of the Wells Fargo Advantage Specialized Technology Fund, told Reuters Insider. "It was easy to get the first 5 to 10 percent of an advertising budget to try it on Facebook and do some brand advertising, but getting the next 5 to 10 percent, you've got to displace TV and that's a lot more difficult to do.

"Facebook still doesn't have the metrics to prove profitability and prove growth and awareness from their platform," he added.

A software error on Nasdaq OMX Group Inc's U.S. exchange delayed the start of trade by 30 minutes on Facebook's first day of trading, which was to have been the culmination of breakneck growth for the cultural and Internet phenomenon.

Instead, claims of selective disclosure in the days leading up to the IPO about Facebook's slowing revenue growth engulfed the company in controversy, as did perceptions among some investors that the stock had been overpriced coming out the gate.

Skeptics had argued even before the botched debut and subsequent selloff that Facebook's starting valuation of more than $100 billion -- about equivalent to that of Amazon.com Inc and exceeding that of Hewlett-Packard Co and Dell Inc combined -- was too high for a company that posted $1 billion in profit on revenue of $3.7 billion in 2011.

Facebook stock debuted at over 100 times historical earnings versus Apple's 14 times. Despite that, many investors bet on a modest first-day pop for the company, which upended traditional technology and business models and is used by about one in seven people on the planet.

TEMPTING OPTION

Facebook options began trading on Tuesday, presenting a tempting target as more investors bet the underlying stock would head south. They piled into put and call options -- granting investors the right to sell or buy stock at a certain price -- marking one of the busiest debuts ever in the options market.

Janet Tavakoli, president of Tavakoli Structured Finance Inc in Chicago, said she bought puts expiring in September with a strike price of $25, at a cost of $210 per contract, -- with each contract representing 100 shares.

"The valuation is a complete bluff. There is still a long way to go down from here," she said. "There will be insiders selling their shares on August 20, when the first lockout period is over. There will be a lot of shares that will hit the market and more in coming months."

Vague talk about Facebook's next moves may also be giving some pause. Rumors that the company may be considering acquiring Opera pushed the Oslo-listed shares up more than 26 percent on Tuesday.

Analysts say the mobile-phone software maker could prove a crucial component in Facebook's still-patchy strategy to earn revenue from smartphones, but it could carry a price tag of as high as $1 billion.

Many Wall Street analysts had been concerned about the apparent hastiness with which Facebook concluded its $1 billion purchase of photo-sharing service Instagram, though Zuckerberg later said it had been considered for months.

Others worry about how Zuckerberg commands more than half of the company's voting shares through agreements with other investors.

"We've been talking about a $50 billion valuation as one that makes sense, I think that would be a stock price around $20," Price said. But "the infrastructure that Facebook is building, and the fact that they have many advertisers that have built followers and fans on their platform, gives them a base to build a great business."

(Additional reporting by Doris Frankel and Angela Moon in New York; Writing by Edwin Chan; Editing by Matthew Lewis and Steve Orlofsky)

 

[Cestbon]

FB price will be even lower if they really go ahead with FB phone.
Can it compete will Samsung/Apple.
Apple will RIP next few year if they still reluctant to change. Now many consumer consider Samsung when replace a handset.

 

[DerMannschaft]

Facebook Seen Dropping 20% To Gain Parity With Nasdaq Rivals

<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; ">By Inyoung Hwang and Brian Womack - May 30, 2012 11:32 PM GMT+0800</cite>

A Facebook Inc. social media logo and a "like" symbol stand on display during a news conference at the Armani Hotel to announce the opening of a Facebook office in Dubai. Photographer: Duncan Chard/Bloomberg

Investors have pummeled shares of Facebook since its initial public offering, citing concern over growth prospects for the largest social-networking service. Shareholders filed lawsuits that said the company and its underwriters overpriced Facebook at $38 a share. The IPO gave Facebook a higher multiple than 99 percent of the Standard Poor’s 500 Index.

“It could fall quite significantly because it was priced at a significant premium,” Sameet Sinha, an analyst at B. Riley & Co., said in a telephone interview yesterday. “Such stocks -- when they go out of favor -- tend to fall before stabilizing.”

Facebook slipped below $30 yesterday for the first time, falling to $28.84 and surpassing its previous low closing of $31, which was set on May 22. The stock fell 0.4 percent to $28.94 at 11:30 a.m. in New York.

Mobile Users

Facebook, based in Menlo Park, California, makes most of its revenue from advertising targeted to members who access the site on computers. The company didn’t introduce a service for ads aimed at mobile users until March.

“We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven,” the company said in a regulatory filing earlier this month.

The company said this month that advertising growth isn’t keeping pace with gains in daily users, and in April reported first-quarter profit fell 12 percent as sales growth slowed and marketing costs more than doubled.

Based on a trailing earnings of $974 million, Facebook trades at a price-to-earnings multiple of 81 times. The Nasdaq Internet Index (QNET), whose members include Amazon.com Inc. (AMZN), Google Inc. (GOOG), EBay Inc. and Yahoo! Inc., has a ratio of 35.4 times profit in the past year and 23.5 times projected earnings.

Bullish investors are speculating that surging demand for social-media stock, coupled with earnings growth faster thananalysts’ estimates, will justify Facebook’s valuation.

‘Disrupting Industries’

“This a company that’s growing and changing rapidly,” Arvind Bhatia, a Dallas-based analyst at Sterne Agee & Leach Inc., said in an interview yesterday. He has a buy rating on the stock and a one-year price estimate of $46. “Google looked expensive for a long, long time. That’s what happens with companies that are changing and disrupting industries.”

The pace of Google’s yearly profit growth has averaged 73 percent since its IPO in 2004, according to data compiled by Bloomberg. While the company’s trailing 12-month multiple has slumped more than 70 percent since its 2004 debut, shares of Google have surged 599 percent from its IPO price through yesterday, the data show.

Bhatia’s price target is based on 30 times estimated earnings before interest, taxes, depreciation and amortization of $3.9 billion in 2014. He said Facebook is cheap relative to companies like LinkedIn Corp. (LNKD), which surged 109 percent in its first day on May 2011 and trades at a valuation more than 5 times higher than the Nasdaq Internet Index’s multiple, based on estimated profit in the next year.

‘Botched Deal’

“It’s a botched deal but the company hasn’t really changed,” Bhatia said, referring to Facebook. “Had these guys come out public in that initial price range, it would’ve been considered a big success.”

Facebook’s price-to-earnings growth ratio is 1.3 based on an annual growth rate of 48 percent for profit through 2013 compared with 2010 earnings, according to data compiled by Bloomberg. That compares to the S&P 500’s so-called PEG ratio of 1.1. The PEG ratio, an indicator popularized by Fidelity Investments’ Peter Lynch, is found by dividing the price- earnings multiple by estimates for profit growth.

The Mountain View, California-based professional networking website LinkedIn has a PEG ratio of 7.3 based on profit in 2010 and the projection for 2013, according to data compiled by Bloomberg.

High Valuation

At the time of its IPO, underwriters led by Morgan Stanley set a price that valued Facebook at 107 times reported earnings in the last 12 months, more than every S&P 500 stock except Seattle-based Amazon.com and Equity Residential, a real estate investment trust in Chicago. The valuation made Facebook, co- founded in 2004 by Harvard University student Mark Zuckerberg, the largest technology IPO of all time.

The company and Morgan Stanley have faced criticism for increasing the number of shares to sell by 25 percent to 421.2 million days before the offering and pushing the asking price to $34 to $38 from $28 to $35.

Facebook increased less than 1 percent to $38.23 on May 18 in a day marred by delays, cancellations and mishandled orders. Robert Greifeld, the chief executive officer of New York-based Nasdaq OMX Group Inc. (NDAQ), said a “poor design” in software driving IPO auctions caused the mishaps.

The company, while having long-term potential, has been hampered by some investors getting more shares than expected, said Ryan Jacob, chief investment officer at Jacob Asset Management. Also, investors may be concerned about shares that will become available for trading after a so-called lock-up period ends, he said.

“It will find a floor,” he said. “Fundamentally, I think there’s a lot of optimism. But there are these near-term issues that the stock has to get past.”

To contact the reporters on this story: Inyoung Hwang in New York at [email protected]; Brian Womack in San Francisco at [email protected]

To contact the editors responsible for this story: Tom Giles at [email protected]; Nick Baker at [email protected]

 

[DerMannschaft]

 

[eatshitndie]

34 now. cheap to buy more.

anyway, don't go all in at once. buy in stages and in small chunks. my budget for fb is tiny. 5 years is long term for me. never panic, but at the same time, never bet against merl. he's always right. but i may prove him wrong on this. it's just a 5-year bet. small change.

well, let’s see who has the last laugh now. did i say “patience” many moons ago? more than 5 years (actually more than 6.9) is a long wait.