Skip to comments.Jim Cramer Many people do not even have their orders filled..$FB a giant fiasco and a hidden one..
Posted on 05/19/2012 8:03:59 PM PDT by SMGFan
Jim Cramer Tweeting and requesting tweets about possible problem with NASDAQ Facebbok
(Excerpt) Read more at twitter.com ...
Wouldn’t surprise me that the Treasury Dept has purchased Facebook stock.
A huge FB IPO was supposed to convince us that the whole economy is recovering.
Too big to fail. Obamma will save Fakebook and his big donors. Bailout coming.
I’m sure Nancy Pelosi got in on the IPO as a member of Congress...
so , am I correct that Facebook’s plan to earn a larger (?) profit and drive share price above $38 is to be determined?
Is it possible that many sell orders were sold in order to keep it at $38/share when trading ended that day?
I’d expect it to be about $24 by the end of the month.
I am on FB quite a bit and I don’t see how they make money by adds. I barely notice them and would not think of clicking on one.
I just checked. Our order was not filled and apparently cancelled by the broker (hubby said that it was the right procedure). So, we will refigure what to do.
They used to say the markets served to allocate capital for the production of tangible products and as such they served a real purpose for society.
Today the primary mission of the capital markets is still “allocation”, except it is about allocating extraordinarily generous compensation and fees to a group of special insiders in a club that runs a trillion dollar betting casino. Compensation levels have no bearing on the value they create. They just suck it off the top of our economy because they can.
It’s now about making money any which way they can for the financier club; and not for allocating capital to the creation of facilities of production. It’s a gang of insiders who pump, dump and con the public and when they screw up, taxpayers have been put on the hook by a Congress that they own.
As Barack Obama once said “White folk’s greed runs world in need.”
In before the unexpected
The FB IPO is just more proof that P.T. Barnum was right.
I thought the great CNBC Jim Cramer was supposed to warn investors. Clearly I was mistaken. But it could still go up to $50 or more by June 1st?
“I am on FB quite a bit and I dont see how they make money by adds. I barely notice them and would not think of clicking on one.”
Most users rarely click through and advertisers are paying for a venue that will not ever work effectively until they can virtually read your mind. That’s what the ultimate goal has become because then users will click thru on ads because it is what you were thinking.
FB eventually wants to catalog every detail of your life and psyche that eventually will marketeers an ability to analyze your mind and mood. Also they want us lemmings to believe that having one’s mind read by marketeers and government is hip. I personally want no part of it.
You do understand that FACEBOOK is all over the world. They make money so many different ways, not just by ads.
Facebook’s real problem lies with its architecture. Far too many instances of MySQL Far too many.
FB is a fad, and I am tempted to short a stock for the 1st time.
no this isn’t the case. Nasdaq had huge problems, adn there are hundreds of thousands of orders that were never given a report NOR an out. This is a huge problem for the market, and they have to have an answer by late tomorrow to let folks square their books for monday open.
the 38 support was syndicate bid, the underwriters supporting the stock, which they do for the first 30 days of trading iirc. It is legal manipulation, and very up-front.
No-one is Washington has the guts to return the stock market to it’s intended purpose, raising capital for businesses. Short selling, derivatives so complex even the buyers and sellers have no idea of their potential loss. It has indeed become a casino where is all about hedges, trading risk and paying huge compensation for people merely transferring assets from one person to another.
Banks have absolutely no place in these risk management assets and they line so many political pockets it will never go back to the way it was - investment dealers handle investments and banks manage capital.
The Occupy Wall street whackos at least have an essential aspect of their platform correct. Wall Street is corrupt, unregulated and is the antithesis of free market capitalism. It truly is crony capitalism. Look at the Facebook fiasco. Only insiders were offered shares through the IPO for $38 a share. They were hoping to unload it on the suckers who bought all the hype and spent Friday paying the over $ 40. Now the insiders are crying cause they couldn’t fleece the small guy for at least $ 50 a share. Over 500 million shares traded, they got rid of most of it at a profit, in fact the firms that promised the insiders a big fat killing were buying shares to keep the bid above $ 38 most of the afternoon. I wish no-one wanted it and it opened at $ 37. But people were so eager to hand over all that profit to the insiders, they had to delay the opening to get all buy orders in place and set an opening price. The kind of pump and dump you expect from boiler room vermin, played out for the whole world to see.
It’s an embarrassment.
Gonna hafta let Bernie out so he can fix it.
I don’t have to understand any business that sets an IPO price at an unheard of 100 X earnings. Time will tell, but right now Facebook is probably one of the most overpriced IPO in the modern era. If it had been priced at 20 - 30 X earnings that would have been high, but reasonable.
From a purely valuation standpoint, the money they are making now can not justify it’s price. For anyone who bought it at somewhere between $39 - $42 on Friday, maybe if they hold it for 2 or three years they make something. Of course they could get lucky, if there is a huge short position the insiders could start buying and selling amongst themselves, drive the price up in a short squeeze.
Facebook does have integration with content and sub-networking providers like monster.com the job board. Those applications still seem to be cutting their teeth, from my experience with them. I’m using a new Firefox with an old Windows, and when it says it’s pasting my resume experience to my timeline it actually pastes multiple copies of the same recent job at the time I took that job. Pfooey on that! And there’s no way to beg support that I can see.
I heard from one of the stock trading talking heads that a number of investors were shorting the stock on the day of the IPO. I think if I was to put money into its stock I would short it myself.
I tend to believe that the FB shares will drop down between $20 and $25 per share (maybe even less) because there is some value there to the service they provide to the public.
Oh, and some of the providers working with Facebook are probably ad supported themselves. For example there’s the mancave, which markets stuff for man caves (hard core sports, beer, video, etc. dens) and there’s a kitty service that posts a new cat picture on your behalf daily, and there’s a birthday card service that sends cards to your birthday friends (but they can’t read the cards unless they too sign up for it, boo hiss).
Double-oh... when I listed my political preference I put “knuckle dragging conservative.” Voila, Facebook creates a group page for “Knuckle Dragging Conservative”! (But I’m the only member.) You folks won’t be able to see me because I restricted it to friends.
fb is basically a data-form website; users type data into fields and save, fb saves the data for later presentation. It’s a big database of data that users entered.
Most decent programmers can design system that displays a form on the screen and allows the user to edit it.
Google, on the other hand, is at it’s core a proprietary search algorithm.
A very small percentage of programmers would be able to make a site like google and make it work that well. Remember, they’re essentially cataloging every page on the internet and allowing every internet user in the world to then do full text searches on the pages; and the system returns results lickity split.
To test it, simply wait a day or two after you enter a post on FR. Then, using google advanced search, enter the site name criteria freerepublic.com, then search for about 5 or 6 fairly distinct words from your post in the field..
this exact word or phrase:
You’ll find the page your post is on in the top few search results. If you think that’s easy to write, all I can say is try it.
fb average annual revenue per user is about $4, about half what Yahoo’s is and about 15% of what google’s is.
Average Annual Revenue per user is basically the key question: can you ring up sales based on all the users on your site.
Half or more fb users are in countries other than the U.S., which makes finding revenue much more difficult. fb is very popular, for example, in New Zealand. How does one monetize that ?
fb acknowledges that a) they need to invent a whole new monetization scheme and b) they don’t have it invented at this point.
While all IPO’s are in essence a pump and dump, this one is certainly the grandest one to date.
The abridged version; nothing but a scheme to seperate one from their $.
It is priced @ p/e 90+, sans dividend, just saying. But it got notoriety, so that must be worth something, right?
With ads for things that sell in New Zealand? I'm missing the point I guess.
Wow! To read these comments about Cramer is hilarious! He is a TV personality! Do you really think that he is worried about the common man’s investment?
Maybe it’s time to take stock of your own decisions. How about taking the time to understand your investments, where and why!
Folks, the stock investment area is a gamble for everybody. The folks that have the advantage are those that get the information first and react fast. Us, we are the last to know and only provide the money to enrich those that are in the know.
Go safe or get out!
The intelligent investors have likely already sold their Facebook stock.
I know I would have.
FB and Twitter are starting to be used as login entry points to many 3rd party websites and it looks they’ll penetrate further into that market. There are a lot of micro fees that FB is going to be looking to collect on in the future.
you’re exactly right....the stock market is so rigged and its not about owning “part” of a company; its about jumping in on a bait and switch con game....if you can get in and out, which an individual can not do, you might get ahead....
How many Marmite ads can you sell though?
IPOs are merely a game get in fast, watch it rise and get out just as fast.
The whole NZ GDP is about $123 billion.
The population is a little over 4 million, where fb already has 900 million users total, and they already have about 2 million New Zealanders as users.
For a U.S. corp to ring up sales in NZ, there’s the complexity of currency exchange, corporate entities, taxation, regulation, etc. So fb has to jump through quite a few hoops, just to monetize their NZ users, which are only about 0.2% of their userbase. With a little country like NZ, there’s just not much upside left with the current fb model. And NZ is a modern country with decent per-capita income.
Maybe this is not so bad, but they have users in over 200 countries. Including 20 in Vatican City. That’s a lot of hoops to jump through.
Typically advertisers advertise inside their own country, unless they are a large business. And undoubtedly fb already has most large businesses as customers already. They simply need a way to deliver more value per user where they actually can get paid for the value.
At the end of the day, fb is just a website. They have tools and integration, but the bulk of their revenue comes from driving more traffic to the fb website. IMHO, most businesses were goofy for worrying about being on fb, since they have their own website and should actually be driving traffic to their own website. The infamous “social” aspect of fb could be replaced simply by an open standard that could be adopted on every website. And the idea of building a “web presence” without having a website; there are tons of cheap sites that let you build your own site, there’s really nothing special there. fb’s success so far has been all about the “social” mania they’ve created in the past few years.
With the GM pullout, we can see that there’s at least one example of a client not finding enough return for their ad dollars under the fb model as it is now.
If you're not paying for the product...you are the product.
Your exactly correct.
Imagine if FB charged the 3rd party websites .01 cent for each time a user authenticated with the FB service for their website. I would imagine an easy $1B per year right there.
The Stock generated over $100B for Facebook... Now imagine with $100B in the back what kind of company FB could aquire? A Telecom maybe? or a Cable company? They could buy another tech company like Amazon if they desired.
I think FB will morph into something other than a social networking site, just as Google morphed into something more than a Yahoo clone / search engine.
Buying FB stock right now is a bet that what they morph into is going to be successful.
I have a FB account but rarely do anything with it. I use Firefox with Adblock Plus and I didn't even realize FB had ads until I read it somewhere recently.
It was beyond obvious:
“Facebook’s underwriters had to step in to support the company’s share price, people familiar with the matter said. In particular, lead underwriter Morgan Stanley MS -0.82% was assigned to be the deal’s “stabilization agent”meaning it was the firm’s job to keep the shares above the offering price, these people said. In that role, Morgan Stanley was forced to buy Facebook shares as the price slid toward $38 in order to prevent the price from crossing into negative territory, according to these people.”
“I think FB will morph into something other than a social networking site”
Good post, and you’re right. And whatever FB morphs into will likely be evil... in my opinion.
My Dad used to “play” the market quite a bit. But then he noticed that the “market maker” was playing around with some of the stocks he was acquiring. To say he was “ticked off” is putting it mildly. He closed out most of his positions and is now invested in just two and is holding them for now.
In any case he is totally convinced that the market now is completely manipulated and that most people should just stay out.
Facebook’s primary product is you. You’re the thing they sell. Ads? Yeah, sure, in the traditional delivery channel of what is now the internet, ads certainly do account for some revenue. But what YOU like and identify as things you view and add to your profile are all demographics that are sold to vendors. Armed with your (and all the millions of other people’s) demographics, retailers fine tune ALL their marketing efforts.