Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Facebook IPO Stumbles Out of the Gate

Soulskill posted more than 2 years ago | from the go-big-or-go-home dept.

Facebook 423

Facebook's much-hyped IPO kicked off today, but an anonymous reader points out that things didn't go quite as smoothly as investors hoped. "Public trading didn't get underway until about 11:30 a.m. ET, half an hour after it was supposed to. The delay was likely caused by the huge amount of interest in the stock – especially by retail investors. In the first few minutes of trading, Facebook shares were only up between 5 and 10 per cent and by noon were essentially back down to the IPO price of $38. Many observers had expected the stock to double in price by the end of the day, if not sooner." The NY Times has a data visualization showing how Facebook's IPO compares to other tech IPOs throughout the years, and how the first day of trading treated all of those companies. Meanwhile, the debate is lively over whether the social networking giant will be a good investment. "The banks helping take Facebook public want us to value this 8-year-old upstart at as much as $104 billion, more than Disney or Kraft Foods, though those companies earn three and four times more. That top valuation is also more than 100 times Facebook's earnings last year, versus 13 times for the average company. At such a high price, it will take years for this so-called earnings multiple to fall to a more reasonable level, and that's assuming the company can maintain its torrid earnings growth."

cancel ×

423 comments

Sorry! There are no comments related to the filter you selected.

It's stupid to compare to Facebook's profit (0, Troll)

fdskfs (2642685) | more than 2 years ago | (#40044033)

Facebook hasn't yet really spent time on monetization. Their primary goal has been quick growth and they have greatly succeeded in that. Yes, there are ads and similar, but they are not yet at the level they could or even should be. Thus it's useless to try to compare to Facebook's earnings. And this is how the game is played, and what even many slashdotters want - make a great service first, and only then focus on profiting. It's not like Facebook is going to run out of cash, they still have great income and assloads of banks and venture capital ready to kick in if needed.

I do have to applaud Mark Zuckerberg. He is definitely a geek that made it, and at such an young age too. I know slashdotters are jealous and hate him, but boy is he something. He even shows the typical geeky attitude of wearing whatever clothes he wants, even to business meetings with banks! Give the guy some credit where due.

Re:It's stupid to compare to Facebook's profit (5, Insightful)

perry64 (1324755) | more than 2 years ago | (#40044089)

"Facebook hasn't yet really spent time on monetization. Their primary goal has been quick growth and they have greatly succeeded in that."

Where have I heard that before? Ah, yes, we're back to valuation based upon "eyeballs" or "clicks." How'd that work out last time?

Re:It's stupid to compare to Facebook's profit (5, Informative)

Troyusrex (2446430) | more than 2 years ago | (#40044143)

Last time I heard it was Google's IPO. That turned out pretty darn well.

Re:It's stupid to compare to Facebook's profit (2, Insightful)

EvilBudMan (588716) | more than 2 years ago | (#40044399)

Google was no where as big of a company as FaceBook is now when they IPO'd. I just don't see where the money is to be made unless they branch out into Google's territory of search. FB adds are just harder to target than Google ones. They are half the price but without any click through. Branding would be about the only kind of advertising you do there unless FB gets into phones, gadgets, etc.

If there is a way to make money in social media FB IS the big player here.

Re:It's stupid to compare to Facebook's profit (5, Insightful)

mozumder (178398) | more than 2 years ago | (#40044841)

Branding would be about the only kind of advertising you do there unless FB gets into phones, gadgets, etc.

Actually, branding is the LAST thing you'd do on Facebook. Place your ad on FB, and your brand would be seen as Spam, instead of as something valuable.

Why would any advertiser place their brands ad next to your friend from high-school throwing up, when they can place it next to a Kate Moss cover story in Vogue?

So, that's how branding works.

Re:It's stupid to compare to Facebook's profit (1, Informative)

fdskfs (2642685) | more than 2 years ago | (#40044157)

Seems to have been quite great for Google, which spent its first six years (1998-2004) without making anything and just running things on venture capital.

Re:It's stupid to compare to Facebook's profit (5, Informative)

MLCT (1148749) | more than 2 years ago | (#40044289)

Seems to have been quite great for Google, which spent its first six years (1998-2004) without making anything and just running things on venture capital.

Actually not quite true, in the year+ before Google's IPO they were making money hand over fist, far more than they had thought they would be, and so they were hiding it:

By 2003, AdWords Select was serving hundreds of thousands of advertisers and making so much money that Google was deliberating hiding its success from the press and from competitors. But it was only a launching pad for the next brilliancy.

source [nybooks.com]

Re:It's stupid to compare to Facebook's profit (-1, Troll)

fdskfs (2642685) | more than 2 years ago | (#40044383)

True, they did start Adwords a bit before their IPO - but let's not forget that the revenue they made is not even in the same ballpark that what Facebook is making now, before their own IPO.

Re:It's stupid to compare to Facebook's profit (0)

V-similitude (2186590) | more than 2 years ago | (#40044329)

Google also hired someone who knows business to run the company. Zuck has insisted on doing it himself and made it very clear he still doesn't give a crap about making money (and probably never will). That's may be laudable, but not something to invest in. Also, google had growing profits at least going back to 2000, so not sure where your numbers come from.

Re:It's stupid to compare to Facebook's profit (2)

fahrbot-bot (874524) | more than 2 years ago | (#40044829)

Zuck has ... made it very clear he still doesn't give a crap about making money (and probably never will).

For himself or others? Because it's pretty clear that he is making/will make a boatload of money.

Re:It's stupid to compare to Facebook's profit (5, Informative)

MyLongNickName (822545) | more than 2 years ago | (#40044315)

I am not sure which is more disappointing. The parent post or the people who voted this insightful.

Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual. The more information they can find out about you, the more effective their advertising.Instead of marketers blindy throwing out products to 25-34 year old females, they will be able to disect the market in finer terms and use their money wisely. The more effective the advertising, the more money they can charge. So while you laugh at the idea, Google's founders could lose a billion in their couch cushions.

Re:It's stupid to compare to Facebook's profit (4, Insightful)

Zocalo (252965) | more than 2 years ago | (#40044583)

Right, because Facebook did such a sterling job of finding people whose profile made it appear like they had with the cash to spend on a General Motors car. OK, maybe a bad example given the current state of global finances, but when was the last time you heard mention of a successful Facebook marketing campaign? I don't even think Zynga has done that, and they are about as linked at the hip to Facebook as you can get.

I think that's the crux between Google and Facebook, really, and probably why Zuckerberg seems so interested in integrating search into Facebook all of a sudden. I'll bet plenty of people post things to Facebook about how much they like some expensive trinket, but it's Google that gets to see which ones are actually looking into making the purchases. My long term prediction; neither company is going to go away anytime soon, but Google is going to see the growth while Facebook is going to start a slow slide into mediocrity with the next few years unless it can find a major source of revenue in all those terabytes of data it has.

Re:It's stupid to compare to Facebook's profit (2)

MyLongNickName (822545) | more than 2 years ago | (#40044761)

And that is exactly the point. right now, Facebook has been run by a kid who just wants to build the biggest social network. If Facebook can succeed in learning how to make moeny, they will go from their paltry $1 Billion earnings to a really big number :)

Re:It's stupid to compare to Facebook's profit (0)

Anonymous Coward | more than 2 years ago | (#40044717)

Eh, people overvalue that type of demographic information. If someone wants a direct mail list of 30-year-old married liberal women who own cats, the data has been around for decades. No company has ever gotten rich advertising that way.

Google makes money because they can actually detect purchasing intent. They also have the entire web bugged, while FB only has a few buttons here and there.

Facebook can double their revenue by simply adding ads to their mobile apps. Otherwise, its difficult to see what's next.

Re:It's stupid to compare to Facebook's profit (5, Interesting)

Anonymous Brave Guy (457657) | more than 2 years ago | (#40044749)

Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual.

Advertising is still only worth anything if the people seeing the ads actually buy stuff.

Just this week, GM pulled out of Facebook advertising [reuters.com] , representing a loss of millions of dollars to Facebook. Here's the money quote, in every sense, from that link:

GM dropped its Facebook ads because they were less effective than other options such as Google's AdSense, the sources said. Facebook's ads garner about half the clicks per page view, a measure of effectiveness, compared with the average website.

It turns out that focussed advertising is much more valuable when it's related to something that someone is searching for or reading about right now, and people who use Facebook a lot are (shock!) not doing it because they enjoy the ads. IIRC, there was another survey reported this week, in which about half of the Facebook users questioned said they would never click a Facebook ad.

The more effective the advertising, the more money they can charge.

Exactly. And Facebook aren't doing very well on that score.

What's more, the growth in their user base so far has been based on social pressure and reaching a critical mass of users who bring their friends along with them through networking effects. There simply aren't enough people in the world for them to carry on doing that at the same rate.

Surprising, I know, but I'm in the "Are you kidding?!" camp on this one.

Re:It's stupid to compare to Facebook's profit (4, Interesting)

Znork (31774) | more than 2 years ago | (#40044843)

There is a significant difference tho; with google there is actually a fair chance that the searcher is looking for a product related to the actual search at hand, while with facebook you're basically trying to surreptitiously slip sales in to a largely unrelated activity.

Targetted advertising simply isn't that worthwhile if you cant target it temporally. You may know my interest intimately, but you're not going to sell me anything unless I'm actually in the market for that specific thing at that specific time. At best you can build brand awareness, but there are many ways to do that that are at least as good or better by simply targetting specific venues, mags, etc.

And Facebook will NEVER monetize through ads (1)

mozumder (178398) | more than 2 years ago | (#40044353)

Facebook has no revenue potential as a media company. The idiots that believe in Facebook are clueless wall-street tech nerds, not savvy media professionals. Social media sucks to build brands with.

Why would any advertiser place their ads on Facebook next to a picture of their friend from high-school throwing up, when they can place their ad in traditional print media next to a picture of Kate Moss in Vogue or on TV next to Leighton Meester in Gossip Girl?

This is the fundamental problem with social-media: it's value as media is very, very low. The only possible ads that may possibly work with social media are transactional local ads, NOT national advertisers with brand names to protect.

Of course, most people aren't media professionals, and will buy into the hype and think Facebook has miraculous untold trillions to make from advertisements, causing this IPO to skyrocket.. but wait a few years, when advertisers start to pull out as they all try and fail in their attempts to market through Facebook.

Seriously, Facebook is the equivalent to the comments section on YouTube or any other mildly retarded site that relies on public input. Why would any intelligent advertiser place their ad in media created by average people, instead of by professional producers?

Anyone can reach billions of people for cheap. (ever try email marketing?) The problem is reaching the billions of people in a positive way for your brand. Do it wrong, and it becomes brand-destroying SPAM.

I like Facebook and all, it's just that I don't think they'll be able to compete against the REAL advertising industry. They need to do something else to monetize, like sell Facebook credits or photo hosting or other media..

Re:And Facebook will NEVER monetize through ads (0)

0123456 (636235) | more than 2 years ago | (#40044415)

Why would any advertiser place their ads on Facebook next to a picture of their friend from high-school throwing up, when they can place their ad in traditional print media next to a picture of Kate Moss in Vogue or on TV next to Leighton Meester in Gossip Girl?

People still print ads? On paper?

Re:And Facebook will NEVER monetize through ads (5, Funny)

arkane1234 (457605) | more than 2 years ago | (#40044585)

People still print ads? On paper?

It's that stuff you see outside, under the daystar.

Re:And Facebook will NEVER monetize through ads (0)

mozumder (178398) | more than 2 years ago | (#40044651)

People still print ads? On paper?

Is there any other media outlet that Kate Moss would appear in?

Re:It's stupid to compare to Facebook's profit (5, Insightful)

Galestar (1473827) | more than 2 years ago | (#40044119)

Maybe I should suggest to my company that they start giving our products away for free just to grow the user base. Apparently having revenues lowers your stock price.

10% Negative? That's a CRASH! (5, Informative)

Jeremiah Cornelius (137) | more than 2 years ago | (#40044199)

Facebook IPO Crashes Nearly 10% After $42.05 Opening Price - and the Underwriters had to STEP IN [wsj.com] , to prevent a free-fall in decline. That is - no matter what you'd spin it - a market manipulation.

Bubble, meet needle!

Re:10% Negative? That's a CRASH! (1)

fdskfs (2642685) | more than 2 years ago | (#40044345)

Eh, nowhere it stays Facebook's shares crashed. In fact it raised quite fast, and then again lowered down to slightly higher level than the initial $42.05. Let's not also forget that Facebook valued them very highly to begin with, which is one of the main things even slashdotters are crying about - it's not going to rise much higher, since they probably put it into a sweet spot already.

Re:10% Negative? That's a CRASH! (1)

Archangel Michael (180766) | more than 2 years ago | (#40044791)

As of this moment, FB shares are trading at 38.58 and falling Open at 42, down to 38 ... That's twice it has dropped to 38 ... and I'm wondering if this time there will be no rescue.

Re:10% Negative? That's a CRASH! (1, Insightful)

TheLink (130905) | more than 2 years ago | (#40044849)

I'm no expert but if the shares don't go up much doesn't that mean they were valued correctly from FB's point of view? Whereas if they were valued low and shot up, FB doesn't benefit as much. It just benefits those who bought/got the stock at the start.

http://www.nytimes.com/2011/05/21/opinion/21nocera.html [nytimes.com]

A huge opening-day pop is not a sign of a successful I.P.O., but rather a massively mispriced one. Bankers are rewarding their friends and themselves instead of doing their fiduciary duty to their clients.

Re:10% Negative? That's a CRASH! (1)

Anonymous Coward | more than 2 years ago | (#40044767)

Facebook IPO Crashes Nearly 10% After $42.05 Opening Price - and the Underwriters had to STEP IN [wsj.com] , to prevent a free-fall in decline. That is - no matter what you'd spin it - a market manipulation.

Bubble, meet needle!

Your link doesn't support your statement at all. Do you have any actual proof of your claim?

Re:It's stupid to compare to Facebook's profit (2)

casings (257363) | more than 2 years ago | (#40044131)

Profit is how investors get paid.

Re:It's stupid to compare to Facebook's profit (1, Informative)

fdskfs (2642685) | more than 2 years ago | (#40044259)

Since Facebook (like Apple) doesn't pay dividends, that hardly matters. The only way you can profit from buying Facebook's stock is sell it at higher price and that is not tied to profit, or by buying share large enough (though only 18% of Facebook's shares were made available, and big investors like the Russian Digital Sky Technologies have had access to buy before anyway)

Re:It's stupid to compare to Facebook's profit (1, Flamebait)

V-similitude (2186590) | more than 2 years ago | (#40044379)

Apple pays dividends. But your point is silly and not true, go understand investment and ownership better.

Re:It's stupid to compare to Facebook's profit (1)

Billly Gates (198444) | more than 2 years ago | (#40044601)

He is right. Apple only now just started paying a dividend. If you buy monopoly money you wont gain a dime unless someone is willing to pay you more than what you paid for it. Its gambling as shares with no dividends are useless pieces of paper.

The goal of a company is always to raise the stock price. Not make a profit for this reason.

Now if you pay dividends then its actually worth something.

Re:It's stupid to compare to Facebook's profit (3, Informative)

Willuz (1246698) | more than 2 years ago | (#40044139)

My facebook is always covered in ads for young hot single women in my area. If they're generating that much revenue then they must be incredibly wealthy young hot single women and it should be easy to find myself a sugar mama.

Re:It's stupid to compare to Facebook's profit (1)

arkane1234 (457605) | more than 2 years ago | (#40044635)

It's targetted marketting - Mine is about military stuff and motorcycles. It sounds like we know what you gravitate towards.

Re:It's stupid to compare to Facebook's profit (1)

Anonymous Coward | more than 2 years ago | (#40044173)

A large percentage of the people who hate The Zuck do so because he was portrayed as a shitty human being in The Social Network.

Another large block hate him because his product purposely reduces privacy on the internet.

And for the rest of us there's just plain jealousy. Hell, I don't even care about the money; I just wish I could go back and be 28 again.

Re:It's stupid to compare to Facebook's profit (4, Informative)

Nadaka (224565) | more than 2 years ago | (#40044703)

And then there are the people who hate him because he really is a shitty human being long before the social network was made.

Re:It's stupid to compare to Facebook's profit (5, Insightful)

FilmedInNoir (1392323) | more than 2 years ago | (#40044183)

Does anyone have a toothpick? I have AstroTurf stuck in my teeth from reading that. I lived through the dot-com boom... Facebook is great and it will/can make money, but I haven't seen this much hype since Pets.com

Re:It's stupid to compare to Facebook's profit (4, Funny)

Jeremiah Cornelius (137) | more than 2 years ago | (#40044305)

MEME TIME

Remember M$ and "Monkey Boy"?

Remember MAFIAA ?

Here's our NEW MEME. Carry this in every Facbook CEO Namecheck:

"Suckerborg".

Thank you. That is All.

Re:It's stupid to compare to Facebook's profit (1, Informative)

Anonymous Coward | more than 2 years ago | (#40044213)

- New account? Yes!
- Only commented on this article? Yes!

Probably a shill/marketer? Yep.

Re:It's stupid to compare to Facebook's profit (-1, Flamebait)

alen (225700) | more than 2 years ago | (#40044215)

WTF are you talking about?

facebook is growing PROFITS at almost 100% every year. Revenue is up 5X over the last 3 years. they are about at the same point in revenue/profits as when google went public.

the only people i know who still use email are my mom and my kid's baseball team. everyone else i know uses facebook. gmail is mostly for spam and crap email

openID is dead. most legit websites with a login will let you use your facebook account. Facebook is the identity of the internet going forward.

Re:It's stupid to compare to Facebook's profit (5, Insightful)

Loughla (2531696) | more than 2 years ago | (#40044323)

Facebook is the identity of the internet going forward.

MySpace is the identity of the internet going forward.

Geocities is the identity of the internet going forward.

AIM is the identity of the internet going forward.

YAHOO Chat is the identity of the internet going forward.

Opendiary is the identity of the internet going forward.

Fucking 4chan is the identity of the internet going forward.

I think it might be a bit bold to say that this one site will be the face of the internet from now on. . . The internet is a fickle mistress, and small changes today can equal large changes in the future. The only difference between those other companies and facebook? Time. (yes, I know that some of them are still successful, I was making a point, just go with it)

Re:It's stupid to compare to Facebook's profit (0)

alen (225700) | more than 2 years ago | (#40044591)

how many myspace connect buttons do you see on the internet these days to let you create an account?

almost every legit website will let you use your FB account for the site account or link it so you don't have to remember a different ID per site

Re:It's stupid to compare to Facebook's profit (4, Funny)

Spad (470073) | more than 2 years ago | (#40044745)

Congratulations on missing the point.

Re:It's stupid to compare to Facebook's profit (1)

AuMatar (183847) | more than 2 years ago | (#40044393)

I don't know what you're smoking. Facebook as email? That's only if I don't know their email address (or vice versa) and it's only to ask for their real email. I've never gotten a facebook message of any importance.

Login via facebook? Sure, it's far more common than open id, but when I see a website start using it it's always to complaints from the user base, and usually the userbase shrinks by 50%. Facebook as identity is a joke.

I'm not saying FB isn't profitable or isn't a good business. But its growth is unmaintainable, and anyone buying their stock is taking on one hell of a lot of risk. I wouldn't buy it at 1/4 the price.

Re:It's stupid to compare to Facebook's profit (1)

alen (225700) | more than 2 years ago | (#40044625)

except for old people a lot of people will talk over facebook

my mom still emails me nonsense like people used to do 10 years ago, but for most of us this has been replaced by sharing nonsense to facebook

birthdays? you write on someone's FB wall to wish them a happy birthday

Re:It's stupid to compare to Facebook's profit (3, Insightful)

slyrat (1143997) | more than 2 years ago | (#40044431)

WTF are you talking about?

facebook is growing PROFITS at almost 100% every year. Revenue is up 5X over the last 3 years. they are about at the same point in revenue/profits as when google went public.

the only people i know who still use email are my mom and my kid's baseball team. everyone else i know uses facebook. gmail is mostly for spam and crap email

openID is dead. most legit websites with a login will let you use your facebook account. Facebook is the identity of the internet going forward.

I will say right now that that is only a portion of the population. It may be all that you know of but there are people that avoid Facebook because of one reason or another. Assuming that everyone has an id there, or even uses it regularly is similar to assuming everyone has an iPhone. It may be popular but there will just be people that wish to not use it.

Paid to post. (0)

Anonymous Coward | more than 2 years ago | (#40044227)

Paid to post.

Re:It's stupid to compare to Facebook's profit (2)

MightyYar (622222) | more than 2 years ago | (#40044241)

You make a good point. I'm in at $40 - let's see how the rest of the day goes :)

Re:It's stupid to compare to Facebook's profit (1)

Anonymous Coward | more than 2 years ago | (#40044251)

Geek Insufferable Douchebag

And no, it's not jealousy. I applaud many people who make it big, just not jerks that abuse and insult their customers, treat business associates dishonestly, and try to take basic rights from others in order to increase the padding in their own wallets. Whether he was making $5.00 or $5T, he's an asshole, and assholes don't deserve respect; even rich assholes.

Comment History (0)

TheNinjaroach (878876) | more than 2 years ago | (#40044287)

3 comments in your entire account history and they are all in this article. You stink.

Re:It's stupid to compare to Facebook's profit (1)

nine-times (778537) | more than 2 years ago | (#40044357)

make a great service first, and only then focus on profiting.

The only problem is that the initial "great service" needs to be something that leads to a sensible and sustainable business model. If not, then either the business will fail, or it will need to change its "great service" to be something that has a business model.

So assuming Facebook sticks around and they want to make tons of money, it should be leading us all to ask, "How are they going to use our data to make money?" How they use our data today is kind of creepy, and apparently even that's not profitable enough.

Re:It's stupid to compare to Facebook's profit (5, Informative)

NeutronCowboy (896098) | more than 2 years ago | (#40044385)

1) Brand new user
2) Posts a multi-paragraph post within a minute of the story going live
3) Glowing review of Facebook that goes against every conventional wisdom
4) Gets basic facts wrong about finance
5) Gets basic facts wrong about business etiquette

Woo. More astroturf.

To be a bit more on-topic: the facebook valuation is insane. A 100 times current earnings? It'll be years before Facebook can justify that kind of price, and that's assuming that it will keep growing as it has - which is an insane proposition, considering that there aren't that many more people who CAN join Facebook.

Re:It's stupid to compare to Facebook's profit (4, Interesting)

wisnoskij (1206448) | more than 2 years ago | (#40044409)

And we have absolutely no proof that they ever will be able to effectively monetise Facebook or that it is even possible to the extent that all of these optimists believe that it will be.

Right now Facebook's value is 99% smoke and mirrors, and I would never invest in it.

Re:It's stupid to compare to Facebook's profit (0)

Anonymous Coward | more than 2 years ago | (#40044605)

Well, sorry, but some of us feel the guy is an atomic asshole, and we tire of a society that rewards such people with unimaginable wealth. And this is from someone who gets the capitalist system, and I know his wealth will live in investments and purchases and continue working and doing other things, and him being that wealthy does not hurt me. I don't begrudge anyone their success, but at the end of the day some of us do get a bit tired of guys like this getting their virtual dicks sucked endlessly by the media and Slashdot geeks.

Wow. He dresses casually. Look out! Badass in the room! (eyeroll)

ObNelson (5, Funny)

Anonymous Coward | more than 2 years ago | (#40044077)

(points) Ha ha!

Made a nice profit (0)

Anonymous Coward | more than 2 years ago | (#40044079)

Whatever, I got in early, expected small fall and shorted. Made $3.23 per share and bought for $25000. Nothing spectacular, but overall a nice profit for a day's work.

Re:Made a nice profit (1)

X0563511 (793323) | more than 2 years ago | (#40044425)

Indeed. My first trade ever (Yay), I just bought a single share for about $40.

If it sinks, who cares? But if (for some reason) it explodes, I'll get something out of it.

Re:Made a nice profit (0)

Anonymous Coward | more than 2 years ago | (#40044599)

How'd you buy it? I'd love to do something like that for certain companies, but I don't know how to go about making occasional trades without paying an arm and a leg for monthly trading accounts.

Re:Made a nice profit (1)

Zocalo (252965) | more than 2 years ago | (#40044675)

If it sinks, you can always get your certificate framed alongside a burst balloon and mount it proudly on your wall as a statement and talking piece. It'd make a good companion to a share of SCOX carefully mounted with an almost depleted toilet roll too - I'd suggest using an Andrex because, like the court case, it's very, very long... :)

They remember the Dot-Com Bubble (5, Funny)

cpu6502 (1960974) | more than 2 years ago | (#40044101)

A bunch of investors throwing tons of money after dot-com companies on the belief that these companies, despite having no earnings, would somehow grow big. Then in 1999-2000 the bubble burst.

Today's investors are not going to make the same mistake of going after another dot-com company that has almost no earnings. The memory of 13 years ago is still too fresh. (Plus many of them are probably short on cash due to the ongoing recession.)

Re:They remember the Dot-Com Bubble (1)

Mashiki (184564) | more than 2 years ago | (#40044475)

Considering European economists are now talking that they'll be experiencing a 10 year depression after another 3-4 year recession after Greece bails. I'm sure that things like this will be very much-so at the front of their mind.

When they (5, Insightful)

Loughla (2531696) | more than 2 years ago | (#40044121)

announced this IPO, I was skeptical. Then they amended it, eight times (I think). Now, it seems to me that we've blown a rather large bubble - as the article says, this 104 billion is 100X their earnings last year. I wonder which set of retirees or naive persons will lose their asses on this one when it pops.

I remember when, recently, myspace was quite large. Does anyone else have a myspace page still? Now imagine if you owned 100 shares of that company. . . . . Now imagine your investment person has most of your retirement tied up in that company. . . .

Thoughts?

Re:When they (4, Insightful)

MyLongNickName (822545) | more than 2 years ago | (#40044233)

If you are risk averse, stay away from IPOs? This ain't rocket science... the more risk you are willing to take, the higher return you will get long term. If you are not able or unwilling to stay in for the long term, or a drop in your portfolio will keep you up at night, play it safe. I am a moderately aggressive investor as I have a 30-40 year investment timeline and a Finance background. My mom who works for the government, hates risk and will be retired in five years should have a more passive investment strategy.

Re:When they (1)

Anonymous Coward | more than 2 years ago | (#40044669)

the more risk you are willing to take, the higher return you will get long term.

Baloney.

Stuffing your retirement savings in a vagrant's underwear is a very risky step, but it won't give you a higher return.

Only higher returns, accounting for risk, will give you a higher return. It's very easy to hide risk. And it's easy to trade risk for a higher apparent rate of return (until the risk bites you in the ass.)

Re:When they (1)

orthancstone (665890) | more than 2 years ago | (#40044303)

1) Anyone who puts most of their retirement in one company is a fool.

2) Did you really just compare myspace to Facebook and imply Facebook will go the same route? That's laughable for the foreseeable future.

Re:When they (2)

Loughla (2531696) | more than 2 years ago | (#40044359)

foreseeable future

Define foreseeable future. Please.

And yes, yes I did.

Re:When they (1)

orthancstone (665890) | more than 2 years ago | (#40044557)

Ok, so let's follow up to get an actual reason for your hypothesis:

What massive internal mistakes do you see Facebook making right now that would imply a similar falloff to myspace's collapse?
Who is the main competitor you see beating Facebook? myspace didn't just fail of its own accord, it couldn't compete in the social marketplace as well as Facebook. Without someone sitting in the shadows to beat Facebook at its own game, your entire argument currently speculates that Facebook will lose just by virtue of it falling on its face. That's a stretch at best.

Re:When they (2)

Loughla (2531696) | more than 2 years ago | (#40044799)

Tell me this - when myspace was at its height - at its absolute highest point, you would have predicted its downfall? I'm not saying that today, right now, there is someone or something waiting to kill facebook. I'm just saying that, based on past observations and experience, it is inevitable. The internet really is a changing thing, and anyone that banks on one website to rule them all (outside of google apparently), is foolish.

Re:When they (1)

Quiet_Desperation (858215) | more than 2 years ago | (#40044673)

Define foreseeable future. Please.

Well, you want the science answer or the woo answer or the pragmatic answer?

Science: about one quantum tick of the universe (TBR)

Woo: Madame Pinkie's prognostications are limited only by the imagination.

Pragmatic: in this particular case, a few months, give or take.

Re:When they (5, Insightful)

V-similitude (2186590) | more than 2 years ago | (#40044403)

2) Did you really just compare myspace to Facebook and imply Facebook will go the same route? That's laughable for the foreseeable future.

I'd love to hear why exactly that's so out of the question.

Re:When they (1)

orthancstone (665890) | more than 2 years ago | (#40044581)

Because there's no indication that Facebook is falling apart and no major competitor out there to kick their ass? Even Google isn't making a dent in Facebook's ability to further integrate into the rest of the web.

Re:When they (0)

Anonymous Coward | more than 2 years ago | (#40044781)

Pardon? MySpace was the social networking juggernaut until, poof, it wasn't. There was no single moment in the history of MySpace that made it undesirable, it was a cludge of small management and design decisions over time, no single one of which would have been an issue. Just because Facebook doesn't have major deal-breakers now (for the most part) doesn't mean it won't later down the line. Their perpetual existence is not the foregone conclusion you paint it to be.

Re:When they (0)

Anonymous Coward | more than 2 years ago | (#40044515)

Your Myspace example shows how fickle people can be. Facebook could be obsolete in 2 years. If Facebook "over-monetizes" their user base, many people will stop using the service, rendering it much less valuable.

Options trading (1)

Citizen of Earth (569446) | more than 2 years ago | (#40044153)

I'm bummed out that Put options on this overpriced turkey won't start trading for six days. (The mechanics of genuine Shorts are too ugly for my taste.)

Re:Options trading (1)

alexander_686 (957440) | more than 2 years ago | (#40044495)

But you can't short an IPO for the first 30 days, IIRC. (For myself, it is not the mechanics that scare me, it's the risk. Saw I guy short .coms in the 90's - lost all of his money before the bubble burst. The market can remain irrational longer then you can remain liquid.) So you are better off with the puts - which I predict will be very expensive.

What a moronic conclusion (3, Insightful)

MyLongNickName (822545) | more than 2 years ago | (#40044177)

A company issues an IPO and the closing price ends up at the same price as the IPO price? Not only is this not "stumbling out of the gate", but it means it was done right. If the price jumps too much, the founders of facebook lost out on a lot of money. If it drops, then the initial investors were suckers.

Whether Facebook is able to increase earnings remains to be seen. My gut is it will increase substantially, but not enough to justify the current P/E ratio once risk is factored in. But others think the opposite. So, the investment bank did a very good job in pricing.

Re:What a moronic conclusion (3, Insightful)

Jeremiah Cornelius (137) | more than 2 years ago | (#40044347)

Look at Zero Hedge posts following this today, and see how this is all through NASDAQ execution tricks, and underwriter manipulations.

Failbook was a bust.

Re:What a moronic conclusion (2)

alexander_686 (957440) | more than 2 years ago | (#40044543)

Mod parent up. It's the winner's curse of auctions.

Google also "stumbled" out of the blocks because it's reverse dutch auction shifted a lot of the money to the founders and away from the IPO investors.

Facebook is kind of doing the same thing. They cranked up the price and quantity when the figured out demand would be so high - once again shifting profit to the founders who are selling.

GOOG is undervalued (5, Interesting)

michaelmalak (91262) | more than 2 years ago | (#40044189)

FB knows your stated desires. GOOG knows you're hidden desires. FB gets you when you're goofing off. GOOG gets you when you're actively seeking something and you're ready to buy.

GOOG is undervalued.

Re:GOOG is undervalued (5, Funny)

Anonymous Coward | more than 2 years ago | (#40044225)

Eventually GOOG will move into their endgame, where you pay $20 per month for the service of them not sending your "private browsing" search history to every one of your Gmail and Android contacts list entries.

Re:GOOG is undervalued (0)

Anonymous Coward | more than 2 years ago | (#40044689)

I'm not sure if you're trolling, kidding, or just daft, but I advise you to stop.

Re:GOOG is undervalued (0)

Anonymous Coward | more than 2 years ago | (#40044819)

It's a joke. Laugh.

Re:GOOG is undervalued (5, Funny)

dkleinsc (563838) | more than 2 years ago | (#40044603)

FB knows your stated desires. GOOG knows you're hidden desires.

Between the two of them, they could create one heck of a phone sex operation.

Stumbles? (2, Insightful)

Apotekaren (904220) | more than 2 years ago | (#40044201)

They NAILED the IPO, and neither undersold the stock(like LinkedIN did) and lose money that way nor did they value it too high and scare off any potential investors. I'm surprised and impressed.

Sure, for the guys holding the stock at FB it's a letdown, but the company nailed it.

Re:Stumbles? (5, Interesting)

gatesstillborg (2633899) | more than 2 years ago | (#40044763)

Yeah, but it sounds like they're just propping it up artificially at this point to maintain the opening price.

Zuckerberg proves how smart he really is (3, Insightful)

rmcd (53236) | more than 2 years ago | (#40044229)

The press coverage of Facebook's IPO is completely idiotic. For years the investment banks have been sticking it to companies doing IPOs. If the stock gets sold at $38 and it ends the day at $100, that means the company *should* have raised more than twice as much as it did. And it means that the employees participating in the IPO also got shafted. The people who benefit in that scenario are the privileged investors who get to buy at $38 and sell a few hours later at $100.

If Facebook ends up close to $38 at the end of the day, it will be a rare example of the stock having been priced correctly at the start. Where it goes from here is anyone's guess, but I have increased respect for Zuckerberg. Google had a different IPO process but also didn't give away a lot of money. They knew what the banks were trying to do to them.

Re:Zuckerberg proves how smart he really is (0)

Anonymous Coward | more than 2 years ago | (#40044469)

THANKYOU. Its like no one knows the point of an IPO is for the owners to make money.

Re:Zuckerberg proves how smart he really is (1)

Anonymous Coward | more than 2 years ago | (#40044655)

Except that top tier tech companies like FB don't really need much of an infusion in capital. The main reason for the IPO was to put the market's blessing on the company's valuation, and for the founders and insiders to cash in. On these latter two counts, the IPO didn't go too well. The point that you raised is the consolation prize, what the insiders tell each other as they leave the bar.

Re:Zuckerberg proves how smart he really is (1)

rmcd (53236) | more than 2 years ago | (#40044773)

Yes, people do say what you're saying, but I've always thought it was an investment banking marketing pitch. It's what the banker tells the shell-shocked founder as they leave the bar.

The truth is that Facebook will live or die on its product and its financial results going forward. A first-day stock price pop is just a transfer of funds from one set of pockets to another.

Re:Zuckerberg proves how smart he really is (0)

Anonymous Coward | more than 2 years ago | (#40044811)

Except that top tier tech companies like FB don't really need much of an infusion in capital. The main reason for the IPO was to put the market's blessing on the company's valuation, and for the founders and insiders to cash in. On these latter two counts, the IPO didn't go too well. The point that you raised is the consolation prize, what the insiders tell each other as they leave the bar.

WTF? Isn't the market leaving the price at EXACTLY the IPO price putting their blessing on EXACTLY what the company said it was worth?

Today has been a mind blow. How do people honestly not understand basic math and business sense?

For Future Reference (1)

19thNervousBreakdown (768619) | more than 2 years ago | (#40044319)

I'm terrible with money (poor impulse control, I don't think it's because I'm credulous, stupid, or have poor instincts although I guess I wouldn't know), so I don't have the cash to invest in this, just like I didn't with Google or Apple, when people were poo-poohing that stuff too. I realize there's confirmation bias and all, but I haven't made a prediction that turned out wrong yet (I thought people were crazy for buying MS stock in early 2000, that's the only other thing I've been willing to predict), so I'm posting this to give me an opportunity to be wrong:

Buying Facebook stock now will result in making a bunch of money.

If I'm wrong in 5 years, feel free to rub my nose in this post.

Re:For Future Reference (2)

alexander_686 (957440) | more than 2 years ago | (#40044613)

Two points.

First - making any other predictions? Let us say you have a 50/50 chance with FB. In 5 years you could be right because you were perceptive or lucky. Statistics won't tell you which. You need to make a lot of predictions.

Second, why don't you try some type of forced investment planning? Something like investing in your 401(k) and only checking and rebalancing your portfolio once a year? Promise you will put 50% of your next pay increase into savings? If you know you have poor control you can set up road blocks that will give you extra time to think.

The Emperor (1)

Anonymous Coward | more than 2 years ago | (#40044407)

has no clothes....

Curious (5, Interesting)

rabtech (223758) | more than 2 years ago | (#40044507)

I'm curious if price discovery is accurate right now since NASDAQ isn't delivering execution notices for FB orders. I know eTrade was down earlier (even the public website) and Fidelity has a notice that FB trades are stuck and have been since it started trading.

All that makes me curious how many orders are stuck out there in limbo land? Will people find out tomorrow that the order they thought was cancelled got filled?

Seems like a big screw up that NASDAQ doesn't want anyone to know about. I don't think you could have mishandled an IPO any further.

Stock owners become smarter? (1)

kaunio (125290) | more than 2 years ago | (#40044579)

Can anyone who keeps more track on the stock market tell me if my suspicion that the stock buyers are slowly learning that a hyped (tech) IPO initially only benefits those already with stock?

The stock market really feels like a game and people are slowly learning the rules.

Also, I think part of the problem with facebook is that it is so well known. A large part of the US (and the world) has a facebook account so most people know what the deal is about. I think that many can accept that there is value in the company in itself and the service for the users. However I also think that many find it problematic to "monetize" on it. Since the company really only have one product, the site, thinks can get sour quick if the users start to leave.

Watching their stock price (2)

wjcofkc (964165) | more than 2 years ago | (#40044629)

+1.18 / +3.10%

If they close in the red there first day of trading, what will it mean to investors and facebook?

Yeah (0)

Quiet_Desperation (858215) | more than 2 years ago | (#40044631)

Face what?

Facebook is the new (0)

Anonymous Coward | more than 2 years ago | (#40044695)

Ubuntu Unity

Facebook's mission (5, Insightful)

QuietLagoon (813062) | more than 2 years ago | (#40044707)

Mark Zuckerberg said at the opening bell ceremony that "Our mission is to make the world more open and connected."

.
I wonder if Mr. Zuckerberg knows that the Internet has beat him to it.

Having a public stock offering of a company like.. (1)

gatesstillborg (2633899) | more than 2 years ago | (#40044825)

. this is the rough equivalent of having a public stock offering of an actual video game, and I'm not talking about the company that makes the video game (ie. which is something salable), I'm talking about the video game itself.
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>