Anybody buying FB today?

[71 3.0 911]

Originally Posted by Dottore

Worse. I think this whole listing borders on the fraudulent. The stock was way overpriced. The whole thing was hyped by the industry way beyond all decency. And the people who will get farked are little idiots like 71 3.0 911 who fervently believe that because they spend much of their pointless lives on FB, it must be a stock worth buying.

And that this whole farce is currently "the big deal" in US financial markets is truly symptomatic of all that is wrong with the country.

You're assuming I even have a facebook account, or any reason to have one. Fervent I am not. Buying the stock was rolling the dice. I dont believe in their business model as presented and as such, I didnt pump my life savings into the damn thing. I bought 100 shares. If its gone tomorrow, big deal. In the next few quarters, I'll start to trim that 100 based on where the stock stands.

Hyped? Yep. Indicative of impending doom of the human race? Nope. Its just a stock.

[RWebb]

if FB is a miner like a '49er, then who makes the shovels they use?

ORCL? CSCO?

[intakexhaust]

FB IPO.... repeat as Groupon, Pandora, Zynga....

Also, someone mentioned tangibles by Apple but should add Google.

[McLovin]

Originally Posted by Dottore

And crying. Most of his stock is locked for several months.

If Zuckerberg is crying over money, those are the tears I'd like to shed.

[RWebb]

now, people are blaming NASDAQ for bad execution...

personally, I always post on SpaceBook instead...

[widgeon13]

It's down to 32.82 in pre-market trading, that's not NASDAQ's problem just pure lack of confidence in the marketplace.

[dienstuhr]

Originally Posted by RWebb

personally, I always post on SpaceBook instead...

You and my 78-year-old mother-in-law... when we were discussing it on the weekend she kept calling it "SpaceBook" too.

d.

[techweenie]

Tech market is soft at the moment, so not the best IPO timing. But on top of that, the underwriters put the stock out at the high end of the range and shouldn't have.

At some point, somebody is going to begin some truth-telling and admit that the great engine of social media does not deliver results for every type of company, and that for most companies, the ROI on Facebook and other social media sites is very, very low. Then we'll see an implosion of activity. We've already seen comments by GM that Facebook didn't do much for them.

Why GM And Others Fail With Facebook Ads - Businessweek

[Kraqus]

Great link!


In resume:

"Social media users are being social, after all. Unlike the pay-per-click ads that Google (GOOG) serves up only after consumers type in the names of products they are hunting, Facebook ads pop up while you’re bragging about your five-mile run. Curious tire-kickers might click on a GM Facebook ad to see the sexy Chevy Volt, but that doesn’t mean they want to buy one."


And THAT is the big difference between a Social Media site and a SEARCH ENGINE......





Benny

[willtel]

I'll admit I am out of my depth here but this is interesting.

(Video auto plays on page)
Facebook Bankers Secretly Cut Facebook

And now comes some news about the Facebook (FB) IPO that buyers deserve to be outraged about.

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.

This is a huge problem, for one big reason:

Selective dissemination. Earnings forecasts are material information, especially when they are prepared by analysts who have had privileged access to company management. As lead underwriters on the IPO, these analysts would have had much better information about the company than anyone else. So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem.

Any investor considering an investment in Facebook would consider an estimate cut from the underwriters' analysts "material information."

What's more, it's likely that news of these estimate cuts dampened interest in the IPO among those who heard about them. (Reuters reported exactly this--that some institutions were "freaked out" by the estimate cuts, as anyone would have been.)

In other words, during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage. They did not know what a lot of other investors knew, and they suffered for it.

Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.

We first heard rumblings about this last week, and we were so startled that we assumed the reports were wrong. Then, over the weekend, when Reuters reported the basic story again, we said that if it was true, Facebook IPO buyers deserved to be "mad as hell" about it. And now Reuters has the details, and they sound as bad as we had feared.

There are a couple of possibilities for what happened.

The first one is bad news for Morgan Stanley and the other lead underwriters on the deal.

The second is also bad news for Facebook.

According to Reuters, the underwriter analysts cut their estimates after Facebook issued an amended IPO prospectus in which the company mentioned, vaguely, that recent trends in which users were growing faster than revenue had continued into the second quarter.

To those experienced in reading financial statements, this language was unnerving, because its mere existence could have been taken to mean that Facebook's revenue in the second quarter wasn't coming in as strong as Facebook had hoped (why else would the language have suddenly been added at the 11th hour?)

To those who aren't experienced at reading filings, however, the real meaning of this language could easily have been missed. Facebook's users have been growing faster than revenue for a while, so why would it be news that this was continuing?

In response to the amendment, meanwhile, all three lead underwriter analysts suddenly cut their estimates.

Now, regardless of why the analysts cut their estimates (and this will be important), estimate cuts of any sort are material information, so if this news was given to some institutional clients, it also obviously should have been given to everyone.

That's the first problem.

The second potential question and problem is whether Facebook told the underwriters to cut their estimates--either by directly telling them to, or, more likely, by "suggesting" that the analysts might want to revisit their estimates in light of the new disclosures in the prospectus.

If there was any communication at all between Facebook and its underwriters regarding the analysts' estimates, Facebook will likely be on the hook for this, too.

Speaking as a former analyst, it seems highly unlikely to me that the vague language in the final IPO amendment would prompt all three underwriter analysts to immediately cut estimates without some sort of nod and wink from someone who knew how Facebook's second quarter was progressing. (To get this message from the language, you really have to read between the lines). But even if this is what happened, it is still unfair that news of the estimate cut wasn't disseminated quickly and clearly to everyone considering buying Facebook's IPO.

The bottom line is that, even if dissemination laws were followed to the letter (which frankly seems unlikely), the selective disclosure here was grossly unfair.

The SEC needs to look into this.

And as it does, the SEC should also revisit the practice that allows underwriter analysts to develop estimates that are used to market IPOs to institutional clients but are not shared with the public. In Europe, research analysts publish full reports on companies BEFORE they go public. This is a much better system, and the U.S. should switch to it. But at the very least, the SEC should mandate that any information given to some clients (e.g., earnings estimates and changes in earnings estimates) be given to all clients.

[techweenie]

Well, clearly then, reducing regulation of large financial institutions is the answer.

[lonewolf]

This will go down as the biggest overhyped,"sell the sizzle not the steak" company in the history of the exchange.

[john70t]

Originally Posted by techweenie

Well, clearly then, reducing regulation of large financial institutions is the answer.

Not when it involves hundreds of thousands of retirement accounts....
The piracy must go on! :evil:

[stealthn]

Stock will tank; when they start hitting the mobile space with ad's kids will go elsewhere. Most users are coming from the mobile environment where faceblock isn't so it will be death spiral over a year or so.

Nothing to see here move along.....

[john70t]

Originally Posted by Dottore

And crying. Most of his stock is locked for several months.

Not to worry.
Zuckerberg can just backdate the sale, sell it to himself at a tax loss, sell it again at a loss, and then cash in on the "stock-valuation" insurance policy.

Win.

It's all been done before, many times.
Other people will make up the insurance company's revenue, such as working families needing treatment.

[Dottore]

Originally Posted by john70t

Not to worry.
Zuckerberg can just backdate the sale, sell it to himself at a tax loss, sell it again at a loss, and then cash in on the "stock-valuation" insurance policy.

Win.

It's all been done before, many times.
Other people will make up the insurance company's revenue, such as working families needing treatment.

Well then, I rest my case.

[wdfifteen]

71 3.0 911, I'm sorry things aren't working out. I was hoping you would come out on top but, as you said, it was a roll of the dice.

I prefer Vegas, where they give you free drinks when you gamble. And there's always a titty bar a stone's throw away.

[Drisump]

At some point it will be a decent deal....< $0 ? LOL. Many of these highly hyped IPOs don't offer the company at a reasonable valuation to investors, instead, the principals and the investment banks offer a "product" like anything else. Successful IPO's are offered at reasonable valuations and allow the investor to hold on to the stock and make some money doing so. Since few (if any) IPOs recently have the investor's interest in mind, I don't buy them. IMHO if you are very fast on your feet, you can possibly make some money on these stocks. Seemingly, the actual stock price is based on nothing but momentum, but the problem is that momentum works in both ways. Not my style, give me something real to evaluate. Good luck to you guys who have bought.

[techweenie]

Agree ^^^

All of this chortling over the stock dropping from an ill-chosen opening price overlooks the fact that the company's market cap is sitting around $86 billion at the moment. Pretty good achievement for Mr. Zuckerberg & co.

Can they find ways to monetize the social marketplace that will work? They have $16 billion available cash to go buy anyone who figures it out.

[71 3.0 911]

Like I said, I'm going to see how the next few quarters go before I start trimming my shares, if I trim it all. Been reading a lot of news about suits against Zuckerberg and a few others about inside information being released to big names during the last few minutes of the IPO. Thats why many large investment houses started trimming their share projections. Once again, the big houses and their insider trading is sticking it to the common man.

I will hold out for a little while and ride the roller coaster and see what happens, especially with the lawsuit side of things.