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93 comments

ac seeks fist post (-1)

Anonymous Coward | more than 2 years ago | (#36636844)

bend over, I'm gonna fist you!

Though High, Not Even Close to LinkedIn Hype (4, Interesting)

eldavojohn (898314) | more than 2 years ago | (#36636846)

If you thought that LinkedIn's IPO was hyped and hyper, Zynga's going to put that all to shame.

Okay so let's take a look at the two IPOs. From Slashdot's own summary of LinkedIn's IPO we have this fact about what the shares were trading at on LinkedIn's opening day:

That price values the company at over 30 times its 2010 revenue ...

So now that we can see Zynga's financials, we see that its revenues for 2010 were $600 million [seekingalpha.com] meaning that if the shares hold at exactly the price Zynga opens at, they will be valuing Zynga at 1 2/3 times their 2010 revenues. Now, of course, last year's revenue doesn't mean everything as growth, market cap, etc come into play. But that 1 2/3 times is substantially less than the ridiculous 39x amount that LinkedIn's IPO skyrocketed to. If the total trading volume's valuation goes from $1 billion to $23.4 billion in the first day of trading then we'd be approaching LinkedIn-levels of bubble hype. How exactly is Zynga going to "put that all to shame"? Are you in possession of some proof that the trading will once again go ape shit past $23.4 billion? I think the recent MySpace sale has shown that a company that makes games (though shaky) is nowhere near as volatiles as a company that relies upon its social network to fill its coffers.

Remember, some folks estimate that Farmville alone is now worth more than EA [slashdot.org].

I hate Zynga with a passion and am convinced that Words with Friends has completely destroyed my Android phone's battery life (all the while showing me ads to improve my battery life) but I think they're a far better bet than LinkedIn. I've commented on Zynga's 7 Eleven partnership long ago [slashdot.org] and I think that market penetration is massive and gives them an upper hand that I cannot fathom how the competition will beat -- especially if that's an exclusive contract.

Re:Though High, Not Even Close to LinkedIn Hype (1)

jhoegl (638955) | more than 2 years ago | (#36636870)

All Linkedin and Zynga prove is that Bubble 2.0 is on the rise and that people are hungry to get back into the investment game.

Re:Though High, Not Even Close to LinkedIn Hype (4, Insightful)

econolog (2081738) | more than 2 years ago | (#36636998)

What we actually have here is new companies filing for IPO's which allows the company to raise capital to expand and generate revenue. Many companies in other sectors launch IPO's long before they are profitable. Consider that we have seen relatively few tech IPO's in the last couple of years. Maybe this should be taken as a sign that there is some growth happening? I thought that before we had a bubble there had to be a build up... After all in the first bubble there wasn't a good frame work for many to generate revenue. Now several forms have been developed and new applications are becoming apparent. This increases the value of tech companies and the odds of new ones becoming profitable. On the other side it could be seen as entrepreneurs going for a mad dash to cash out on the equity they have developed in a scam-like fashion (eg: leaving shareholders with more or less worthless companies while cashing their stock options). I think that is largely how it is perceived in the general financial community but it remains to be seen if this is warranted. It could be a self enforcing effect where financiers see potential signs of a bubble -> cut funding -> entrepreneurs are worried about loss of hard work -> issue IPO. Summary: Could be a little early to call a bubble though the US isn't out of the woods yet.

Re:Though High, Not Even Close to LinkedIn Hype (0)

Anonymous Coward | more than 2 years ago | (#36639428)

what the hell is Zynga gonna do with a billion dollars? this is a pump and dump plain and simple

Re:Though High, Not Even Close to LinkedIn Hype (2, Informative)

Anonymous Coward | more than 2 years ago | (#36636958)

Actually, as Ars points out in an article today, Zynga relies on Facebook for ~100% of its profit. So, more than just relying on a social network, Zynga relies upon someone else's social network. Moreover, most of Zynga's profit comes from a very small percent of its customers (those who actually pay), making Zynga incredibly unstable. All this is from Zynga's on statement, BTW, not conjecture. Too lazy to post the link, but as I said, its on Ars Technica in summary format or in the first link under "risks" if you wanna look there.

Re:Though High, Not Even Close to LinkedIn Hype (0)

Anonymous Coward | more than 2 years ago | (#36637468)

It's like saying Google relies on a small set of people clicking on their ads for revenue - and therefore, Google is at risk. BS.

Re:Though High, Not Even Close to LinkedIn Hype (1)

Man On Pink Corner (1089867) | more than 2 years ago | (#36638960)

What do they rely on, if not exactly that?

Re:Though High, Not Even Close to LinkedIn Hype (1)

yahwotqa (817672) | more than 2 years ago | (#36640102)

You missed the point. The incorrect part of that statement was the one about them being in risk because of depending on only a small fraction of their "users".

Re:Though High, Not Even Close to LinkedIn Hype (1)

KDR_11k (778916) | more than 2 years ago | (#36640378)

Well, they bought up the popular iPhone game Drop7 and renamed it to Drop7 By Zynga. Building up an app store presence would give them other income sources, if their strategy overall is to get a presence in multiple markets that may work out well.

Re:Though High, Not Even Close to LinkedIn Hype (4, Insightful)

lotho brandybuck (720697) | more than 2 years ago | (#36637060)

I'm not going to try to understand the whole prospectus, but if they're "raising" 1B, their total valuation will be over that unless the current stockholders want absolutely nothing for their shares. Somehow I doubt that's going to happen.

Does anybody know what the estimated market cap will be?

I'm sad that there's so much valuation in this virtual crap as opposed to investment in solid manufacturing or infrastructure, like solar and LED companies, probably becuase that's what I'm in. But some folks obviously think the relentless march to Idiocracy (buying shit in the real world to better play games with your friends in the virtual world???) in this country will be quite profitable, and they may be right.

Re:Though High, Not Even Close to LinkedIn Hype (1)

lotho brandybuck (720697) | more than 2 years ago | (#36638528)

From the Wall Street Journal [wsj.com] last two lines of the article: "In February, Zynga reportedly raised around $500 million from a group of investors at a valuation as high as $10 billion. The company is expected to go public with a valuation of up to $20 billion."

Re:Though High, Not Even Close to LinkedIn Hype (1)

mcavic (2007672) | more than 2 years ago | (#36638894)

if they're "raising" 1B ... Does anybody know what the estimated market cap will be?

$1 billion, by definition, right? At least until the trading begins.

Re:Though High, Not Even Close to LinkedIn Hype (0)

Anonymous Coward | more than 2 years ago | (#36639398)

no, they are planning on selling $1 billion worth of shares, they are NOT selling ALL of the shares
or the whole company outright. so if they are selling 10% of the shares for $1B the cap would be $10B

Re:Though High, Not Even Close to LinkedIn Hype (1)

booch (4157) | more than 2 years ago | (#36643638)

if they're "raising" 1B ... Does anybody know what the estimated market cap will be?

$1 billion, by definition, right? At least until the trading begins.

Bzzt - Wrong!

If they're selling 10% of the company for $1 billion, then the valuation will be $10 billion. They're not selling off 100% of the company to raise the capital.

Re:Though High, Not Even Close to LinkedIn Hype (1)

protektor (63514) | more than 2 years ago | (#36695538)

The reality is most IPOs have very little to do with reality and a lot more to do with what the big investors and money guys think they can do to a stock to scam as much profit as they can in the frenzy of the first day of trading. Most of these guys get preferred share blocks from the guys setting up the IPOs so they can wait for the right time and then massively dump their shares at the peak and laugh all the way to the bank as the stock nose dives.

You want to know what kind of power these type of players have. Take a look at George Soros. He's the guy who is known as "the Man Who Broke the Bank of England". He caused a currency drop on the UK pound and kept saying it should be devalued and so he made it happen and dumped tons of UK pounds on the market and broke the Bank of England. He reportedly made $1 Billion off the deal, but some think it was far more than that. He is the kind of guy who actually screws with the markets and makes them jump or fall on his command. You should read his book and see his comments about how he claims he can break any country he wants and has done it in the past. These are the scary guys who snap their fingers and markets fall. These are the type of guys who make the killing off the IPOs.

George Soros' books [amazon.com]

Re:Though High, Not Even Close to LinkedIn Hype (3, Insightful)

Yakasha (42321) | more than 2 years ago | (#36637230)

I think the recent MySpace sale has shown that a company that makes games (though shaky) is nowhere near as volatiles as a company that relies upon its social network to fill its coffers.

A company that relies on the sales of games that rely on somebody else's social network is more stable?

I think if Zynga can separate themselves from their Facebook/Social Media reliance and their own past they'll have a chance of lasting 10+ years.

Linked-in has carved their niche as the professionals place to network. They may not have the seemingly limitless growth potential that a generic place like Facebook has, but I think their market is less likely to jump ship with the next new thing that comes out, and they have a well-defined target audience that they know for a fact has money.

The people that spiked Linked-In's IPO are the same people that spiked the first internet bubble and are the same ones that will spike Zynga's IPO, and will be the same ones jumping out windows when this bubble bursts: the ones that "play" the market.

Investing is not a game. It is just numbers and educated guesses based on those numbers. The people inflating these IPOs are just like the people in Vegas betting on black cause its "hot". To the pros they're either an annoying inconvenience... or a mark.

Re:Though High, Not Even Close to LinkedIn Hype (1)

protektor (63514) | more than 2 years ago | (#36694702)

Investing has almost nothing to do with numbers, and everything in the world to do with mass psychology. The markets move up and down based on what people think not usually because of some concrete fact. Is there any proof that Zynga is worth $100 Billion or whatever? No. People feel like they will last and make them money but Zynga could end up next year being the victim of the latest fad and everyone jumps ship to that instead. Hell people don't even invest anymore based on dividends or P/E, they invest based on what they think/hope someone else will pay for the stock in a given period of time.

People who try and figure out formulas for the stock market always fail. The reason is the stock market isn't driven by numbers, it's driven by people's emotions. Now if you could come up with some mass psychology method for predicting people's behaviors then you could probably clean up in the stock market.

Re:Though High, Not Even Close to LinkedIn Hype (3, Insightful)

MBraynard (653724) | more than 2 years ago | (#36637448)

Your math would only be correct if it was issuing 100% of it's equity. It's probably issuing a tiny fraction.

Re:Though High, Not Even Close to LinkedIn Hype (0)

Anonymous Coward | more than 2 years ago | (#36637518)

when you spend all day reloading slashdot so you can try to get a first post, checking your facts isn't a high priority.

Re:Though High, Not Even Close to LinkedIn Hype (0)

Anonymous Coward | more than 2 years ago | (#36637864)

Your math would only be correct if it was issuing 100% of it's equity. It's probably issuing a tiny fraction.

Uh, that's the same math that they used on LinkedIn though ... why weren't people saying the same thing about LinkedIn issuing a tiny fraction of its equity?

Re:Though High, Not Even Close to LinkedIn Hype (1)

MBraynard (653724) | more than 2 years ago | (#36638504)

Because they don't understand finance. They probably can't even pronounce it correctly (it's 'fih', not 'fEYE', and the accent is on the second syllable.)

Re:Though High, Not Even Close to LinkedIn Hype (1)

adamchou (993073) | more than 2 years ago | (#36638620)

i've never seen a company valued based on its revenue in my years of trading. however, i am still somewhat a novice at looking analyzing fundamentals so that might be the reason why. nevertheless, the more compelling number will be the ratio of earnings per share. that's a number that will really mean something. and based on linkedin's P/E, its currently at about 2,600. That is an astronomically asinine number as the S&P 500's average is ~25. Lets see what kind of numbers they post for earnings then we'll be able to see how overvalued this company might be. As a side note, I believe Linkedin's P/E is the highest in the history of the NYSE.

Re:Though High, Not Even Close to LinkedIn Hype (1)

protektor (63514) | more than 2 years ago | (#36694778)

You might want rethink that. Take a look at Microsoft stock about 15+ years ago. Microsoft was not giving out dividends to shareholders. The price of Microsoft stock was only based on what people thought they could sell it for to someone else. People were trading Microsoft stock based on emotions and that is fine as long as you realize that is what is going on. Was Microsoft successful? Oh yes, but that success did not translate in to anything for the shareholders. So it wasn't traded on the monetary value to the shareholders but rather emotions of what people thought it was worth and what they thought they could sell it for. That is fine as long as people realize that is what is going on.

Re:Though High, Not Even Close to LinkedIn Hype (1)

Tolkien (664315) | more than 2 years ago | (#36642452)

I think it's time for the public to make the methods of "innovation" Zynga uses resurface. Hopefully that should make their stock prices plummet.

Re:Though High, Not Even Close to LinkedIn Hype (1)

aeoo (568706) | more than 2 years ago | (#36704764)

Remember, some folks estimate that Farmville alone is now worth more than EA [slashdot.org].

I'm pretty sure this is simply the worth of all the outstanding shares added up. If I am correct, that's a worthless indicator. Try comparing revenue or profit instead of net worth. Stock prices are meaningless. If one company makes 1 bil in profit and another makes 1 cent in profit and the 1 cent company is hyped and has a 60 trillion net worth, what does that mean? It means the stock market is crazy. It doesn't mean the 1 cent company is actually better than 1 bil one.

B'Zynga (0)

Anonymous Coward | more than 2 years ago | (#36636858)

Or, would it be BaZynga?

Chavez has cancerous tumor removed (-1)

Anonymous Coward | more than 2 years ago | (#36636862)

Venezuelan President Hugo Chavez said that doctors in Cuba had removed a cancerous tumor from his body. His speech was broadcast on state-run VTV.

Re:Chavez has cancerous tumor removed (-1, Offtopic)

Anonymous Coward | more than 2 years ago | (#36637042)

That wasn't a tumor on his asshole, it was Barack Obama.

New bubble? (1)

betterunixthanunix (980855) | more than 2 years ago | (#36636866)

Didn't we learn our lesson the last time? Are we really going to go down this road again?

Re:New bubble? (1)

Overzeetop (214511) | more than 2 years ago | (#36636884)

The bubble was only bad for most people. If you cashed out at the top, it was awesome. Sadly, I was mostly in the former group.

Re:New bubble? (1)

DigiShaman (671371) | more than 2 years ago | (#36637264)

This! That's the key. They wanna play games, let's play games. I for one welcome the Tech Bubble II. This time, I know how the game's played =) Cash me in, then cash me out.

Re:New bubble? (2)

dgatwood (11270) | more than 2 years ago | (#36638010)

I'd imagine a lot of Zynga employees will do just that, if they're smart. Then, since they won't need to put up with being massively overworked and severely underpaid [glassdoor.com] anymore, they'll flee the sinking ship in droves.

Translation: take your profits after a single-digit number of weeks, and then walk away.

Re:New bubble? (1)

protektor (63514) | more than 2 years ago | (#36694852)

Nice idea but there are usually limits put in place to prevent employees/insiders from doing this exact thing. I have been involved in a couple of IPOs from the inside and each time I could not sell the shares until 3 months after the IPO, and usually by then the hype and rollercoaster has died down. If there is a massive sell off by employees it is going to cause a dive in the stock and investors might wonder what the employees know that they don't since they are jumping ship immediately rather than letting it slowly rise even more in the future.

Re:New bubble? (1)

Mashiki (184564) | more than 2 years ago | (#36636912)

Obviously not.

BRB I'm going to launch a new company that analyzes tech companies who are about to launch a new IPO for high sums. I'm sure my new business will be worth at least a trillion dollars, oh and we have sharks...with laser beams on their heads as accountants.

Re:New bubble? (0)

Anonymous Coward | more than 2 years ago | (#36637014)

Two questions:

1. Why would a shark need an accoutant?
2. Does laser beam really perform well in that job?

Re:New bubble? (1)

Mashiki (184564) | more than 2 years ago | (#36637108)

Two questions:

1. Why would a shark need an accoutant?
2. Does laser beam really perform well in that job?

1: Shark Accountants, not need an accountant. Because a blood bath is a feeding frenzy!
2: Yes. All the better to terrorize you with, oh and keep the blood on the inside!

Re:New bubble? (1)

Anonymous Coward | more than 2 years ago | (#36637124)

I have yet to meet a shark whose accounting needs cannot be met fully by a laser beam.

Re:New bubble? (2)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#36636916)

Skimming the real money off the undulating torrents of pretend money is one of America's most influential industries.

Now that the adventure in real-estate has largely dried up, a new fad is needed.

Re:New bubble? (2)

PickyH3D (680158) | more than 2 years ago | (#36637178)

Except it's not even remotely new. Stock market bubbles have come and gone on a scarily common cycle.

How these idiots keep doing it is beyond me.

Re:New bubble? (1)

Ihmhi (1206036) | more than 2 years ago | (#36639314)

It's quite easy to see. They rape and pillage for all the money they can, and then things go tits up. The economy is in the shitter... except it doesn't affect them because they're millionaires or billionaires. They spend the downtime thinking up a new way to increase their money.

Short that stock (2)

spire3661 (1038968) | more than 2 years ago | (#36636886)

as fast as humanly possible.

Re:Short that stock (1)

Santzes (756183) | more than 2 years ago | (#36637782)

Never bet against human stupidity.

Re:Short that stock (1)

r_jensen11 (598210) | more than 2 years ago | (#36651298)

Never bet against human stupidity.

Largely because you may not have enough cash to wait it out. Many fund managers were shorting companies like Pets.com back during '98-00, but had to take substantial losses because they didn't have enough collateral to wait until the share prices reversed and headed toward $0.

It doesn't really matter (3, Insightful)

DogDude (805747) | more than 2 years ago | (#36636948)

It doesn't really matter what the company's value is. Stock price is completely and totally unconnected to any kind of company value or profit. Stock price is purely a measure of how much people are willing to pay for a "share" of a company. It used to be that people bought stock because they pay dividends, but now few stocks pay any dividend, and people are simply gambling that one day in the future people will pay more for the "share" than they are willing to pay now. All of the analysis into a stock's "value" are about as useful as "analyzing" numbers on a roulette wheel.

Re:It doesn't really matter (0)

Anonymous Coward | more than 2 years ago | (#36637144)

Any mature company which doesn't pay a dividend or at least buy back stock, and has no intention of doing so, is not a real public company. It is obviously not being run in the interests of it's shareholders, but in the interest of its executives.

If you avoid paper-value-only stocks and stay the heck out of any "hot" market segment then value analysis still drives stock prices quite heavily.

Re:It doesn't really matter (0)

Anonymous Coward | more than 2 years ago | (#36637342)

People do retire. When you get to age 60, 65, 75, 80, 80, 100, whatever, do you really want to keep working as a walmart greeter?

If I bought stock at 5$ and sell it at 25$ by the time I retire, I've still made 5 times my initial investment, at that point the taxes are paid on the capital gains which is whatever the tax rate is.
Now compare that 5$ in a bank account. At the current 1.35% interest rate, that's 6.75 cents per year non-compounded which would take 296 years. Compounded, only 120 years, and I still have to pay the taxes on the interest.

See the problem? That 120 years... with oh let's say you bought JPM in Mar 28 1980 when it was around 5$. It's currently worth 41.58. It's also been split 3:2, 2:1,3:2 and has been paying dividends. Ignoring the dividends for a moment, if you had 2 shares in 1980 you'd have 9 shares now. So 10$ is 369$.

Re:It doesn't really matter (2)

O('_')O_Bush (1162487) | more than 2 years ago | (#36637984)

That has no relation at all to what the person you are replying to says.

Any monkey understands compound growth and that stocks tend to grow faster than bank accounts. Nothing to do with how stocks are valued.

Re:It doesn't really matter (1)

whiteboy86 (1930018) | more than 2 years ago | (#36637752)

Stock price is totally connected to perceived value, which of course is a mixed bag of things..

Re:It doesn't really matter (1)

Americium (1343605) | more than 2 years ago | (#36638966)

Not really, most of the big software names have P/E ratios between 10 and 20:1, so it's VERY connected. It's a bet on what the future earnings will be. Take a look at LinkedIn, they are trading at a P/E ratio of over 2000:1 right now. So to keep their current stock price, they need to grow their profits by 100 fold.

Re:It doesn't really matter (1)

protektor (63514) | more than 2 years ago | (#36694946)

If it so connected to numbers why do none of the formulas for stock picking ever work. It's all voodoo and a lot more mass psychology than anything else. Remember the monkey that one of the big papers had picking stocks and it out performed any of the big investors. Welcome to mass psychology that has nothing to do with actual numbers of the company but rather what people feel and think. There have been company boycotts that people thought would effect sales so the stock went down even though the sales numbers were actually rising. Once again an example of mass psychology rather than pure hard numbers. Individual people tend to be smart, but put them in a group and all of a sudden they loose about half their IQ since people in a group want to move with the group even if it makes no sense to do that action. It's mass psychology.

Re:It doesn't really matter (0)

Anonymous Coward | more than 2 years ago | (#36639480)

Stock price is completely and totally unconnected to any kind of company value or profit. Stock price is purely a measure of how much people are willing to pay for a "share" of a company.

Don't be ridiculous. Stock shares represent real ownership in a company - if you own 50.1% of the shares in a company you control it (and its cash/assets/business value). Thus, the price of stock shares of a company will relate to the value of the company, because if the share price goes below the value of controlling the company, it will get bought out (and rationally so).

All aboard! (3, Interesting)

roman_mir (125474) | more than 2 years ago | (#36636954)

All aboard! The gravy train is leaving this station.

This is another bubble, which is being inflated now, and since people have short memories and no understanding of economics they are jumping right on it.

These new software service/product companies are going IPO now, while things are still moving. Wall Street wants to push these companies right now, one after the other, feeding the frenzy, as they know it won't last.

These insane valuations that Linked In and all these other new IPOs are going at are forward looking, they are assuming 100% profitability at current level. They have no space to go but DOWN.

Don't believe the hype.

Re:All aboard! (0)

Anonymous Coward | more than 2 years ago | (#36637244)

Why can't Linked In become the new Monster, Dice, etc? I would say that it's growth could go up, but we'll see.

Re:All aboard! (2)

roman_mir (125474) | more than 2 years ago | (#36637302)

Linked In? You must be joking. Their valuation is 36 times their revenue I believe, isn't it right?

Do you know that it's very easy to have huge revenue but have no profit and then come up for an IPO nowadays if you are one of these newfangled 'Web2.0' companies?

Revenue is irrelevant. I can have all revenue all day, if I just buy a product and sell it cheaper than anybody else, I'll be bleeding red ink, but I can have more revenue than any competitor.

Then, based on today's 'reality', I can go for an IPO with a huge valuation based on nothing but revenue. Then I cash out and go drink moheetas on a white yacht somewhere in the Caribbean, and leave the schmucks holding the worthless coupons.

Re:All aboard! (0)

Anonymous Coward | more than 2 years ago | (#36637650)

can go for an IPO with a huge valuation based on nothing but revenue. Then I cash out and go drink moheetas on a white yacht somewhere in the Caribbean, and leave the schmucks holding the worthless coupons.

What keeps you here, then, schmuck?

Re:All aboard! (1)

roman_mir (125474) | more than 2 years ago | (#36637670)

What keeps you here, then, schmuck?

- I actually work on a business that is useful for the customers and that I like. It may make me a schmuck, not to be a simple thief, but at least it doesn't make me a turd, the kind that you seem to be.

Re:All aboard! (0)

Anonymous Coward | more than 2 years ago | (#36637308)

Does anyone actually read anymore?!??! Zynga had a profit of $11.8 million in the first quarter of this year. That's not a projection. They made almost $100 million in PROFIT last year. They pull in nearly $100 million a month in REVENUE.

Re:All aboard! (0)

roman_mir (125474) | more than 2 years ago | (#36637396)

This game company sells to Facebook, right? With the low barrier to entry, these companies really have nothing to offer beyond their current windfall. Facebook is a fad, just like Myspace was, and these so called 'social games' are a fad as well. The 1 billion dollar IPO is forward looking, it accounts for near 100% profitability, it basically means that the market cap of 1billion is true only if the company has the same revenue and profit from now on, which is unlikely.

It's unlikely, not impossible, but highly unlikely, especially given how they all of a sudden moved from negative 50 something million in 2009 to positive 90 million in 2010.

From negative 50, to positive 90 in a year, and then going IPO based on unlikely projections?

Sure, you can go ahead and buy the stock, but I wouldn't. Sure, maybe it's a profitable company, but would I pay the stock prices that are calculated based on this inflated market cap? Why? Well, if I turn masochistic I might, but for no other reason than that.

Bingo. (1)

decora (1710862) | more than 2 years ago | (#36639262)

great point about 'projected profits'. it is exactly the same sort of thing that JP Morgan, Goldman, Merrill / BoA, and Morgan Stanley pulled in the CDO business....

those are the same companies bookrunning this IPO.

Lehman, Merril, Bear Stearns (1)

decora (1710862) | more than 2 years ago | (#36639250)

also all had excellent credit ratings and good numbers.

right before they didn't.

----

look at who is bookrunning the zynga deal. the same companies who bookran the CDO business. the same companies who bookran the subprime mortgage business.

its probably even the same people inside those same companies. the CDO market dried up - move those people to the IPO business! it worked in 2000, by 2011 everyone will have forgotten and a whole new wave of suckers is born.

Re:All aboard! (1)

city (1189205) | more than 2 years ago | (#36637388)

In other news, LNKD up 5% today... Don't kill the messager please.

Re:All aboard! (1)

roman_mir (125474) | more than 2 years ago | (#36637420)

So? They were 122.70 once. So anybody who entered on those terms lost quite a bit of money already.

Re:All aboard! (0)

Anonymous Coward | more than 2 years ago | (#36637820)

Yes briefly on opening day. It closed that day at $90. They were also $60 9 days ago. Tech IPOs are volatile. I'm not saying I would buy it but it is up from the IPO.

Re:All aboard! (1)

protektor (63514) | more than 2 years ago | (#36695010)

and what exactly has LNKD done today to warrant a 5% jump in stock price? The answer is nothing. It's all mass psychology of what people think might happen and what people think someone else might pay for the stock in the future. People in groups want to move with the groups no matter the cost. So once you step outside that and realize what is going on and aren't influenced by the group then you can make better decision about what the masses are thinking and feeling and can make money based on people's behaviors rather than how the company is actually doing.

economists cant understand economics (1)

decora (1710862) | more than 2 years ago | (#36639236)

as the book EConned by Yves Smith and the film Inside Job by Ferguson have demonstrated, the 'study of ecnomics' is somewhat corrupt and lacking in the rigor that one might find, say, in the field of, say, art history.

i.e. you cannot write an article about an 11th century cathedral and claim that it proves that christianity is the best religion. but that is the sort of thing going on all the time in economics journals.

why? the professors are payed off by business interests to push this crap, so that politicians and other business people will buy into scams. Inside job has the perfect example: payed-for 'academic' studies of the Icelandic banks written to convince policy makers in Iceland and elsewhere to accept the 'revolution' of privatization circa the turn of the 21st century. result - iceland was technically bankrupty and the UK used anti-terrorism laws to seize icelandic property.

it is not just that the average person is stupid.

its that the average person is being lied to by a well funded, well oiled PR machine, masquerading as a science.

Re:economists cant understand economics (1)

roman_mir (125474) | more than 2 years ago | (#36640002)

as the book EConned by Yves Smith and the film Inside Job by Ferguson have demonstrated, the 'study of ecnomics' is somewhat corrupt and lacking in the rigor that one might find, say, in the field of, say, art history.

- yes, and more than that.

The modern era 'economists', are loudspeakers for government propaganda, providing an excuse for the very thing that government wants to do anyway - counterfeit money.

Here is a good primer on the difference between a mainstream modern "economist", and somebody who understand economics. [youtube.com]

Government sanctioned "economist" talks about fairness and feelings.

The guy who understands economics talks about the risk of moral hazard created by the government action.

Guess which one is 'mainstream' and which one is 'fringe'.

Re:economists cant understand economics (0)

Anonymous Coward | more than 2 years ago | (#36640050)

> i.e. you cannot write an article about an 11th century cathedral and claim
> that it proves that christianity is the best religion

You used "i.e." when "e.g." was more appropriate, unless that was the sole example that can ever be given.

Too bad its products are shit (0)

Anonymous Coward | more than 2 years ago | (#36637120)

http://games.slashdot.org/story/11/07/01/0533250/Current-Social-Games-Arent-Fun-Says-MUD-Co-Creator

Party like it's 1999 (1)

Syncerus (213609) | more than 2 years ago | (#36637128)

As a survivor of the first bubble, followed by the SoCal Real Estate bubble, all I can say is that my BS detector is making loud whooping noises. A company is worth a a reasonable multiple of its earnings; nothing more. And reasonable doesn't mean 650x.

What's Zynga? And why is it worth $1 Billion? (1)

jwijnands (2313022) | more than 2 years ago | (#36637184)

In a day and age when a world famous camera label goes for a mere $125 million and a Zynga goes for a Billion, something is wrong.

Re:What's Zynga? And why is it worth $1 Billion? (1)

protektor (63514) | more than 2 years ago | (#36695112)

Welcome to the modern stock market. It isn't based on returns to the stock holders, most companies don't even pay dividends, but rather mass psychology of what people think and feel about the company and what they hope someone else will pay for the stock in the future.

If I could raise millions or better yet billions based on selling a stock that never pays a dime to the shareholders I would do it in a New York second. I also know that the average investor is actually going to have zero say how the company is run even if I sell off 60% of the company. I only have to wine and dine a few mutal fund and hedge fund managers to keep the stockholder from going against me. Large blocks of company stocks are mostly actually controlled by a few select people in charge of investing. There are about 10-20 of these people in reality making the huge decisions. You get them in your pocket and you can do anything you want with your company that you only own 20%.

Rhode Island (2)

michaelmalak (91262) | more than 2 years ago | (#36637212)

It's approximately the agricultural GDP of Rhode Island.

Re:Rhode Island (0)

Anonymous Coward | more than 2 years ago | (#36637694)

And RI isn't even an agricultural state. (In comparison: the state budget just passed. It involved a lot of cuts, to remove a deficit. It's still $7.7 billion.)

Re:Rhode Island (0)

Anonymous Coward | more than 2 years ago | (#36637842)

Dang. That one cow is worth a fortune!

I give you $50 for it (0)

Anonymous Coward | more than 2 years ago | (#36637454)

That is all that they are worth!

WTF is Zynga? (0)

Anonymous Coward | more than 2 years ago | (#36637624)

I've never heard of it.

Of course I completely avoid all the other ridiculous crap everyone else seems to love, like facespace, jitter and LinkedIt.

Fixed (1)

dthx1138 (833363) | more than 2 years ago | (#36637834)

"Farmville developer Zynga finally filed its IPO paperwork today, as it wants to raise $1 billion..."

There, now everybody who isn't familiar knows wtf Zynga is, and can hopefully avoid wasting their time on this blurb, which was so thorough there was no room for even a Wiki link.

I don't know why I am expecting any standards of halfway decent journalism at Slashdot, but I am nonetheless, so hear my bitching.

Re:Fixed (1)

Bing Tsher E (943915) | more than 2 years ago | (#36639474)

Don't say that. It embarasses the developers at Zynga to admit that the only thing they've come up with that has gone profitable is a Farm game for middle aged women.

They've tried so hard to 'push' their game development toward the metrosexual crowd that they think of themselves as belonging to. Every time you look, there's another fucking disco cow or Lady Gaga themed promotion going on there. Yoville is where they wanna live and it's a flop.

It must be really depressing to be a hip young developer, and know that the only customer base that gives a shit about your work is those middle aged hick women. It shows badly in the developments in the game. It's shrieking obvious the Farmville developers hate and despise their players.

Morgan Stanley, BoA Merril, Goldman, Barclays, JPM (1)

decora (1710862) | more than 2 years ago | (#36639216)

Morgan Stanley -

rescued at the last minute by a japanese bank. was a hairs breadth from becoming another Lehman level bankruptcy

BoA Merrill -

a shotgun wedding, after Merrill drove itself over the CDO cliff by firing the risk managers for a few short years of record profits. they fire the CEO, then hire a new CEO who does a million-dollar refit of his office, then dithers around a whole year before doing the exact same thing the fired CEO wanted to do - sell the company to Bank of America (except this time at something like 1/4 the price).

Goldman Sachs -

Not alone, but a very prominent company that sold bad products to some customers, so that other customers could place bets (credit default swaps) that the products you just sold to the first customers would lose their value. also involved in the Food bubble through Goldman Sachs Commodity Index Fund. also spawned people like Robert Rubin & others who helped stop Brooksley Born from regulating CDS and CDOs back in the late 90s when she tried to.

Barclays -

CDO business.

JPM -

We just found out recently they were behaving almost exactly like Goldman Sachs in some of their CDO dealings - the hedge fund was not John Paulson though, it was Magnetar Capital.

----

These are the people 'bookrunning' this Zynga IPO. These are the people who will take millions of dollars that investors have put into this IPO, and they will take those millions as profit for 'arranging the deal'. These are the people who will carve off special chunks of the IPO stock and dole it out as pseudo-political favors to various hedge fund managers ( i recommend Trading with the Enemy and Running Money for details about how this works).

This is what this new 'industry' is made of. These are the people in charge. These are the men behind the curtain, turning the gears of the media so that big stories about the big success of big innovative companies will drive buzz and suckers to come to the circus and pay their three bucks on a horse in the sideshow.

This is what our 'economy' has become.

Re:Morgan Stanley, BoA Merril, Goldman, Barclays, (1)

protektor (63514) | more than 2 years ago | (#36695228)

I wish I could mod you up because you are exactly correct. There are about 10-20 people who control most of the massive shifts in the stock market and they are hedge fund and mutual fund managers. They can absolutely destroy companies because of the amount of money and investors they represent and control. The average Joe off the street doesn't stand a chance against these guys. Your best bet is to try and ride their coat tails and hope you don't get thrown off and end up on the floor broke. Not to mention that the public doesn't invest on numbers they invest based on what they feel and think of a company and what they hope and pray someone else will pay for the shares in the future given so few companies actually give out dividends. It's mass psychology at it's finest.

Search for the biggest Rip-Off (0)

Nom du Keyboard (633989) | more than 2 years ago | (#36639638)

So who is going to be the biggest cash-grab fraud this year? Groupon or Zynga? Let me know when you're holding the empty bag and we'll party like it's 1999.

Isn't the web biz dangerous because of Government? (1)

VortexCortex (1117377) | more than 2 years ago | (#36640614)

That is... What I mean to say is that the Government can and does shut down domains; Sometimes without much research into the repercussions. They usually plaster up a big scary splash page "Child Pornography and/or Copyright violation is Illegal. Your IP is now logged. Criminals will be prosecuted within the full extent of the law." that ensures no visitors will be coming back if they see it.

Perhaps I'm concerned over nothing; Maybe there's a commercial advisory body that's knowledgeable about the web and oversees the take-downs to ensure no big guys accidentally get snared...

Re:Isn't the web biz dangerous because of Governme (1)

protektor (63514) | more than 2 years ago | (#36695272)

If you believe their is reasonable oversight for seizing domains, I have ocean front property in Nevada I want to sell you. The big guys won't get caught in the drag net because they have lobbyists who are paid to pay off...excuse me give political contributions to the people in Washington who matter.

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