OFFICIAL Facebook IPO Thread

Will you be purchasing Facebook stock?

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If you bought into the IPO you're a fucking sucker. I posted this on another forum before last friday, multiple times but here are the cliff notes:

Did anyone honestly believe that the social network was worth 104 billion? Between january and march of this year, fb netted a grand total of $205 million with a revenue slightly north of 1 billion. At a very maximum, we're looking at $820 million per year net (assuming that the social site isn't on a decline as some elucidating stats proclaim).

How can a company doing $4 billion in revenue a year with roughly a 1/5 of that in net be worth ANYWHERE near $100 billion?

Now before you lecture me on future monetization plans, let me tell YOU something: that's purely speculation. You don't know *shit* and you're speculating on fb's so far lackluster ability to monetize their user base. Do you really base your financial security off a gamble (and a poor one at that)?

Noob
 


WhatupG said:
Trading based on the funnymentals is a sure way to blow out your account. It's not hard to understand. Price is set by the market, and by the BIG players in the market, not by some economic theories or ideas in peoples heads.

Once again

"The market can remain irrational much longer than you can remain solvent."

And along the same lines:

"The market is ALWAYS right"

I learned these lesson many years ago. Don't ever argue with the market based on some bs idea you have about what the "value" of a stock should be. I didn't buy FB, simply because it has shown nothing but weakness. It could have a forward p/e of 2 and I still wouldn't have bought it.

Markets are rarely rational, but they are always right. It's not only insanely arrogant, but completely irrational to think YOU know more than the big banks. Anyone who has been trading for more than a few years knows full well that the market places its own price on a company regardless of any silly funnymentals. Sure, do your research, the funnymentals will tell you a lot, and are a valueable tool, but they do not directly correlate to the value/price of a publicly traded company.
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Tell that to Buffett.
 
ChickenFucker said:
If you bought into the IPO you're a fucking sucker. I posted this on another forum before last friday, multiple times but here are the cliff notes:

Did anyone honestly believe that the social network was worth 104 billion? Between january and march of this year, fb netted a grand total of $205 million with a revenue slightly north of 1 billion. At a very maximum, we're looking at $820 million per year net (assuming that the social site isn't on a decline as some elucidating stats proclaim).

How can a company doing $4 billion in revenue a year with roughly a 1/5 of that in net be worth ANYWHERE near $100 billion?

Now before you lecture me on future monetization plans, let me tell YOU something: that's purely speculation. You don't know *shit* and you're speculating on fb's so far lackluster ability to monetize their user base. Do you really base your financial security off a gamble (and a poor one at that)?

Noob
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Convenient that you posted that on another forum, maybe you should take your candy ass back over there?

Of course it's speculation, nobody buys on a multiple of 100X+ without speculation.
 
tencentpiece said:
Convenient that you posted that on another forum, maybe you should take your candy ass back over there?

Of course it's speculation, nobody buys on a multiple of 100X+ without speculation.
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There's nothing wrong with speculation, but obviously you'd have to be stupid to buy at $38 when most analysts were putting it at $6-$14. It would have to grow at 24% annually for the next 10 years to be worth $35, how about a show of hands that think that'll happen..anyone? Anyone?

ROFL, even at 17X earnings the stock isn't worth more than $6.50.
 
Insomniac said:
You're an idiot. Why you might ask? Facebook traffic is targeted by demographic, NOT intent. For example, I could target Game of Thrones fans, and show them ads that they are likely to click. The problem is those people have no intent to buy at the time they clicked the ad. Paying 50c+ for a click, only to have to pre-qualify the fuck out of them to build intent to buy, is fucking crazy. I'm better off collecting data for future marketing, than trying to sell.

Google on the other hand, shows intent. If someone searches for "golf balls", they are more than likely showing intent to buy some. They could be window shopping, but even so, they are showing 1,000% more intent than someone clicking an ad on FB. Did I mention the click on Google is likely even cheaper than FB?

Even better, Google gives new traffic daily. How so? Lets take someone searching for "payday loans". The chances are they are searching for loans, because they don't know where to get them already. Sure someone might search a couple of times to find what they want, but you're generally not paying for shitloads of repeat traffic. FB on the other hand, once you saturate the people who went far enough to say they are interested in a niche, that niche is over - you get very little fresh traffic. Google can give you 1k+ leads/day for an entire year on a single campaign with absolutely zero ad churn. Can you do that on FB? Fuck no.
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You are absolutely right about intent.
But with a new "facebook search" feature we will have "intent".

Google is not invincible. Facebook search will manifest. All you need is money to crush google, Facebook has the cash now.

I suggest you pile in.
 
ChickenFucker said:
Now before you lecture me on future monetization plans, let me tell YOU something: that's purely speculation. You don't know *shit* and you're speculating on fb's so far lackluster ability to monetize their user base. Do you really base your financial security off a gamble (and a poor one at that)?
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Some people have money that their financial security doesn't depend on, who specifically take shots like this.

A lot of people don't remember Apple almost going under a few times, or Amazon being on the chopping block.

Stop expecting linearity when you know the one thing which is constant is change. Whatever fb's position today, it will be different in a year. What that position will be is a matter of speculation.

nickster said:
Tell that to Buffett.
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Invoking his name really isn't an answer to anything. It's like saying, "tell it to Jesse Livermoore". Oooohhhhhhh

SEOFrog said:
Any good books on amazon where I can learn about the stock market and finance in general? You guys might as well be speaking another language.
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[ame="http://www.amazon.com/gp/product/0071373616"]Amazon.com: How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition (9780071373616): William O'Neil: Books[/ame]

[ame="http://www.amazon.com/gp/product/0471592242"]Trading for a Living: Psychology, Trading Tactics, Money Management: Alexander Elder: 9780471592242: Amazon.com: Books[/ame]

[ame="http://www.amazon.com/gp/product/047179063X"]Amazon.com: The Essentials of Trading : From the Basics to Building a Winning Strategy (Wiley Trading) (9780471790631): John Forman: Books[/ame]
 
nickster said:
Tell that to Buffett.
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No need to. Buffet clearly understands the market and has found a system that works.

If you spent the time, money, and effort to research companies the way Buffet does, then you may have half a chance of following in his footsteps. The average trader, is nowhere close. They can only follow the public news releases, what the companies, banks, and brokers want them to "know."

There's no comparison.
 
Over 9 million bids got filled on that last push. Very surprising.

Will make a nice squeeze when they all run to cover their longs.
 
I certainly wasn't arguing that the stock doesn't have a certain element of...volatility. In fact I was saying the exact opposite - it's going to move rapidly. Downwards. There is no justification for a P/E of 100 when there are no solid monetization strategies being laid down (in fact Zuck specifically said he was going to focus on the social aspect of the website rather than the commercial side). Furthermore, the muppets are making assumptions that the company would be able to make consistent 24% annual gains for the next 10 years to even stabilize at $35 a share. Don't sit there and lie to my face that you think it's possible for this 1 trick pony of a company to do that.

1. Assuming more users join facebook, they would actually drive the annual value per user down because it would be the poorest nations demographics and nations joining. Would their value even be able to justify the cost of the bandwidth they would consume? That's problem #1.

2. As mentioned before, a P/E of 100+. Of course this is a no brainer, why would you even think about this kind of risk if you weren't looking for short term gains/shorting.

3. Mobile user monetization - mobile ads consistently perform poorer than desktop ads. Secondly there would be a lot of overlap between the two. There is definitely a lot of potential there, but not enough to justify the hype.

Facebook isn't new to the online marketing game, they've had 4 years to perfect the balance between user retention and commercialization. Unless there's something huge about to happen, I don't see any way for this crock to go but down.

guerilla said:
Some people have money that their financial security doesn't depend on, who specifically take shots like this.

A lot of people don't remember Apple almost going under a few times, or Amazon being on the chopping block.

Stop expecting linearity when you know the one thing which is constant is change. Whatever fb's position today, it will be different in a year. What that position will be is a matter of speculation.


Invoking his name really isn't an answer to anything. It's like saying, "tell it to Jesse Livermoore". Oooohhhhhhh


Amazon.com: How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition (9780071373616): William O'Neil: Books

Trading for a Living: Psychology, Trading Tactics, Money Management: Alexander Elder: 9780471592242: Amazon.com: Books

Amazon.com: The Essentials of Trading : From the Basics to Building a Winning Strategy (Wiley Trading) (9780471790631): John Forman: Books
Click to expand...
 
WhatupG said:
No need to. Buffet clearly understands the market and has found a system that works.

If you spent the time, money, and effort to research companies the way Buffet does, then you may have half a chance of following in his footsteps. The average trader, is nowhere close. They can only follow the public news releases, what the companies, banks, and brokers want them to "know."

There's no comparison.
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Buffett doesn't have a magic trick to outguess the market he only buys on fundamentals, as do many many successful investors. What you are talking about is speculation. Read a book or two about proper investing and you'll see what you are talking is pure bunkum. In fact Buffett actually said he doesn't care about the market only the value he is buying.
 
Not sure about that third book Guerrilla linked to, never read it, but the first two are absolutely required reading in my opinion. Especially 'trading for a living' by Alexander elder. It's the bible. I would recommend all of O'Neill's books, and take good notes so you know it inside and out. It's timeless knowledge, it worked years ago and will work in the years to come.

Confessions of a stock operator is also a great read if you have no clue about Livermore, bucket shops, and the early days. I literally couldn't stop reading the damn thing and read it through in one sitting. Human nature in regard to markets hasn't changed a bit and never will. One more reason why its silly to get blindly caught up on some external valuation method. Livermore never had access to any funnymentals in the early days. He simply learned how to read the tape. He was so good at it, that he had to keep moving and use partners just to trade. The bucket shops wouldn't let him trade very long because his tape reading skill was unstoppable and cost them too much money. Once again, no funnymentals, just simply reading the ticker.
 
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nickster said:
Buffett doesn't have a magic trick to outguess the market he only buys on fundamentals, as do many many successful investors. What you are talking about is speculation. Read a book or two about proper investing and you'll see what you are talking is pure bunkum. In fact Buffett actually said he doesn't care about the market only the value he is buying.
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The hell he doesn't. He spends a ton of time researching companies. He flies out and investigates thoroughly. He talks to employees, suppliers, customers, anyone remotely involved that might have some information. He likely has more information than all the analysts combined about a company before he invests in it. He also doesn't do any short term plays. He is a long term value investor, once again, no comparison.
 
guerilla said:
Care to enlighten me?
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Best I can tell is that to short a stock, as you know, is to sell before you buy it back (hopefully at a lower price) - and the stock is actually "borrowed".

A new issue, like FB, is new - those securities are sold for the first time on the open market.

But trades have to settle, could be about 3 business days (been a long time, I forget the details of this stuff), that is, the securities themselves must be resolved at the accounts of whoever buys them for the first time.

I don't know the body who gives the "all clear" to short a new issuance, but this one probably will be given more than any in recent history.
 
WhatupG said:
The hell he doesn't. He spends a ton of time researching companies. He flies out and investigates thoroughly. He talks to employees, suppliers, customers, anyone remotely involved that might have some information. He likely has more information than all the analysts combined about a company before he invests in it. He also doesn't do any short term plays. He is a long term value investor, once again, no comparison.
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What do you think fundamentals are?? He is just more thorough than most and that's what makes him the best investor in the world.

Short term plays are not investments they are pure speculation, that's why they are called "plays".

There is no comparison because he is an investor and not a speculator.

And he is not the only value investor out there, there are many many others.

I am only arguing against the fact that you said that fundamentals don't matter and I am pointing out how stupid that is. You didn't say you were talking about day trading or short term speculative plays, so if that's what you mean then yes fundamentals don't matter, but then again very little does to a large extent.
 
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