Scarcity isn't what valued Facebook at $100bn today. Extreme speculation coupled with desire for short term profit from the king of buzzwords did. Wall Street got dickrolled, Spin Me Right Round is ringing through the streets I bet.
OFFICIAL Facebook IPO Thread
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Scarcity isn't what valued Facebook at $100bn today. Extreme speculation coupled with desire for short term profit from the king of buzzwords did. Wall Street got dickrolled, Spin Me Right Round is ringing through the streets I bet.
Agreeing with you would mean that people can be ripped off without a threat of violence. Maybe because they can't consent properly. Which would require some sort of society that protected the vulnerable. Maybe even a GOVERNMENT. But then, how people people justify selling among other things, fake pharma, acai, etc?
Scarcity and Speculation are two sides of the same coin. Commodities are worth exactly what you pay for them at the moment you purchase them.
While your speculation may or not be true, it doesn't mean anything. The stock price reflects what people are willing to pay for it. That price of what people are willing to buy it for is how valuable it is to the people buying (the value).
Why did you take the loss? This just seems like an awful decision. Could you explain your reasoning? Or was it just a buy high sell low got caught up in the momentum kinda thing? It's almost at the bottom end and even if it looses a couple more bucks next week it's more than likely going to start to come back somewhat. It looks like a good time to checkout some options contracts
^ I hate that train of thought. . .
I never take more than a 6% loss if I can help it. I know to many people who can't accept that they made a buy at the wrong time hold on because they know it is going to bounce back in a couple days weeks months and just bleed more money.
I never take more than a 6% loss if I can help it. I know to many people who can't accept that they made a buy at the wrong time hold on because they know it is going to bounce back in a couple days weeks months and just bleed more money.
It's not about cutting your losses. It's about doing the opposite of what everyone else is doing. Unless you think they are goin belly today woulda been a great day to buy more
The price/value discussion hurts my head a little. I interpreted what dchuck said as what HE values the company at, or what he speculates the market will eventually value it at.
Anyway, here is another interesting topic that I have observed again and again in the price of things. The market or individual stock prices often do the exact opposite of what most people expect it will do. It's like if you do the opposite of what is logical/the common thinking, you will be right more often.
Anyway, here is another interesting topic that I have observed again and again in the price of things. The market or individual stock prices often do the exact opposite of what most people expect it will do. It's like if you do the opposite of what is logical/the common thinking, you will be right more often.
Facebook's price was artificially inflated today by the underwriters who were buying the stock every time the market price began to dip below $38 in order to keep the price from falling. They weren't buying because they thought the stock was worth $38, they were buying because they didn't want their reputations to go to complete shit from a failed IPO.
Knowing that, I can see dchuk's argument that the stock actually isn't worth the price we see it at. Artificial price controls prevent the market from determining the actual value. I think we'll see a more accurate price by the end of next week once the underwriters let the price float freely.
Knowing that, I can see dchuk's argument that the stock actually isn't worth the price we see it at. Artificial price controls prevent the market from determining the actual value. I think we'll see a more accurate price by the end of next week once the underwriters let the price float freely.
I guess I miss understood the statement. . . but no matter what I believe is about to happen I never take a loss more than 6% if I can help it. I'd rather buy it at a higher price than risk a bigger loss.
I agree somewhat, but the other guys in here are probably going to say the underwriters coming in a buying makes the current value $38. They are buying everything at that level, so therefore it is worth 38 as long as they keep buying. It doesn't matter why they are doing it, but as long as they are doing it, FB is worth 38.
Edit: I don't really see it as artificial price controls. They are a market player just like everyone else. If you had enough money, you could have come in at 39 and kept it from dropping below 39.
They might say that but they'd be wrong. Free markets determine actual value, not price controls.
The stock is trading on the open market. The underwriters were only participating as a normal market participant after it started trading as far as I am aware. What I assume they do, or basically what they do, is put aside a huge amount of money and put in a limit order bid for exactly $38. So if the price ever reaches $38, they start buying everything for exactly $38. This keeps the price from falling below $38 as long as their massive pile of cash is there to support it. If every single person wanted to sell and get out of the stock, they most likely would not have been able to support that and the stock would have caved. But they only had to support it at that level for like 25-30 minutes. Before the close the price was going slightly up because people wanted it before the close and they no longer had to support it at exactly 38.
Like I said above, if you have billions and billions you could have put a huge order in at 39 and say you will only pay exactly 39 for it. As long as you have enough cash, it would never fall below 39.
A company that has a billion dollars in yearly revenue is not worth 100X that. People can spend their money on the stock and you can assert that the value is what people are buying it at, but I refuse to agree in this instance. Facebook's fundamentals do not match up with their valuation.
Net revenue is the core component of business. A company struggling to break even should not be worth 100X what they make, end of story. The tech world has introduced the notion that profit isn't essential to success, which is just plain bullshit. Look at Twitter. Still not profitable. After 6 fucking years.
This IPO is just an early round VC circle jerk. Peter Thiel and Bono are making out like bandits because other people are putting in their money in the hopes that Facebook will one day be Google.
Meanwhile, Google is profiting $300/second.
Net revenue is the core component of business. A company struggling to break even should not be worth 100X what they make, end of story. The tech world has introduced the notion that profit isn't essential to success, which is just plain bullshit. Look at Twitter. Still not profitable. After 6 fucking years.
This IPO is just an early round VC circle jerk. Peter Thiel and Bono are making out like bandits because other people are putting in their money in the hopes that Facebook will one day be Google.
Meanwhile, Google is profiting $300/second.
Right, because the underwriters aren't part of the market.
You guys all need to learn economics. Topics like this which shouldn't even be a point of contention between intelligent adults.
While I actually agree with you that I don't THINK it SHOULD be valued at that, that is, in fact, as of today, the value. According to a record number of traders.
Right, because the underwriters aren't part of the market.
You guys all need to learn economics. Topics like this which shouldn't even be a point of contention between intelligent adults.
the point of this IPO was to get early round investors a legitimate cash-out opportunity.