OFFICIAL Facebook IPO Thread
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You exude wisdom much of the time. This is not one of those times.
Hmm, my answer is because they see a chance to profit purely in the speculative opportunity that this event creates in the market. Not necessarily because they personally see any value in the company creating the opportunity. Their pursuit of profit has no regard for and is not a reflection of their belief in the value of the asset from which their speculation derives. The asset and the market opportunity it creates is a means to an end, relatively arbitrary and devoid of subjective valuation for them. Which as a result can distort the perceived market value of the asset in question.
I know this is a gray and I think it comes down to what question is being asked. Point being there's a big difference for most people between 'What do people think Facebook is worth?' and 'What does 'the market' think it can make from Facebook?'
But as you argue the profit motive is, so continuing what I argued above I guess we can we say that a portion of the market determining the company's value is a speculative response to others' valuations of the company, rather than a reflection of their own valuations of the company. Which doesn't refute the fact the 'the market' is still determining the price, so...
hmm, extending that argument I guess a free marketeer would argue that these kinds of speculators are seeing others' valuations as a speculative submarket from which to derive profit (dividebyzero.jpg). And also that their speculation, and the liability of their speculation as a market dynamic, is itself a part of the asset's valuation by the market. Hmm. I smell reductio.
Whew that's good to know, that's just about where I stand with Ron Paul's economics
Hello friend,
You may lose $25k of money today but you also gain $25k worth knowledge. In future that $25k knowledge may make you millions of dollars of profits in stocks.
Good luck bro
It's cute that you think my $700 facebook loss is something to cry about. Trust me, I'm much more worried about ASX:TLS being down 1.7%.
At least I actually trade, rather than just talking
.
Morgan Stanley made big bet on Facebook - Yahoo! Finance
Morgan Stanley spent $2 billion to support the stock price at $38. If they didn't keep buying, then the stock would have fell below $38. Probably even closing at $36.
If FB ended up finishing negative on it's first day, there would be a shit load of panic in the after-market and Monday's pre-market. I'm sure it would have opened at $30 on Monday.
Having said that, what Morgan Stanley did was just delay that process. I'm sure we will see the stock drop below $38 sometime between Mon - Wed, and then see a downward spiral until $10-$15; which is where I believe Facebook should trade at.
I've pretty much learned to do the exact opposite of what I think is right. A bit like George Constanza.
No need for a bet, you're posts are a testament to what you don't understand.
If you knew anything about AE, you wouldn't make the statements you do son.
I wouldn't have gotten sucked into it if the media wasn't pushing the same angle. That because FB was so over subscribed and would be expensive on the market, a "smart" way to get a piece of the FB pie would be to invest into closely tied companies. Zynga was one of the most mentioned.
Fucking pumpers.
It was a rhetorical question. I am not interested in the psychological analysis of anyone on this forum. While there are a few bright people here, I don't think it is possible for them to psychoanalyze all of the investors. YMMV.
The profit motive is defined subjectively by our values.
Don't backslide.Whew that's good to know, that's just about where I stand with Ron Paul's economics
That's not a price control. You would be hard pressed to find one economist in the world that would call the underwriters a price control.
Where is your degree from?
That's not a clinical definition of Aspergers.
Dude, this is you. Anyone that's been here long enough knows it.
Yeah, great. Except you don't know what a price control is.
Try reading Mises.
Look, I liked your analysis. I don't really care, but I appreciate how much thought you put into it.
But I just don't care about people analyzing investor behavior, because that has little to do with Facebook's IPO per se, and more to do with a broader phenomenon.
You're not indifferent. Indifferent people don't write posts like that.
wait, so if on monday, facebook stock is worth $25bn, then that's their value? what about that $75bn in imaginary value since their IPO? Were they not worth $100bn on IPO day? or did they lose $75bn over the weekend?
what if they end up at $125bn? why did they all of a sudden jump $25bn in a day? A company is all of a sudden worth whatever people are paying for it at that given minute? Or maybe it's connected to their assets, monetization, and future plans?
A shit ton of people with an eTrade account aren't in charge of what the value of any company is. A company's value is a product of their profit, market share, and revenue growth potential. Facebook's current "valuation" is based on a bunch of absolutely ridiculous speculation. They're struggling to break even and people think they'll be the next Apple.
The tech world has allowed for companies to be deemed successful so long as they have a lot of users and daily visits. THAT.IS.BULLSHIT.
The only metric of success in business is profit.
what if they end up at $125bn? why did they all of a sudden jump $25bn in a day? A company is all of a sudden worth whatever people are paying for it at that given minute? Or maybe it's connected to their assets, monetization, and future plans?
A shit ton of people with an eTrade account aren't in charge of what the value of any company is. A company's value is a product of their profit, market share, and revenue growth potential. Facebook's current "valuation" is based on a bunch of absolutely ridiculous speculation. They're struggling to break even and people think they'll be the next Apple.
The tech world has allowed for companies to be deemed successful so long as they have a lot of users and daily visits. THAT.IS.BULLSHIT.
The only metric of success in business is profit.
Agree. But then the question is profit for whom? Zuckerberg and early investors are feeling a lot of success. People who bought at the IPO not so much.
We wouldn't have any of these tech companies without that business principle. Facebook would not be what it is today if they focussed on monetisation from the very beginning. I explained exactly why it's new in terms of history too.
You could never do it before. Every business (except services.. but they're not high growth businesses anyway) had to own physical property and space to grow. That's extremely expensive. The web provides a platform for cheap exponential growth, which has never been possible before in the entirety of human history.
Therefore, with your costs low, you can neglect monetisation and raise the money from investors instead, with focus just on growing. If you build up a big enough website, that people love, you'll find a way to monetise it successfully.
I don't understand how people are actually arguing against the $100bn valuation to be honest. For a start, people are paying for it - so that is it's value.. Whether it's underwriters propping the price up or whatever, that is currently what people are paying for it, so that is what it's worth in a free market as of yesterday (as has been repeatedly echo'd by G).
Secondly, do you just have no concept as to Facebook's size? No social network has ever been remotely close to the size of Facebook, driven remotely close as much user engagement or successfully collected anywhere near as much data about its users. The data it's collecting is growing exponentially, too - which is more important than the user count.. Then with more and more sites using Facebook plugins, it's collecting massive data about user browsing habits, as well as the fuck off volume of info it has from every single status or wallpost you've ever made (imagine what they could do with AI to decipher all sorts of things from said posts?), things you've liked, etc..
They could release a web browser. (Get even more data on their users)
They could sell Facebook phones.
They could start a behavioural targeted external ad network.
Promoted statuses.
Find applications for FB credits externally.
Build a better search engine with more social input than Google, and display adcents style ads with behavioural, demographic and interest-based targeting on top of the purely contextual stuff adsense pushes..
Vastly improve the ads shown onsite as they get a better grips of data and how to market to the growing network.
& those are just random ideas from a 10 second think, and without knowing what FB is planning to do to the site over the next few years / where it plans it going from an interactivity perspective.
and this is the percent of people in the entire world using FB..
The network effects are massive. Unless FB royally fucks up, people aren't going anywhere. The company will make money. It wouldn't surprise me if in the next 5-10 years it's one of the biggest companies in the world.
It's cute that you think my $700 facebook loss is something to cry about. Trust me, I'm much more worried about ASX:TLS being down 1.7%.
At least I actually trade, rather than just talking
Sounds like doing a great job at it too! I'll leave you to your work.
I should stay out of this thread bc I will probably have my ass handed to me but trying to learn here...
like a previous posted pointed out, aren't intrinsic value and market value obvious distinctions? Ie: Just because a stock is selling for $38 doesn't mean it actually carries that value/worth?
Seems these whole thread is one big semantic, dick swinging circle jerk. (sounds like my kinda party)
like a previous posted pointed out, aren't intrinsic value and market value obvious distinctions? Ie: Just because a stock is selling for $38 doesn't mean it actually carries that value/worth?
Seems these whole thread is one big semantic, dick swinging circle jerk. (sounds like my kinda party)
All value is subjective. All.
This is such a basic, fundamental, key point. Without understanding that, it is impossible for anyone to construct a coherent and intelligent theory about prices.
It should be considered a law. Like gravity, that way anytime someone makes a conclusion where there is a hint of objective value, someone can go,
"Dude, you're violating the 10th law of economics"
That's how a market works.
Again, that is how a market works.
That is your opinion. Put your money where your mouth is and short Facebook if you truly believe you're right.
I recall you recently telling me in T&C there are more important things than making money or something to that effect ...
Personally, I don't get the hate. Who cares what FB sells for unless you're a buyer or a seller. It's fine to have an opinion, but a bit over the top how worked up people get about what someone else is doing. I say good for Zuckerberg and Thiel. I am a huge fan of Peter Thiel. He needs more money to do more cool stuff. If people are willing to give it to them without violence, who is to judge?
There are people (government) who take money from other people by force (taxes) and no one complains or gets as worked up about that as they do about non-violent voluntary and harmless transactions over stock. Weird, eh?