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Facebook Reportedly Filing $5 Billion IPO Today

samzenpus posted more than 2 years ago | from the price-of-a-friends-list dept.

Businesses 268

hypnosec writes "Today is the day when Facebook may be submitting all required paperwork to regulators for its $5 billion initial public offering. According to the source close to the deal, Facebook has selected Morgan Stanley along with four others — Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Barclay's Capital to handle this IPO. Morgan Stanley will be taking "lead left" role in this supposedly biggest IPO from Silicon Valley. According to International Financing Review, the preliminary target of $5 billion will be increased by many folds in coming few months as a response to the demands of investors. Sources close to this matter disclosed that this might turn out to be defining moment for current web investments. The deal might rise to $10 billion which eventually will make Facebook a social networking empire valued between $75 billion to $100 billion. In fact, $75 billion is definitely an undervaluation compared to previous expectations."

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Well it's hot and techy, what could go wrong? (4, Funny)

elrous0 (869638) | more than 2 years ago | (#38894755)

Time to tap into the kids' college fund. They can thank me later.

Re:Well it's hot and techy, what could go wrong? (1)

stanlyb (1839382) | more than 2 years ago | (#38894829)

As we are thankful to the mess that the baby boomers left?

Re:Well it's hot and techy, what could go wrong? (0)

Anonymous Coward | more than 2 years ago | (#38894955)

As we are thankful to the mess that the baby boomers left?

What are you talking about? Baby boobmers are now THE generation. What is the mean age group of the senators?? And who sets policy?

Re:Well it's hot and techy, what could go wrong? (-1)

Anonymous Coward | more than 2 years ago | (#38894877)

I'm definitely tapping the kids' college fund. And I'm going to mortgage my house and sell my kidney to get those stocks. This is a chance in a lifetime guys. Buy, buy, buy!!!

Re:Well it's hot and techy, what could go wrong? (3, Insightful)

alen (225700) | more than 2 years ago | (#38895023)

from the leaked financials last year facebook is making money. I think it was $250 million or so NET profit on revenues of $1.5 BILLION.

for a lot of people facebook is the new contact list and has replaced email for most communication. my gmail is my spam/marketing honeypot these days and social networks are used for communication.

but then again geeks and techies are usually the last ones to GET trends like this.

Re:Well it's hot and techy, what could go wrong? (5, Funny)

Anonymous Coward | more than 2 years ago | (#38895085)

That's only a P/E of 400. Seems reasonable.

Re:Well it's hot and techy, what could go wrong? (1, Offtopic)

ceoyoyo (59147) | more than 2 years ago | (#38895177)

Too bad you posted as AC. Mod this up. It's even funny!

Re:Well it's hot and techy, what could go wrong? (2)

Anonymous Coward | more than 2 years ago | (#38895089)

Facebook was cool 6 years ago (no really: it was actually really exciting). Then we got the "apps" nonsense. Then Grandma got an account. And now Coca-Cola (tm) has "fans". WTF? It's not cool anymore. Geeks already got it, and got out.

Re:Well it's hot and techy, what could go wrong? (1)

alen (225700) | more than 2 years ago | (#38895139)

yes, they went to google plus where you are supposed to "circle" bloggers and other internet superstars and comment on every post about how cool they are. and you are supposed to +1 crap around the internet to help google battle evil SEOs

Re:Well it's hot and techy, what could go wrong? (3, Insightful)

iggymanz (596061) | more than 2 years ago | (#38895245)

the geeks I know with more than half a brain don't do social networking sites at all.

Re:Well it's hot and techy, what could go wrong? (1)

Tsingi (870990) | more than 2 years ago | (#38895291)

IRC

Re:Well it's hot and techy, what could go wrong? (2)

zill (1690130) | more than 2 years ago | (#38895377)

He said "sites", as in "websites", which all rely on the HTTP(S) protocol. IRC is a completely different protocol.

Re:Well it's hot and techy, what could go wrong? (0)

Anonymous Coward | more than 2 years ago | (#38895451)

Well, how the fuck else am I gonna get my furry pr0n? They shut down megaupload!! :(

Re:Well it's hot and techy, what could go wrong? (1)

iggymanz (596061) | more than 2 years ago | (#38895589)

yes we do that, but that is not a web site

Re:Well it's hot and techy, what could go wrong? (0)

Anonymous Coward | more than 2 years ago | (#38895295)

Not really... social networking is kind of passe now. Twitter caused the Arab Spring (which is awesome), but now that they care about money and are therefore censoring the people who made the service cool, we can expect that to become another version of Cosmo magazine or television. We're in a lull between innovations right now. That's why laptops with their keyboards amputated and their remaining limbs shackled can make so much money right now (no offense to the amazing marketing at firms that can cause such fervor over them; that is genius).

Re:Well it's hot and techy, what could go wrong? (0)

Anonymous Coward | more than 2 years ago | (#38895337)

...but then again geeks and techies are usually the last ones to GET trends like this.

Yes, and for good reason, considering Facebooks privacy policy and settings that changed with the wind for quite some time, and of course could change again in an hour. There's nothing "trendy" about identity theft, other than the fact that it is on the rise due to ignorance and stupidity when posting ones entire life online, which of course Facebook is more than happy to oblige with 43,972 sharing "tools".

Re:Well it's hot and techy, what could go wrong? (2, Insightful)

eln (21727) | more than 2 years ago | (#38895399)

MySpace and Friendster would like a word with you.

Obviously Facebook has been far more successful than any of its predecessors, but it's still an Internet property that could be replaced and fall virtually overnight at any moment. It may be a good buy now, but if you're caught holding the bag at the wrong time you could easily lose your shirt.

The best prospect for Facebook investors remains for it to be bought out by some large conglomerate so they can cash out before the bottom falls out. Young people are already abandoning it as they don't like hanging out where their parents and grandparents also hang out, and even some older people (not as many as Google had hoped) have likewise abandoned it for Google Plus. At some point, some other site will come along and eat Facebook's lunch, it's only a matter of time.

Re:Well it's hot and techy, what could go wrong? (4, Informative)

EdIII (1114411) | more than 2 years ago | (#38895441)

my gmail is my spam/marketing honeypot these days and social networks are used for communication........but then again geeks and techies are usually the last ones to GET trends like this.

LOL.

Uhhh, no. I "got" it. Then threw it back like the steaming turd that it was and still is.

I got a fake Facebook account some time ago to keep connected with younger relatives since it seemed the only way to get their attention was to play Mafia Wars or place a message sign on their farm in Farmville. Being a geek and techie, I saw Facebook for what it really was:

1) A huge personal data sink where I could put all of my information in one basket to be sold to the highest bidder, analyzed, and then acted upon with absolutely no benefit to me.
2) A marginally effective communication tool. Signal to noise ratio sucked, because much like Twitter, you had a constant stream of information that was barely useful, relevant or interesting. Especially, when there is a huge trend to manipulate you into posting other people's content on your wall for marketing purposes.
3) A gaming platform thinly disguised as a social networking platform where Facebook was constantly fighting to get a real piece of the financial action taking place. Starting their own credit system was basically a coup against Zynga which was valued in the billions initially because of revenue, most of which was illicitly gained through dirty tactics like premium charges on cell phones and other such instances of fraud. One of my younger relatives got hit with a $300 cell phone bill one month and honestly did not know the consequences of wanting some shiny that Zynga was offering.

So, No you are quite wrong. Most of us geeks and techies completely understand the trend that Facebook is. When we disagree, refuse to participate, and quite often make condescending and derisive comments towards other people that don't understand what we see you misinterpret that as us "not getting it".

What I wish is that other people would get what Facebook really is.

Your comment about SPAM and marketing is utter hilarity considering what the Facebook experience was like for me for the short while that I had it. Marketing overload anyone........ I had less SPAM and useless information coming into my junkmail folder at Yahoo, and that is saying something.

Anybody that puts money into this is a sucker. They are just making the payday dreams of the early and special investors come true and then you are holding the bag of shit. Same with Zynga.

Facebook might be hot for awhile, but the real trend is an evolving method of communication. To say that Facebook has the lock on that it is incredibly untrue. So many different projects in the works to satisfy this new kind of communication methodology, and with far better signal to noise ratios too.

At the end of the day Facebook has revenues tied to something that you would be foolish to call "stable". It's damn near whimsical over the long run.

Put your thinking cap on for a second. 75 billion. With a B. How can that possibly be true in reality? We are not talking Exxon here that makes something tangible that we are literally addicted too. This is based off credits and advertising revenue, both of which don't have a strong foundation, and can have a huge swing in profitability and volume.

Facebook and Zynga are incredibly over valued and over hyped. God help everyone who buys into it at the high range.

Re:Well it's hot and techy, what could go wrong? (1)

oztiks (921504) | more than 2 years ago | (#38895631)

Leaked financials ... Months before going IPO?

Let me see is facebook taking their marketing ploys from apple now?

Re:Well it's hot and techy, what could go wrong? (1)

timeOday (582209) | more than 2 years ago | (#38895359)

Being snarky doesn't make you right. I clearly remember sitting around with all the other grad students before the google IPO talking about how it surely couldn't go up from there. It did. I also don't remember thinking Michael Dell was an idiot when he suggested Apple should fold. It wasn't a big deal at the time because it was a reasonable suggestion at the time.

Watch it grow. (5, Insightful)

lorinc (2470890) | more than 2 years ago | (#38894775)

And then watch carefuly the bubble explode...

Re:Watch it grow. (5, Interesting)

vlm (69642) | more than 2 years ago | (#38894963)

You're assuming it'll grow. For a good laugh check out a recent zerohedge post (ZH is kind of the /. equivalent for the economic community?) showing graphs of share price as a % of IPO price for numerous recent (last year or so) tech stocks. All cratered below IPO price except for zynga which is somewhat volatile.

To have a bubble, first you have to have growth, and we're just not seeing that in recent tech IPOs.

Re:Watch it grow. (0)

Anonymous Coward | more than 2 years ago | (#38895117)

to be honest (i think their leadership is a bunch of creeps) but i think Zynga has more growth potential than facebook. and i believe they are already pulling in more revenue than facebook.

Re:Watch it grow. (1)

ceoyoyo (59147) | more than 2 years ago | (#38895191)

Credit card scams are a growth industry. Advertising on a specific site to fad-conscious teenagers is not.

Re:Watch it grow. (0)

Anonymous Coward | more than 2 years ago | (#38895481)

I'm not sure you can really call ZH the /. equivalent for the economic community. After all, at least we occasionally take our tinfoil hats off.

Re:Watch it grow. (1)

Marxist Hacker 42 (638312) | more than 2 years ago | (#38895213)

And in the mean time, watch facebook customer service get worse than it already was as the company refocuses on the 3 month bottom line instead of customers.

Re:Watch it grow. (2)

Hognoxious (631665) | more than 2 years ago | (#38895385)

Who do you think their customers are?

Hint: it's not the twats posting pictures of their butts with cocktail umbrellas sticking out.

Re:Watch it grow. (4, Insightful)

Kenja (541830) | more than 2 years ago | (#38895437)

I think the bubble will last up till the point where Facebook realizes they have to now disclose to share holders what they do to make money.

If you select everyone, (0)

Anonymous Coward | more than 2 years ago | (#38894811)

did you really select anyone?

Who's missing in that list of major investment banks?

can't wait (0)

Anonymous Coward | more than 2 years ago | (#38894825)

Can't wait for the experts at StockChase to give their opinions. On the other hand, the IPO will be long gone before "experts" start talking about it.

Re:can't wait (1)

iplayfast (166447) | more than 2 years ago | (#38894919)

The experts at www.StockChase.com are from a call in TV show, so they won't be talking about it unless someone calls in about it. But it might show up as a comment.

Countdown to the Social Media Bubble Pop (3, Funny)

GameboyRMH (1153867) | more than 2 years ago | (#38894833)

Everybody put on your silly glasses and get drunk!

Predictable (1)

Anonymous Coward | more than 2 years ago | (#38894843)

It's always comical to watch as business "insiders" plant information that exploit the gullability of the news media...the OP is basically providing free advertising for FB.

Shares (1)

Wowsers (1151731) | more than 2 years ago | (#38894845)

If you become a shareholder, will they use your name and address to spam you with adverts? ;)

Re:Shares (5, Funny)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#38894953)

No; but all the shareholders who aren't major investment banks get their dividends paid out in ZyngaCash and/or Facebook Points...

Re:Shares (2)

ae1294 (1547521) | more than 2 years ago | (#38894991)

No; but all the shareholders who aren't major investment banks get their dividends paid out in ZyngaCash and/or Facebook Points...

NO I DEMAND BITCOINS!

Re:Shares (2)

vlm (69642) | more than 2 years ago | (#38894997)

If you become a shareholder, will they use your name and address to spam you with adverts? ;)

I know you're trying to be funny, but yes, yes they will. For /.ers who don't own stocks, every year, heck some places every quarter you'll get a postal spam explaining how they love diversity and BS like that, its all balloons and unicorns at HQ, and they'd love it if you'd boost their price by purchasing more of their stock.

Some of the most hilariously over-PR'd work I've ever seen has been certain electric company annual reports. What an amazing steaming pile.

$225 (5, Insightful)

greap (1925302) | more than 2 years ago | (#38894859)

Based on that absurd valuation the average Facebook profile is worth $225.

Re:$225 (0)

Anonymous Coward | more than 2 years ago | (#38894901)

Count me in! I'll open a FB account again if they pay me $225 for it!

Re:$225 (1)

jcreus (2547928) | more than 2 years ago | (#38894977)

When you have, it'll be valued at $224.99, sorry. Anyway, if any profile is worth more than negative infinity, call me!

Re:$225 (1)

GameboyRMH (1153867) | more than 2 years ago | (#38894905)

...when in reality the average Facebook profile is worth -$8.

Re:$225 (0)

Anonymous Coward | more than 2 years ago | (#38895071)

Based on that absurd valuation the average Facebook profile is worth $225.

I already sold mine for $512. Should be a bull market.

Re:$225 (4, Funny)

Hognoxious (631665) | more than 2 years ago | (#38895445)

Should be a bull market.

I think you're about half right...

Re:$225 (1)

dgatwood (11270) | more than 2 years ago | (#38895189)

Assuming a couple of bucks CPM, the average Facebook user probably sees at least ten to fifteen ads per day, or about $7 to $11 per account per year. And that may be a low estimate. It's not really that much of a stretch to assume that Facebook will still be popular in twenty years.

And that's ignoring income from all other sources besides pure advertising.

Re:$225 (0)

Anonymous Coward | more than 2 years ago | (#38895401)

Homeland Security will make sure this stock stays inflated forever. It's a rock solid, long-term investment.

How do the investors get paid? (4, Interesting)

cptdondo (59460) | more than 2 years ago | (#38894899)

I'm having a hard time figuring out how the investors expect to get their money out....

Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

And how will it make the sort of money needed to pay the investors?

I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

Re:How do the investors get paid? (2, Informative)

Anonymous Coward | more than 2 years ago | (#38894979)

It's an IPO. That's kind of the point of it. It's where the company's owners make a killing off of all the suckers who think they can somehow get in on "The Next Big Thing(tm)".

Re:How do the investors get paid? (0)

Anonymous Coward | more than 2 years ago | (#38894989)

AND... I hope it goes the way of AOL and MySpace.

Nathan

captcha : Ideally

Re:How do the investors get paid? (1)

ackthpt (218170) | more than 2 years ago | (#38895067)

AND... I hope it goes the way of AOL and MySpace.

Nathan

captcha : Ideally

Probably will. I certainly haven't given them one red cent so far.

Re:How do the investors get paid? (1)

X0563511 (793323) | more than 2 years ago | (#38895439)

What about a blue cent? Or how about green? Mauve? Plaid!?

Re:How do the investors get paid? (1)

residieu (577863) | more than 2 years ago | (#38895003)

Not EVERYONE else. Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Barclay's Capital are all also going to make a bundle.

Re:How do the investors get paid? (0)

Anonymous Coward | more than 2 years ago | (#38895017)

They don't grow via "selling the product" of "Facebook", they grow through "selling the product" of whatever happens to be popular in their app store at the time. Six hundred million subscribers is nothing to scoff at; FB only has to gain from here on out (until the Next Big Thing causes them to lose subscribers in droves).

Re:How do the investors get paid? (5, Funny)

grub (11606) | more than 2 years ago | (#38895025)


Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

Farms. Lots and lots of farms.

Re:How do the investors get paid? (4, Informative)

CanHasDIY (1672858) | more than 2 years ago | (#38895033)

I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

Well, you see, according to the largest private bank in the world, Goldman Sachs, that's precisely how Wall Street is 'supposed' to work. [rollingstone.com]

Your logic and reasoning abilities have no place amongst the powers that be.

Re:How do the investors get paid? (1)

brainzach (2032950) | more than 2 years ago | (#38895065)

How do you get paid investing in a house? Investors get paid when they sell ownership of the stock to someone else.

Stocks represent real money making assets. The day to day trading is a suckers game, but if Facebook continues to make money long term, the intrinsic value of the company will rise and the stock will follow.

Re:How do the investors get paid? (1)

alen (225700) | more than 2 years ago | (#38895069)

facebook is already making a nice profit

the growth is not in users but marketing to users.
1. people buy crap that they see other people using. all the apps like foursquare are there to bombard you with ideas of where to shop
2. data. spending a million $$$ on TV ads for 18-49 age group is old school. 21st century is to target your ads to specific groups of people. facebook has the data to allow marketers to do that

the other day i installed the shopkick app on my iphone. it's kind of like foursquare. i linked it to my facebook and checked out some of the specials. TrU is running a special on lego star wars sets. and by coincidence my 4 year old has been on a lego star wars binge lately.

it's evil and dirty but it worked.

Re:How do the investors get paid? (1)

ackthpt (218170) | more than 2 years ago | (#38895075)

I'm having a hard time figuring out how the investors expect to get their money out....

Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

And how will it make the sort of money needed to pay the investors?

I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

It's worth all that because someone believes it is. When the faith dissapates there may be some frowns.

Re:How do the investors get paid? (2)

HornWumpus (783565) | more than 2 years ago | (#38895077)

Nobody is being forced to invest.

Fools and their money were lucky to get together in the first place.

That said: I don't understand how they are running this IPO. Don't they usually set an initial offering price? Are they trying to auction the initial shares? I'll start the bidding with a nickle for the lot.

Re:How do the investors get paid? (5, Insightful)

Lev13than (581686) | more than 2 years ago | (#38895407)

That said: I don't understand how they are running this IPO. Don't they usually set an initial offering price? Are they trying to auction the initial shares? I'll start the bidding with a nickle for the lot.

An IPO's price is set just before the shares hit the open market. The vast majority of a company's shares are either owned by current investors (employees, executives, angel funds etc...) or purchased by investment banks as part of the IPO (when all the shares are purchased in advance it's known as a bought deal). This gives the IPO company a guaranteed source of cash and simplifies the whole process. The investment banks then try to maximize their gain by selling their shares to their clients at a higher market price.

As an investor, you go to your bank and put in a request for X shares. You won't know the exact price until you buy, and your request may be fully/partially/not filled at all. Generally the pension funds get first crack (usually at a discount) and small investors are often left to fend for themselves.

By waiting until the last second to set the market rate the investment banks can gauge demand and maximize the revenue they get from selling their shares to their customers. Once the shares are distributed the stock starts to trade on the open market, and anyone can get in. However, strict rules block the vast majority of insiders from selling immediately so demand is heightened by the limited number of shares. That makes the price go up and everyone is supposed to be happy.

In case you missed it in the description above, the average investor is the mark and the company, the investment banks and then pension funds are in on the con.

(This is a bit of simplification but covers the gist of it)

Re:How do the investors get paid? (1)

clairity (853242) | more than 2 years ago | (#38895127)

the (preliminary) prospectus that they will file presumably today will tell you how they plan to make money. since you're not an insider, that prospectus is your best source of direct information from facebook, as they are otherwise not allowed to provide material information to the public during the quiet period. the prospectus has legal weight so it must be factual (though there's no requirement to be direct in what it is trying to tell you) and include material factors in valuing the investment.

Re:How do the investors get paid? (1)

lurker412 (706164) | more than 2 years ago | (#38895131)

And how will it make the sort of money needed to pay the investors?

Selling sock puppets, maybe?

Re:How do the investors get paid? (1)

TFAFalcon (1839122) | more than 2 years ago | (#38895145)

They sell the shares after a week, before the average sucker notices what's going on.

Isn't that the normal way to earn money from the stock market? Dividends are unlikely to even cover inflation.

Re:How do the investors get paid? (0)

Anonymous Coward | more than 2 years ago | (#38895153)

how can they grow with 10% of the world's population already there? I can think of only 2 things. #1. Everybody makes a second (third? fourth? sixteenth?) facebook account, so that they'll have "even more" data to sell. #2. They use the data to play matchmaker and connect up all the people for whom facebook is their only "real" human interaction, and introduce them to each other for some real human interaction, keeping the videos for their segue into "world's funniest videos". Bob Sagat need not apply.

Maths isn't your strong point, I take it. (1)

Hognoxious (631665) | more than 2 years ago | (#38895583)

how can they grow with 10% of the world's population already there?

The other 70%, you assclown.

Re:How do the investors get paid? (1)

elrous0 (869638) | more than 2 years ago | (#38895169)

Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

Three words: Remote African Villagers.

Re:How do the investors get paid? (1)

migla (1099771) | more than 2 years ago | (#38895173)

This is the ridiculously effective, self-informing privatized new STASI.

The investors will get money from payments by the worlds rich power-elites (the worlds poor power-elites can't afford it), requesting whatever information they find pertinent to their particular cause.

For now, it's mostly targeted marketing for corporations and the odd aiding in arrests here and there by goverments.

Soon it will be spiraling down into the corporate fascist dystopia, where the rulers of the world will use Facebook to find you and get you out of their way if their algorithms deam you are likely to be a nuisance in the future.

unless...

http://freedomboxfoundation.org/ [freedomboxfoundation.org]

Re:How do the investors get paid? (1)

niftydude (1745144) | more than 2 years ago | (#38895187)

Add to that question, what is the ipo actually for?

I haven't read the facebook prospectus, but usually an ipo is for a company to raise funds to implement some part of it's business plan.

Facebook already had it's infrastructure, it already has a large user base.

So what is the purpose of this 5-10 billion dollar ipo (other than for the current owners to cash out at the peak of the hype)? What does facebook need to do over the next couple of years that requires such a massive capital injection???

To cash out (1)

alexander_686 (957440) | more than 2 years ago | (#38895491)

Assuming Facebook does not need the money to expand, the money raised will go to 1.cCash to Facebook for a rainy day, future acquisitions, etc. and 2. The current owners (cash out).

I am assuming that Facebook is going public not because it wants to, but because it has to. Once a company has more than 25 owners / partners it gets tricky. Owners are leaving and want to cash out, new employees want to buy in and have an actually ownership stake in what they are doing, etc.

I am going to assume this is going to be very much like the Google IPO. They had more than 250 owners so they had to do most of the paperwork / accounting that goes with a public company. They had a lot of people who wanted to cash out. Etc.

Re:How do the investors get paid? (1)

vlm (69642) | more than 2 years ago | (#38895227)

I'm having a hard time figuring out how the investors expect to get their money out....

Are they selling enough shares to be theoretically bought out?

I'm guessing no, $5B is not enough to be purchased.

Most likely the hope is a "real" company, perhaps AT&T or some place like that, will purchase then for X*1.3 per share where X is the current price.

Now, who would want to buy FB... A major TV network trying to be relevant in society again? Merge with clearchannel to compete with the ITMS and music.google.com?

There's only a half dozen megacorps that control all you see and hear in mass media, so there really are not many possible purchasers, assuming we're about to see Disney/ABC/Facebook merging together.

The other option is going the other direction. OK FB is useless. But on the way down they could trade their worthless stock to purchase a real company with real income producing assets; perhaps a taco stand or something. Then once the original assets are worthless, they'd still own stock in something at least minimally diversified and potentially profitable. So they might go on a buying binge purchasing small semi-related companies in exchange for FB stock. What if they ended up owning most of the small PR advertising firms? Hmm... What if they bought Zynga in a share transaction (like here's 2 shares of FB for every existing share of Zynga, tada, now we own Zynga)

Re:How do the investors get paid? (3, Insightful)

ceoyoyo (59147) | more than 2 years ago | (#38895229)

Well, here's how it works:

1. You start up a company (or buy into a private stock offering)
2. Build it into something that looks reasonably valuable
3. Hype it to death
4. Do an IPO.
5. Profit!

I'm sure Facebook's (current) shareholders will come out of this very nicely.

Re:How do the investors get paid? (1)

scottbomb (1290580) | more than 2 years ago | (#38895259)

An advertising medium that reaches 10% of the world's population? (People who have money, mind you. At least enough to connect to the internet). I can't think of any other company (except Google) that has that kind of reach. I believe their IPO was $75/share.

Re:How do the investors get paid? (0)

Anonymous Coward | more than 2 years ago | (#38895383)

Wall Street probably approached Facebook. Not the other way around. This will probably be a $500,000,000 payday for Wall Street. Wall Street doesn't give a crap about their customers (those filing IPOs). It's not how they make money. They make money simply by getting the IPOs to actually occur.

The filing is supposed to state what the money will be used for. I have to admit. If it sounds good I might go after a few shares because I think Lemmings will push the share price up.

The growth model doesn't have to be social media. Google does more than search after all. I was pondering the idea that they could enter the smart phone arena. HTML 5 has the potential to make native apps a thing of the past.

Re:How do the investors get paid? (5, Interesting)

stanjo74 (922718) | more than 2 years ago | (#38895483)

FB is the One Entity that knows about everything that happens in peoples lives. FB can do a lot more with the type of information they have than Google. I'm not saying it's moral, but nothing can stop FB from using the information any way they can make money, especially with new ownership (after the IPO).

Examples:

- Political parties spent $120+ on a vote last elections. How much would a political party pay FB to know the names and contact info of undecided voters or voters who seem to be able to influence others?

- Your dishwasher just broke, you complain about it on FB. How much Sears or BestBuy would pay to be notified this same instance about your misfortune?

- You buy a vacation with Travel Agent 1, go there to find out the hotel is a dump, you bitch about t on FB. How much would TA2 pay to know about this and contact you with an alternative offer?

The possibilities are endless, especially for the new owners with zero moral standards like Goldman Sachs and the likes. The growth will not come from more subscribers, but with ever increasing ways to analyze the information flow.

Bank of America Merrill Lynch, Goldman Sachs .... (2, Insightful)

Anonymous Coward | more than 2 years ago | (#38894993)

Reads like a rogue's gallery of the financial sector.

Google opened at $98 a share... (5, Informative)

tekrat (242117) | more than 2 years ago | (#38895035)

If I recall, Google was almost $100 a share when it IPO'ed and I thought that was way too much. So I did not buy, because I couldn't figure out how they were going to sustain that.

Well, I was quite wrong because Google went up to $200 then $300, then $400 and has been at something around $500 a share for the last 6 or 7 years. Crazy.

So, I don't know what to think about Facecrook. On one hand, I find the company utterly despicable. On the other hand, companies that are utterly despicable tend to go up in value -- a lot.

They are going to be the top dog in social media for at least the next 5 years, which is enough time to buy some shares, watch them go up in value, and then sell in about 3 or 4 years with no regrets if it goes up further.

Re:Google opened at $98 a share... (1)

Anonymous Coward | more than 2 years ago | (#38895141)

When Google went public was it valued at $100 Billion?

Re:Google opened at $98 a share... (1)

null-und-eins (162254) | more than 2 years ago | (#38895149)

I don't consider a factor of 5 or 6 extraordinary given the risk. Take a look at Intel or Amazon for their growth since they IPOed.

Re:Google opened at $98 a share... (4, Insightful)

kaellinn18 (707759) | more than 2 years ago | (#38895167)

Here's the major difference I see. When Google had its IPO, they were coming out with new services all the time. It wasn't just a search engine. Since then, they've developed Android and have a good share of the cell phone market. Facebook has made... well, Facebook. That's it. Not only that, but every time they have "improved" it, it's almost always made it worse. I don't even use it anymore. Unless Facebook is going to unveil some innovative plan about where they are going, there is zero reason to buy this stock.

Re:Google opened at $98 a share... (1)

Anonymous Coward | more than 2 years ago | (#38895353)

They "made it worse" in the sense there were very vocal complaints about it. But did those changes actually affect subscriber numbers. And did they affect the amount of advertising that could be sold. If everyone complains but keeps on using the system, those complaints don't mean much. And especially when "everyone' is actually just a small minority of users. Most of Facebook's users just shrugged and kept using the new interface.

Re:Google opened at $98 a share... (0)

Anonymous Coward | more than 2 years ago | (#38895539)

"they were coming out with new services all the time"

Google has only one service - getting ads before eyeballs. Everything else is fluff and padding.

Re:Google opened at $98 a share... (1)

niftydude (1745144) | more than 2 years ago | (#38895267)

Share price is meaningless. What is important is market capitalization.

What was google's market cap when it ipoed?

Re:Google opened at $98 a share... (2)

zill (1690130) | more than 2 years ago | (#38895595)

What was google's market cap when it ipoed?

23 billion USD [washingtonpost.com]

Remember, this was back in 2004, when Google was just a search engine. Gmail, Google Docs, Google Maps, Google Chrome, Google Earth, and Android did not exist yet.

Google's current market cap is 188.77 billion. Is Facebook half as valuable as Google? I guess the market will soon decide that...

Re:Google opened at $98 a share... (0)

Anonymous Coward | more than 2 years ago | (#38895279)

share price is a completely worthless number for any proper analysis of a company or a stock

Re:Google opened at $98 a share... (1)

vlm (69642) | more than 2 years ago | (#38895365)

has been at something around $500 a share for the last 6 or 7 years. Crazy.

Why? I have a treasury direct account where I can buy risk free USG bonds for a whopping 0.5% rate or so (well its complicated and depends on the length of time, etc) Pull the numbers for the mighty GOOG: an EPS around $30 and a growth rate around 6%.

How much will it cost me to get around $30+6% next year if I buy riskless US bonds, answer, a heck of a lot. It only costs me around $600 to get around $30 next year, which is frankly not all that bad. Its risky, but not that risky.

Note that we live in a centrally controlled economy not by any means a free market. What happens to equity prices if bond prices drop to a 5% rate... Hmm why risk it with the mighty GOOG when I can get 5% riskless from treasury direct... Its a rigged, corrupt market so there is little point in trying to reason out the future, but at least at present, a "sane" price for GOOG is around $500 plus or minus maybe 25%.

Re:Google opened at $98 a share... (0)

Anonymous Coward | more than 2 years ago | (#38895557)

Its a rigged, corrupt market so there is little point in trying to reason out the future, but at least at present, a "sane" price for GOOG is around $500 plus or minus maybe 25%.

I understand your reasoning on EPS and the 'sane' price on any stock, but it only holds if those earnings result in shareholder value. They could use it to pay themselves huge bonuses or whatever. Me, I go by how much a company pays out in dividends. If they don't pay a dividend, I don't see it as investing, it is speculating (that later on, someone else will be willing to buy the shares from you, for more than what you paid for them).

Its a roundtable of evildoers (2)

bussdriver (620565) | more than 2 years ago | (#38895475)

Anybody notice all the banks involved with the IPO?

Facebook seems a perfect match for them.

The Emperor's New Stock (4, Insightful)

ackthpt (218170) | more than 2 years ago | (#38895047)

I can't help but feel there's some irrational exuberance at work here. Exactly why is Facebook worth $75 or $100 Billion? Do they have a revenue stream like Google has?

Re:The Emperor's New Stock (1)

b4dc0d3r (1268512) | more than 2 years ago | (#38895549)

Sort of. Extremely targeted advertising. They know not just your e-mail contents like GMail, or search terms like a Web/Image search.

They don't just know everything you've ever put in a status, like "eating chimichangas tonight with the hubby!!!11!1eleventy11!" They know who your friends are, what your friends like. You can also follow politicians, entertainers, product pages... the possibilities are endless.

This is the holy grail of what Google has been trying to piece together for years. Finally Google realized this and created Google+ but it doesn't have anywhere near the user base. And that doesn't include an incredibly addictive gaming platform that is hugely popular.

Someone above mentioned s $250 million or so NET profit on revenues of $1.5 BILLION. That doesn't seem very good, they should be higher margin than that. I don't know where their money is going, but if they can cut the costs they will be sitting on a gold mine. If they can't figure out how this will be an epic disaster.

http://www.insidesocialgames.com/2011/12/29/2011%E2%80%99s-most-popular-facebook-games-by-genre-arcade-casino-and-hidden-object-games-dominate-strategy-shows-strong/ [insidesocialgames.com]

Growth is too limited for this to be a good deal (1)

null-und-eins (162254) | more than 2 years ago | (#38895049)

At a valuation of $75B to $100B, how much can we expect Facebook's share price to grow? Apple's valuation is now at $400B to $500B, so maybe 5 to 10 times at most while there is a considerable risk for not much growth at all. The share price of Amazon and Apple grew over 100 times since their IPO but this can't happen with Facebook because their IPO is coming fairly late. So, while the IPO is a great day for early investors, it's not worth it for average investors.

Re:Growth is too limited for this to be a good dea (1)

brainzach (2032950) | more than 2 years ago | (#38895157)

The deal isn't any worst than buying Apple or Amazon stock right now. The growth potential is more modest, but it is still has higher potential of returns than investing in bonds.

If you want to make 100 times the amount you invest in, you have to look for small companies that no one knows about that have the potential to make it big.

Re:Growth is too limited for this to be a good dea (1)

null-und-eins (162254) | more than 2 years ago | (#38895261)

The deal isn't any worst than buying Apple or Amazon stock right now.

That's right. But while Amazon and Apple probably are not going to grow 5 times either, they have a proven business model and they are unlikely to lose more than 50% in value. The same cannot be said about Facebook that depends for revenue heavily on a few partners. Therefore the risk/reward ratio should be much better for Facebook (to get me interested).

Re:Growth is too limited for this to be a good dea (1)

Sir_Sri (199544) | more than 2 years ago | (#38895241)

More like the other way around. If they're IPOing this late they should have a solid balance sheet already. that makes it good for everyday investors and bad for high risk, high return ones. For every facebook that should have spent the last 8 years getting its business plan in order along with customers and so on there are 100 never heard ofs that took VC, and imploded. Facebook *should*, even if their balance sheet isn't great, have a plan on how to convert that IPO money into revenue, which is what people would be investing on. And if you can't figure out how facebook is going to collect 50 billion dollars a year in revenue, you should be very skeptical of valuing them at 100 billion dollars (which is just less than half the size of IBM or HP).

Everyday investors want to own banks and GE. Boring companies that pay boring dividends and have boring stock price growth. People who have money to lose want to invest in apples and amazons. Because how close did apple shareholders come to having nothing? Right. How many not quite amazons have disappeared into oblivion?

Arguably apple, with their 100 billion dollars cash on hand is a better 'everyday' investor bet than facebook, since Apple can pay out 20-25% of its shareholder value in a dividend tomorrow if it wants to. Facebook could get crushed under the weight of privacy rules all around the world or god knows what, and they have nothing of value to cough up to shareholders if they start faltering.

What will the money be used for? (0)

Anonymous Coward | more than 2 years ago | (#38895103)

I think it is interesting. What is the money going to be used for?

I have no clue. Did read an interesting blurb about Facebook wanting to cut out the middle men from their advtertising. Other than that, what do they need? Maybe a cleaner web page? That's not billions though.

Stock meeting (0)

Anonymous Coward | more than 2 years ago | (#38895201)

who wants to bet that at the first stock holder meeting someone comes up and wants an explanation as to why there is no DIS-like button.

Here's what I hope (1)

Pollux (102520) | more than 2 years ago | (#38895209)

I hope they have a huge successful IPO.
I hope the share price takes off like a rocket.
I hope the Koch brothers and every other Gordon Gekko pumps their "hard-earned money" into the stock.

And then I hope that it tanks harder than MySpace in the hands of Rupert Murdoch.

Inspirational (3, Insightful)

paiute (550198) | more than 2 years ago | (#38895249)

I'm going to look around right now for people to screw and things to steal.

"Like" (1)

concealment (2447304) | more than 2 years ago | (#38895315)

All I can do is click like. I think all these neat technologies train us as much as we use them.

Timeline (0)

Anonymous Coward | more than 2 years ago | (#38895555)

Can't wait to see how much the stock drops when they force timeline on everyone and users start deactivating (because you know you can never actually delete your information) en masse in protest as Facebook marches towards becoming the turd that is MySpace 3.0

Well, it's a real shame. (1)

forkfail (228161) | more than 2 years ago | (#38895581)

There goes all of your oh-so-valued privacy at Facebook, now that they've got stockholders to answer to.

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