Skip to comments.Vanity: Facebook Down over 5% at opening bell May 29. Headed towards sub-$30.
Posted on 05/29/2012 8:11:20 AM PDT by C19fan
It makes you wonder if the Facebook IPO was overpriced to start with. After all, any investment, such as Facebook stock, will find its true market value, based on the collective decisions of buyers and sellers.
I wonder too, why was everyone so excited about the Facebook IPO? What exactly does Facebook do? What product or goods or services do they sell, to get revenue into that company? Is the main reason Facebook has value, because millions of people go there and see the ads? So advertisers who actually do produce a product to sell, will advertise there???
When it gets to $27 Zuckerberg and friends will buy back 50% of the IPO shares,announce a new whiz bang gadget to make FB more appealing and pocket the profits as it rises to $40, then they’ll play the zuckers all over again. I will never understand how FB makes any profit. The ads, while targeted to the individual by profile are easy to ignore.They don’t have the impact of say a page 5 full pager in the Sunday NYT. Does market research show significant upswing in sales when an ad is placed on FB?
Then came the media hype.
The same media which can sell the most unqualified man to ever run for the office as presidential material can sell a $20 stock for $35 . . . for a limited time.
I read an article that suggested its actual value is between $6 and $7 for that many shares. But this is really just the Dot Com bust redux.
You couldn't be more correct!
I heard one analyst on Fox Business this morning saying if it goes below 30, it will fall to 13.
I think those analysts on Fox Business and CNBC are full of ****. I bet the same person talked about how FB was going to go to pop at the IPO to over $50+.
My theory on facebook advertising is that every game or company you “like” sells your information to another, then another... a kiting scam of sorts. I don’t think the revenue generated is actual sales of products but instead mailing lists.
Exactly. Remember back in the late 90s? Dotcom IPO Mania swept the investment world. Kids were creating websites, getting lots of hits and going IPO (before there was even any advertising revenue coming in). Every investor knew there was no product to sell. There was little to no value in the "business." Most of the companies weren't even selling anything. But, the formula was to get in early and get out before it went back down. Insider trading was rampant (I had some opportunities myself but had no money to invest). The wave finally found land in 1999/2000, right before "Mark to Market", Tyco, Enron then 9/11 in 2001.
Stocks have been more thoroughly vetted for the most part since then as the free market finally did correct itself. It's rare that FB IPO type of stuff happens these days (emotional driven stock price runs).
These days something more sinister is happening to over-value stocks. The government is fueling stock price hikes and providing the capital to allow stock price manipulation. When you can afford to buy huge chunks of the shares available for sale to drive up the price and then sell, you can spike a stock price for yourself. When you can tell a couple of well financed folks what you are planning to do, you can make the effect more dramatic and further your quick proffits. It's like a fixed game of blackjack. It's nice to know on which hand all the Aces and Faces in the deck will be dealt. Put your money in on one hand and walk away after the hand is over.
facebook has ads?
103 times earnings??? and that was before GM pulled out its $800,000. And now that they have gone public, they won’t be able to hide their falling revenue like they did before, and many of their employees will now want a real paycheck instead of stock — all of which will be a drain on revenue.
Actually for the folks who got paid out of this, Zuckerburg et al, its the greatest legal theft on record.
This stock is at best an $8-$10 stock. They got it out the door at $38 and idiots actually bought it.
Reality is, its going to continue to tank, because its P/E is so rediculously out of whack, and so many folks have stock in the company that are waiting to dump as much as they can, that its going to just continue to nosedive.
If you have money with an investment firm that bought into this IPO, my advice to you is get your cash out of there now. Any investment manager who would have looked at this thing and though it was REMOTELY worth $20 let alone $38 a share and bought it is an idiot.
Now I know most of those guys got it at $25 or so, so they were looking at automatic 60% return on the money the minute it started selling, so a short flip for them okay, but seriously?
Now that its tanking to those levels, you will see some of them try to support it, but even that will be limited, this things a stinker, and has been from day one.
This IPO was, like most TECH IPO’s about making a few folks rich, not about providing capital for current or long terms needs of the company.
Honest to God, I’ve been through 2 successful IPO’s and work for several public and private companies, and I would never in a million years go PUBLIC unless I had no other choice, if my goal was to build the long term viability of my business. The abject nonsense, bloat and BS that comes with being public, I would ONLY persue if I needed the kinds of capital I could not get on from the corporate bond or lending markets. OR I was ready to just take my payday and not give a damn about the company long term.
Fakebook has fallen below $30.
a potential short
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