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Facebook IPO

Discussion in 'Social Media & Networking' started by Chris.C, Nov 29, 2011.

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  1. Chris.C

    Chris.C Membership: VIP

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    http://www.bloomberg.com/news/2011-...n-ipo-with-100-billion-of-social-network.html

     
  2. James

    James Membership: VIP

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    Moneys rolling in, Facebook Australia just moved into a new office to which is very nice ...
     
  3. vilsonkarl

    vilsonkarl Membership: Community

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    I think it is not worth to buy it..they do not have assets..It's just only one website.
     
  4. snoopy

    snoopy Membership: VIP

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    signature spam?
     
  5. James

    James Membership: VIP

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    I think it is not wise to invest at this point in time, all investors said this, I didnt get the mum and dad investors who bought in at $38/share.

    But they do in fact have assets been 900 million people on the site, they also have a decent property holding, I think the overall problem was they set the stock too high initially and they do not have future proof revenue streams which is a problem for all investors.
     
  6. xwdomains

    xwdomains Membership: Community

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    The advertising system could use an over haul really only works if your promoting a fanpage then using the fan page to gain clients high bounce rate on a normal website just to bad no one else has opened something better but facebook market share and features is to large and complex to really compete
     
  7. BenWalker

    BenWalker Membership: Community

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    Interesting to see how this will pan out

    http://www.news.com.au/business/com...366293194?sv=22322fdd3a968b92a0d57c911004d3da

     
  8. James

    James Membership: VIP

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    But the thing is with Facebook most big brand promote the FB page naturally and spend no money, I did this with many pages grew them to like 100,000 fans all naturally and spent $0, I still have some decent sized pages from natural growth but interaction rates are slipping it seems.

    Facebook in recent times has gone out and hired all the best revenue people from Google and other companies to get things moving, but I think the problem is they really started off as a company which was anti-ads, hence almost going broke in the early days.

    But yeah Facebook is trying new things with ads recent examples:

    - Log out page ads/ video
    - Video on the top of timeline pages
    - Making uers page to promote their own posts (1-5$ per post)
    - A bunch of new roll outs in the ad offering, I heard they are also overhauling many things. Another problem is Facebook reps in Australia are too slow to move, I say to them can you get us some first to market knowledge, they are like for sure, then usually I can get it way quicker from my US contacts.
     
  9. Alex

    Alex Membership: Community

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    Facebook's Eduardo Saverin gives up citizenship: Shrewd tax move?

    Here’s a tax tip for Mark Zuckerberg: Give up your U.S. citizenship.

    To read more ---> Click here

    lol
     
  10. Chris.C

    Chris.C Membership: VIP

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    I think Mark should focus on getting Facebook to actually make more money so he gets himself a real tax issue.

    At this point, still having his controlling stake in Facebook, if he was to ditch his US citizenship, move to Singapore, liquidate his holdings whilst the price is still in a bubble (anything over $10) then watched the company drop to a fair value (somewhere between $2 and $5) he'd have a LOT of angry investors who felt he "sold them down the river".

    Then it wouldn't matter if he was a US citizen and his money wouldn't help him.
     
  11. findtim

    findtim Membership: VIP

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    auDA Member:
    Yes
    anyone that is paying $30 a share IS being sold down the river.

    you are just buying electricity, at least google does make money and actually does make money FOR you

    tim
     
  12. ScottNugent

    ScottNugent Membership: VIP

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    I don't know why anyone ever bought this. It seems way too obvious that it would do this?
     
  13. snoopy

    snoopy Membership: VIP

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    I didn't see anyone predicting before the fact, "this is going to tank almost immediately upon listing". Personally didn't imagine it. They had a lot of bad luck/timing, with all the downgrade stuff, general motors pulling ads, ipo technical problems etc.

    Then the stock has been publicly available for years so what is so special about the IPO that people would expect gains? (then again I'm saying that after the fact)

    I thought if the curtain was going to get pulled up on this though it might take years (assuming they don't get the business model right - I don't think it really works now, who knows what will happen though).

    I guess the question is perhaps, what is wrong with it falling 25% anyway? If it went up 25% in the first two weeks nobody would complain about that, even though the people who sold in the IPO would have obviously lost out selling too cheap, so what is so bad about the other way around?
     
  14. snoopy

    snoopy Membership: VIP

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    I didn't see anyone predicting before the fact, "this is going to tank immediately upon listing". Personally didn't imagine it. They had a lot of bad luck/timing, with all the downgrade stuff, general motors pulling ads, ipo technical problems etc.

    Then the stock has been publicly available for years so what is so special about the IPO that people would expect gains? (then again I'm saying that after the fact)

    I thought if the curtain was going to get pulled up on this though it might take years (assuming they don't get the business model right - I don't think it really works now, who knows what will happen though).

    I guess the question is perhaps, what is wrong with it falling 25% anyway? If it went up 25% in the first two weeks nobody would complain about that, even though the people who sold in the IPO would have obviously lost out selling too cheap, so what is so bad about the other way around?
     
  15. Chris.C

    Chris.C Membership: VIP

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    Agreed. It's easy for us all to be know it alls in hindsight.

    That said, I honestly think that Facebook shares will be worth less $2 within 7 years, but I definitely wasn't expecting it would drop so quickly. I was figuring it would take 6 - 12 months before most investors, who one can only assume are investing based on growth prospects, figured the growth they were expecting wasn't forth coming and I figure it would take 6 - 12 months for that to be evident. I expected it to be a bit like groupon (it took groupon investors a good 4 - 6 months for reality to set in).

    That said, I think Facebook isn't groupon. Facebook is definitely a better business model than Groupon, I'm just not sure it's a great one and the problem for Facebook is when you IPO at 100 times earnings you just really have to grow at an astonishing rate to justify that valuation. So even if they manage to increase earnings, modest growth rates of 10% - 20% per year won't be enough for investors to justify that share price, people are expecting 50 - 100% year on year growth. So I think a share price decline is inevitable because the earnings growth goals are unrealistic.


    Nothing is wrong with the price falling from my perspective... if anything it's a good thing (of course it sucks if you already bought in).

    Personally if Facebook price fell by about 85% and it strung together two quarters of earnings growth I'd buy in...

    ;)
     
    Last edited: May 31, 2012
  16. findtim

    findtim Membership: VIP

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    Yes
    Mark always looks like a seriel killer on trial whenever i see his photo, obviously a HIGHLY focused person.

    i'm in 2 minds about facebook, one i personally dislike it but from a business point of view i do see its value for some clients, and two they seem to be "laying foundations" which will lead to MASSIVE towers of growth.

    i think they DO have a plan ( silly statement ) and they are slowly ticking all the boxes and it should make money? sometime, but hey look at amazon and how long it took to make money !

    maybe its just me but i do not like their mantra of "control" , i only have an account so i can keep up with whats happening for clients but i reallly wish i didn't have one.... i get "a friend is having a brithday" emails, someone commented emails etccc i don't have to explain it i'm sure.

    BUT now with google + its like a bad ex girlfriend times TWO.

    --------------

    as for $2 a share i doubt it will go that low, facebook has now got a bunch of stolen/headhunted google people in there to start creating revenue and it will happen.

    but even then i won't be buying any ! its just electricity there are no bricks

    tim
     
  17. Chris.C

    Chris.C Membership: VIP

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    Whatever their plan is it needs to be something new that provides more value that is worthy of getting regular people to part with their hard earned money.

    At the moment they rely on businesses selling ads - problem is unlike Google people don't go to facebook looking for an answer to a problem or with commercial intent and as a result have very little interest in ads.

    So more of the same won't be good enough... they need to innovate.

    Actually Amazon had no problem growing sales, they grow their sales every 12 months like clockwork. Amazon's problem has never been growth, it's problem is only margins.

    It consistently has operated on margins of 0% - 3%, which is generally not a great way to make money - so you can double margins which would double earnings and problem not hurt your sales (though it is the internet and switching costs are low so there are limits) but none the less with potential to increase margins, and continued sales volumes increases it has a real growth story going on (that said at 100+ times earnings I'm still not buying).

    Facebook on the other hand has margins closer to 25% - 50%, so you are going to struggle to double those margins, yet they aren't growing revenue either...

    Amazon's business model is obvious and simple, albeit low margin. Facebook's is less obvious...

    So I don't think amazon you can compare AMZN and FB - they are very different businesses.

    Well if you were to use a PE ratio of 10 - 15 which the rest of the market is currently at, that would put Facebook back in the $3 $5 range... my call for it to be less than $2 centres on my belief investing in companies that compete in the most innovative business climate with no switching costs, fast idea diffusion and adoption, and low margins is just asking for trouble over the longer term.

    Facebook didn't exist 7 years ago, so it's competition might not exist yet either, but just like Mark, there are a lot of smart guys working hard in their garages and they are one great idea away from killing the incumbents.

    When I invest in building a website I need to be confident I'm going to get a return within 12 months, because I just don't trust the online business models of today to work in 12 months time - things change too quickly.

    So when people are willing to pay 100 times earnings... there is some seriously wishful thinking going on.

    Companies I buy don't need bricks, but they need a defensible, value producing system. Facebook is somewhat defensible because people won't switch to other social networks when all their friends are on Facebook, but they haven't worked out how to provide value (a product) that they can charge for yet.
     
  18. geodomains

    geodomains Membership: VIP

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    auDA Member:
    Yes
    New Shirt Out Now

    [​IMG]
     
  19. James

    James Membership: VIP

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    Should turn up to a Facebook event at their office in that, would never be invited back lol
     
  20. twodogs

    twodogs Membership: VIP

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