Facebook is getting KILLED!

[Mega]

http://www.telegraph.co.uk/technolog...IPO-price.html
Sorry, couldn't help myself
;)
Mike

[Milton Kuo]

Re: Facebook is getting KILLED!

http://www.telegraph.co.uk/technolog...IPO-price.html
Sorry, couldn't help myself
;)
Mike

If the reports are true that the underwriters had to step in as buyers to keep the stock above $38.00 on the day of the IPO, all I can say is, "Couldn't happen to a 'nicer' bunch of guys." Between Morgan Stanley, JP Morgan, and Goldman Sachs, today's 10% drop has them looking at a $1 billion loss in aggregate.

I don't see Facebook being able to justify their current market valuation for years, if ever.

[c1ue]

Re: Facebook is getting KILLED!

It is still too early to tell.

This IPO is notable in several ways:

1) Facebook had already sold a big chunk of itself through many pre-IPO deals
2) It was very actively traded on the 'private exchange' markets.
3) It is clear that a ton of shares were sold - allocations were very loose unlike most tech IPOs
4) Extremely richly valued by anyone's metric

Between the secondary markets and allocations, I wonder if the normal 6 month mark (lockup period) even matters, but time will tell.

[lektrode]

Re: Facebook is getting KILLED!

If the reports are true that the underwriters had to step in as buyers to keep the stock above $38.00 on the day of the IPO, all I can say is, "Couldn't happen to a 'nicer' bunch of guys." Between Morgan Stanley, JP Morgan, and Goldman Sachs, today's 10% drop has them looking at a $1 billion loss in aggregate.

I don't see Facebook being able to justify their current market valuation for years, if ever.

+1
not that i'm any kind of expert...
but its kind of hard (impossible) to see how any outfit can be instantly worth more than macdonalds and the golden arches... when they dont even own anything other than a domain name and some software?
vs micky-d's (and/or the franchisees) owning land and buildings in some of The Most Valuable retail slots on the planet?

and yeah - couldnt have happened to a nicer bunch of guys, who might just be sitting on the biggest pump n dump story of all time:

Today5d1m3m1y5y10y

52wk high: 45.00
52wk low: 38.00
EPS: N/A
PE: N/A
Div Rate: N/A
Yield: N/A
Market Cap: 72.76 B
Volume: 167.87 M
(after frydays 400+ mil)

lots of news at: http://seekingalpha.com/symbol/fb?so...h_general&s=fb

and not even a week out, they've already been hit with a $15 billion class-action over 'web tracking' ?
http://www.guardian.co.uk/technology...uit?CMP=twt_gu

and....
SURVEY SEZ: http://online.wsj.com/community/grou...hares-end-week
60% think price will be less than 30 by end of week?

and its REALLY heating up now:
Bankers Under Fire as Facebook Slips 11%
http://online.wsj.com/article/SB1000...775222058.html

who knows - this one could even make ole bernie look good by comparison, considering the fees they've already
'madoff' with....

(sorry, couldnt resist ;)

[Thailandnotes]

Re: Facebook is getting KILLED!

Lots of writers are taking a swipe at Facebook for its share w/o voting rights, but I think the add revenue is suspect...latimes...

At heart, these arrangements are expressions of contempt for the very principle of taking a company public. Facebook didn't have to go public to raise money, of which it had plenty in the bank. It was pushed into doing so by federal law, which mandates public financial disclosures once shares in a company become distributed to a large enough insider group. Zuckerberg was indisputable king of Facebook the private company; so why should anything change for Facebook the public corporation? (snip)

It's not as though Facebook has clear sailing ahead. Its user growth rate has already slowed, its weak spot is advertising on the mobile devices through which more than half of its users log in, and major advertisers such as General Motors question whether Facebook ads work at all. These issues would be challenges even for a veteran chief executive with an experienced board looking over his or her shoulder; what about for one who doesn't think he needs to answer to anybody? Facebook's ownership structure "destroys accountability," Elson says, "and accountability makes you a better manager."
Ads by Google

It may turn out that Zuckerberg is exactly the visionary genius he's billed as. Some young CEOs are, but how many? All we can say is that whatever the number is, it's a lot smaller than the number of wunderkinds anointed thusly by their public relations flacks and shills in the press.

Indeed, if you're wondering whether Zuckerberg will wield his imperial power with the maturity and circumspection one expects from the CEO of a corporation valued at more than $100 billion, the hints are emerging. In early April, after the IPO was already in train, Zuckerberg privately worked out a deal to acquire a photo-sharing service named Instagram for $1 billion. It was Facebook's largest acquisition ever, it is widely regarded as an overpayment, and the Facebook board learned about it after it was a fait accompli.

http://articles.latimes.com/2012/may...ltzik-20120517

[sunpearl71]

Re: Facebook is getting KILLED!

2) It was very actively traded on the 'private exchange' markets.

Here is a graphic illustrating the activity on Facebook shares in SecondMarket.
https://www.secondmarket.com/facebook-on-secondmarket/

[c1ue]

Re: Facebook is getting KILLED!

Here is a graphic illustrating the activity on Facebook shares in SecondMarket.
https://www.secondmarket.com/facebook-on-secondmarket/

Great info - thanks for the post.

Especially interesting is the average number of shares sold: over 450,000

[sunpearl71]

Re: Facebook is getting KILLED!

Glad you liked it.

Agree with you that the high average number of shares is quite interesting.

The company must have been generous in handing out shares to employees.

[c1ue]

Re: Facebook is getting KILLED!

The company must have been generous in handing out shares to employees.

Perhaps, or perhaps the former employees selling out were executives dumping their generous vested options. Note the number of transactions totals something around 300.

I also don't know if rank & file employees could sell on the secondary markets.

[sunpearl71]

Re: Facebook is getting KILLED!

Good point.

[Andreuccio]

Re: Facebook is getting KILLED!

More bad news:

Facebook Bankers Secretly Cut Facebook’s Revenue Estimates In Middle Of IPO Roadshow


Reuters' Alistair Barr is reporting that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow.
This by itself is highly unusual (I've never seen it during 20 years in and around the tech IPO business).
But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

http://finance.yahoo.com/blogs/daily...133648905.html

[doom&gloom]

Re: Facebook is getting KILLED!

I had a friend who bought severl hundred thousand dollars of FB last year on the private market. I have no idea what he paid for per share.

I told him shortly before the IPO that this looked like a classic 'pump and dump' with too much ype, and that the smart money will get out on day one.

He didn't get out -- he is a true believer.

Given he bought it mid last year or so, I question now if he even made any money on it, or ended upa loser for it.

[seobook]

Re: Facebook is getting KILLED!

Google & Groupon were treated with utter contempt & the worst thing brought up before the Facebook pump-n-dump IPO was that GM would be halting their advertising. That the media had almost nothing else to say on the negative front coupled with so much hype was a hint where the stinker was headed.

[BigBagel]

Re: Facebook is getting KILLED!

I was watching CNBC yesterday. In relation to the Facebook IPO Cramer stated that the retail investor has no interest in being in the market. That it's in effect a rigged game and that the regular Joe gets fired from his 60,000 dollar a year job for screwing up but the S&P 500 CEO gets a 2 million dollar pay raise if he screws up. He said there are only two fire-able offenses for a CEO: Lying on your resume and GETTING CAUGHT engaging in criminal activity.
I guess the newsworthy thing is that a major CNBC talking head would say such things and the concern that there may be an absence of eager bagholders in the current market.

[reggie]

Re: Facebook is getting KILLED!

The primary metrics that drive FB are not economic, never have been. Stafford Beer refers to Cybernetics as the science of the unknown, and its control. This is where FB's value lies.