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Facebook, Zuckerberg Sued Over IPO

timothy posted more than 2 years ago | from the death-taxes-and-lawsuits dept.

Facebook 445

mrquagmire writes with this snippet from CNET: "Facebook shareholders have sued the social network, CEO Mark Zuckerberg, and a number of banks, alleging that crucial information was concealed ahead of Facebook's IPO. The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday's initial public offering 'a severe and pronounced reduction' in forecasts for Facebook's revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs."

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445 comments

So that's really why he gave up his citizenship? (5, Funny)

i_ate_god (899684) | more than 2 years ago | (#40088843)

It wasn't because of taxes, it was because of fraud? hmm

Re:So that's really why he gave up his citizenship (0, Troll)

Asksa (2646127) | more than 2 years ago | (#40088949)

Wrong guy, Mark Zuckerberg haven't given up his citizenship. But he does have an Indian wife now.

Re:So that's really why he gave up his citizenship (4, Informative)

SJHillman (1966756) | more than 2 years ago | (#40089007)

She's of Chinese descent, and was born in Massachusetts and grew up around Boston. Nothing Indian about her.

Re:So that's really why he gave up his citizenship (1)

zlives (2009072) | more than 2 years ago | (#40089289)

thanks for runing the fud thread :(

Re:So that's really why he gave up his citizenship (5, Informative)

Anonymous Coward | more than 2 years ago | (#40088967)

A) Saverin hasn't been involved in the running of facebook in years, and certainly had nothing to do with the IPO, so he will not be the target of this lawsuit in any way.
B) He did give up his citizenship for tax reasons, but not the tax reasons everyone thinks. He cannot and will not escape any taxes on money he made from the IPO, he earned those shares when he was a US citizen and will pay full taxes on them. He renounced his citizenship because he hasn't lived in the US in 4 years and was tired of paying taxes to the US for money he was making working in Singapore, which isn't that unreasonable.

Re:So that's really why he gave up his citizenship (5, Informative)

Asksa (2646127) | more than 2 years ago | (#40089095)

He renounced his citizenship because he hasn't lived in the US in 4 years and was tired of paying taxes to the US for money he was making working in Singapore, which isn't that unreasonable.

The USA is actually the only first world country that even taxes their people while they are living overseas. For example in my country you don't need to pay any taxes back home if you live in another country for more than 6 months.

Re:So that's really why he gave up his citizenship (2, Informative)

gstoddart (321705) | more than 2 years ago | (#40089145)

The USA is actually the only first world country that even taxes their people while they are living overseas.

You're going to need to back that one up. I believe Canada does the same thing.

If there's two there's probably three.

So I'm afraid I don't think what you say is true.

Re:So that's really why he gave up his citizenship (5, Funny)

Anonymous Coward | more than 2 years ago | (#40089195)

But isn't Canada just one of the states of the United States?

Re:So that's really why he gave up his citizenship (3, Funny)

i_ate_god (899684) | more than 2 years ago | (#40089229)

yeah, the one with all the money

Re:So that's really why he gave up his citizenship (5, Funny)

Anonymous Coward | more than 2 years ago | (#40089275)

And oil and water, bitches! Don't even think about comin' up here and *liberating* us.

Re:So that's really why he gave up his citizenship (0)

Anonymous Coward | more than 2 years ago | (#40089395)

Speaking for Michigan, we come in peace!

Re:So that's really why he gave up his citizenship (5, Informative)

michaelwigle (822387) | more than 2 years ago | (#40089357)

Nope, I'm a Canadian who moved to the US. I had to do dual income taxes the first year because I spent a partial year in both countries. After that, it was only US taxes. If I were to actually make income in Canada then it would be a different story, I believe, but I can make as much as I want in the US and not pay income tax to Canada.

Re:So that's really why he gave up his citizenship (4, Informative)

Sir_Sri (199544) | more than 2 years ago | (#40089381)

In canada we do not no.

You have to pay taxes on overseas income if you are canadian resident, and you have to specially disclose if you have foreign assets over 100k or some number around there. If you are a non resident in canada you still have to file income taxes on income earned in canada, which can then be dealt with through the ungodly myriad of tax treaties.

However, if you are *living* out of canada for more than 6 months you are no longer a resident, and do not pay taxes. You also are not automatically covered for health insurance.

*liviing* is important. You can spend 6 months out of canada and still be considered living in canada if you don't have a residence out of the country, and meet the criteria for strong ties within canada (and don't spend 6 months outside of canada in the same place I would presume).

As far as I know the only two countries in the world with citizenship tax are eretria and the US. (http://renunciationguide.com/Citizenship-Based-Taxation-International-Comparison.html) Although I grant that that source is a bit sketchy. Wikipedia says the same thing (that the source is sketchy and quotes the same information).

Re:So that's really why he gave up his citizenship (5, Informative)

Anonymous Coward | more than 2 years ago | (#40089437)

You're going to need to back that one up. I believe Canada does the same thing.

False. Canada taxes its residents. Canada does not tax its citizens, unless they are also residents of Canada.

Read the explanation from the Canada Revenue Agency:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html [cra-arc.gc.ca]

If you want a more detailed explanation of how your residence is determined for tax reasons, you should read Interpretation Bulletin IT-221, Determination of an Individual's Residence Status:

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html [cra-arc.gc.ca]

So I'm afraid I don't think what you say is true.

ME TOO!!!

Re:So that's really why he gave up his citizenship (0)

Anonymous Coward | more than 2 years ago | (#40089459)

You only have to pay Taxes if you are a resident.
If you plan on living for an extended period of time in another country you can declare that new country your country of residence and you no longer have to pay taxes in Canada. (It is more complex than this if your still earning a significant amount of $ in Canada)

Re:So that's really why he gave up his citizenship (-1)

Anonymous Coward | more than 2 years ago | (#40089549)

The USA is actually the only first world country that even taxes their people while they are living overseas. For example in my country you don't need to pay any taxes back home if you live in another country for more than 6 months.

No, it is not. It might be true for whatever country you are from, but the USA is not the only one that charges taxes for people living overseas. The USA does, however, give you a tax credit when you pay foreign taxes, and it's one of the few that do that.

USA taxes are incredibly low compared to just about anywhere else (obviously not EVERYWHERE else, but just about).

Re:So that's really why he gave up his citizenship (0)

kamapuaa (555446) | more than 2 years ago | (#40089553)

England does too. Love how some totally ignorant comment gets modified informative because it's vaguely anti-USA.

First post! (4, Funny)

Anonymous Coward | more than 2 years ago | (#40088847)

First! Sadly, because I got in early, I'm sure I'll lose mod points.

Re:First post! (0)

localman57 (1340533) | more than 2 years ago | (#40088875)

+1 subtle analogy.

Fuck 'em. (5, Insightful)

localman57 (1340533) | more than 2 years ago | (#40088859)

Seriously. The P/E was stupidly high before. Now, even under the revised projections, it's slightly stupidly higher. The stock was due to tank in any case. As we used to say on the playground, "NO DO-OVERS!"

Re:Fuck 'em. (5, Informative)

gstoddart (321705) | more than 2 years ago | (#40089011)

As we used to say on the playground, "NO DO-OVERS!"

Except in this case, some of the analysts were revising down their numbers just before the IPO, and there is some suspicion that the institutional investors got told one thing, and the rest of the plebes got told something else.

Sorry, but that's a violation of SEC laws, and possibly fraud. This is a little more than caveat emptor, this is failing to live up to the legal responsibilities imposed by the SEC.

Yes, the stock seemed over-valued from the get go, but there was information that it was even worse than what had been disclosed publicly. That part is illegal.

This is one of those things that serves to reinforce my belief that much of the market is a Ponzi scheme, and that an IPO is a good way to fleece investors as the big guys take their cut and then get out of it.

Re:Fuck 'em. (1)

ranton (36917) | more than 2 years ago | (#40089293)

The day before the IPO my coworkers and I were talking about it over lunch. One of our main topics of conversations was how Facebook's current revenue stream is irrelevant, since a company with a P/E over 100 (and a fairly saturated market) is obviously being traded based on potential new revenue streams (like monetizing user data). Another topic was how mobile devices do not show nearly as much advertisement, and that so many of Facebook's users are using their phones to access Facebook. So in Facebook's case, anyone thinking that this company's current revenue stream was going to grow by orders of magnitude was deluding themselves.

And we are just a bunch of software consultants, not company insiders. How is anyone going to claim ignorance on this one?

Re:Fuck 'em. (4, Funny)

msobkow (48369) | more than 2 years ago | (#40089559)

You're talking about a country where cheesecake has to carry a dairy-allergy warning and where chocolate bars that are clearly made with peanuts carry a label that they "may contain nuts."

Re:Fuck 'em. (4, Insightful)

KingSkippus (799657) | more than 2 years ago | (#40089317)

Except in this case, some of the analysts were revising down their numbers just before the IPO, and there is some suspicion that the institutional investors got told one thing, and the rest of the plebes got told something else.

Sorry, but that's a violation of SEC laws, and possibly fraud. This is a little more than caveat emptor, this is failing to live up to the legal responsibilities imposed by the SEC.

I'd agree with this when it comes to the bank, but how is this Facebook's or Mark Zuckerberg's fault?

Re:Fuck 'em. (0)

Anonymous Coward | more than 2 years ago | (#40089369)

They're going to drag the zuckster in front of Congress. That will be amusing. We'll see if his testimony is anything like his Hollywood portrayal.

Wwwaaaahhhhhhh (0, Troll)

GReaToaK_2000 (217386) | more than 2 years ago | (#40088863)

We're not making our millions off another tech IPO...

Waaahhhh!!! I want my money!!!

Re:Wwwaaaahhhhhhh (1)

Asksa (2646127) | more than 2 years ago | (#40089015)

And see what those guys are crying about - that people have started to use Facebook more via mobile phone and that Facebook actually provides good service!

It's not like they're going to carry computers with them in buses and trains anyway, it just means increased usage and therefore more active social network, which is only good. And who says you can't advertise on mobile phones? Android has a huge advertising going on.And see what those guys are crying about - that people have started to use Facebook more via mobile phone and that Facebook actually provides good service!

Re:Wwwaaaahhhhhhh (1)

zlives (2009072) | more than 2 years ago | (#40089387)

umm of course they will continue on their new d-tablet, iPad and sony NOTiPAD :)

Re:Wwwaaaahhhhhhh (-1)

mozumder (178398) | more than 2 years ago | (#40089023)

Seriously, the general public should be banned from owning stock in publicly traded companies.

Just don't even let them.

If they want to get rich, they should be limited to owning shares of corporations they started.

Limit the public's ownership options to safer investment choices, such as mutual funds and what not.

Re:Wwwaaaahhhhhhh (1)

Anonymous Coward | more than 2 years ago | (#40089413)

Ah, yes, mutual funds. That would be funds managed by people who take a largish percentage whether they make you money or lose your money. What could be a better investment than that? Hint - just about anything. Seriously, just DIY and invest in a broad index. You'll be much, much better off.

Re:Wwwaaaahhhhhhh (2)

Coisiche (2000870) | more than 2 years ago | (#40089207)

So, as I read it; those who did gain a lot of free money in the IPO will have to give some of it to those that thought they should have and the lawyers will get their usual substantial cut.

Just a slight variation on the usual IPO feeding frenzy.

Zuck is a Nigger in disguise (-1)

Anonymous Coward | more than 2 years ago | (#40088869)

All these rich Republican niggers working to the honest man down.

You rolled the dice... (4, Insightful)

Overzeetop (214511) | more than 2 years ago | (#40088885)

...they came up snake eyes. Or, perhaps a five. Either way, you didn't do your due diligence if you thought that Facebook, today, was worth 100:1 P/E ratio with a solid income track record established. Why is it that people want to sue when their bets went bad. Do you sue the track when that clean looking bay you bet to show comes in fourth because they didn't tell you he was off his feed that morning? Do you sue the casino and Nevada Gaming Commission when you don't ply well at the slots because the adjust the payouts since the last months payout percentages were posted?

Re:You rolled the dice... (1)

Moheeheeko (1682914) | more than 2 years ago | (#40088991)

Last time I checked, there wasn't any "I was misled about the odds, I want my money back" button on slot machines...maybe I should look closer, the gamblers on wall street certainly think there should be.

Re:You rolled the dice... (4, Insightful)

ClintJCL (264898) | more than 2 years ago | (#40089101)

That's because slot machines don't mislead on the odds. They have regulations and have to have specific odds - 98% payback for Vegas slots for example. They are regularly inspected to ensure that. You lose 2% playing slots in the long run, basically. The odds are known. They aren't presented as different numbers than they actually are, and are public knowledge for all casinos.

Re:You rolled the dice... (0)

Anonymous Coward | more than 2 years ago | (#40089237)

That's because slot machines don't mislead on the odds. They have regulations and have to have specific odds - 98% payback for Vegas slots for example. They are regularly inspected to ensure that. You lose 2% playing slots in the long run, basically. The odds are known. They aren't presented as different numbers than they actually are, and are public knowledge for all casinos.

You sure seem to know a lot about loose slots...

Re:You rolled the dice... (2)

zlives (2009072) | more than 2 years ago | (#40089441)

here is hoping - FB is too big to fail - ;)

Re:You rolled the dice... (1)

tgd (2822) | more than 2 years ago | (#40089557)

That's because slot machines don't mislead on the odds. They have regulations and have to have specific odds - 98% payback for Vegas slots for example. They are regularly inspected to ensure that. You lose 2% playing slots in the long run, basically. The odds are known. They aren't presented as different numbers than they actually are, and are public knowledge for all casinos.

Not to nit, but 98% is unheard of in Vegas. CT requires close to that, in aggregate, but Vegas is WAY less than that. (Its been a while since I looked, but IIRC it was in the 70%'s.)

Re:You rolled the dice... (1)

MozeeToby (1163751) | more than 2 years ago | (#40089209)

You do realize just how many laws apply to slot machines right? And how many people are involved in verifying that they're following those laws? And how often they are inspected? And how severely punished everyone involved in it would be if fraud were discovered? And that even beyond the criminal punishments they'd be liable for lawsuits from everyone who played the fraudulent machines?

Your analogy is as full of fail as it could possibly be.

Re:You rolled the dice... (1)

TheRaven64 (641858) | more than 2 years ago | (#40089343)

Yes there is. Slot machines (at least around here) have to publish their payout ratio. If they pay out less than the amount stated on the machine, then the operator is liable for large fines.

Re:You rolled the dice... (2, Funny)

cpu6502 (1960974) | more than 2 years ago | (#40089041)

I took the wrong approach.

I invested ~$500 on BNBN (barnesandnoble.com) and it went bankrupt in 2002... I was paid back about $100. I just shrugged my shoulders and said "Oh well" but clearly I took the wrong approach. I should have sued instead!

(1) Invest in stock
(2) Lose money.
(3) Sue.
(4) Talk to congressman about unfairness.
(5) Hand him some cash.
(6) Get bailout from taxpayers.
(7) $profit

Re:You rolled the dice... (3, Insightful)

CanHasDIY (1672858) | more than 2 years ago | (#40089245)

Did top-level BNBN execs share insider details with Bigs that they withheld from Smalls like yourself? If so, you should have sued, it would have been perfectly legitimate. Insider trading is a crime.

If not, then what happened to you and what's happening now are two completely different circumstances... unless I'm reading the plaintiff's complaint incorrectly? From TFA:

The plaintiffs charge that the changes to the forecast by several underwriters of the IPO were only "selectively disclosed" to a small group of preferred investors and not to the investment community at large.

Re:You rolled the dice... (1)

tnk1 (899206) | more than 2 years ago | (#40089281)

Only works if they don't expect to go bankrupt. You can't get crap out of anyone who has gone bankrupt.

You can sue FB because it is actually worth money today, and is not (yet) heading to bankruptcy. BNBN? You never had a chance unless you sued them like a week after their IPO.

Re:You rolled the dice... (5, Insightful)

gstoddart (321705) | more than 2 years ago | (#40089311)

Seriously, RTFA:

The plaintiffs charge that the changes to the forecast by several underwriters of the IPO were only "selectively disclosed" to a small group of preferred investors and not to the investment community at large.

So, Wall Street got told one set of numbers, and everyone else got told another set.

There were two classes of buyers (it is claimed) -- those who were given the actual estimates, and the rest of us.

A report from well-known Wall Street watcher Henry Blodget, citing an unnamed source, posits that a Facebook executive was responsible for telling institutional investors, but not smaller investors, about the reduction in revenue estimates.

So, that would be illegal according to SEC rules.

If all of this information had been made public, and the people lost their money (like some of us expected they would), that would be one thing. But in this case, there was some material omissions.

That's illegal. (At least, if there actually were two different sets of numbers provided to investors.)

Facebook was overvalued, that's true. But it was likely even more overvalued than most were led to believe, which means the institutional investors had an unfair advantage in selling it off to the suckers -- they knew just how much more overvalued it really was. They got to short the stock for free basically.

Re:You rolled the dice... (3, Insightful)

SydShamino (547793) | more than 2 years ago | (#40089377)

If insiders knew the company was going to go bankrupt the day they sold you stock (for $500) - e.g. they knew it was about to lose value but they sold anyway - then yes you should sue.

Equal information is required for both parties in a transaction or else the market isn't free. If you oppose this - and the underlying regulation it requires - then basically you support fraud - since that's the alternative.

(1) Buy "gas" at a gas station.
(2) Engine seizes because "gas" was 50% water.
(3) Shrug and say "oh well, that's the cost of doing business without regulation".???

Re:You rolled the dice... (0)

Anonymous Coward | more than 2 years ago | (#40089077)

...they came up snake eyes. Or, perhaps a five. Either way, you didn't do your due diligence if you thought that Facebook, today, was worth 100:1 P/E ratio with a solid income track record established. Why is it that people want to sue when their bets went bad. Do you sue the track when that clean looking bay you bet to show comes in fourth because they didn't tell you he was off his feed that morning? Do you sue the casino and Nevada Gaming Commission when you don't ply well at the slots because the adjust the payouts since the last months payout percentages were posted?

No, but you do sue if the odds were deliberately misstated to everyone but the friends of the owner and you do sue if the machine had no money inside when the owner of the casino recommended that particular machine.

Re:You rolled the dice... (5, Insightful)

Anonymous Coward | more than 2 years ago | (#40089127)

There is real reason to sue. Partway through the roadshow a facebook exec (an insider) told analysts to dial back earnings growth estimates (provided insider information). This last-minute insider information was made available to institutional buyers of the IPO, but not to the retail buyers. The institutional buyers coalesced around a buy price of 32 dollars, while the retail buyers came in at 40 dollars. Now, post IPO facebook has stopped falling, hovering at, you guessed it, very near 32. The retail investors got screwed, likely illegally.

details here [businessinsider.com]

Re:You rolled the dice... (1)

TheDarkMaster (1292526) | more than 2 years ago | (#40089137)

Is the "new capitalism": Maximum profit in any situation, zero risk.

You and I know that capitalism does not work that way, but these assholes are living in an alternate reality where there is no logic or reason, only just blind greed.

Re:You rolled the dice... (3, Insightful)

bjourne (1034822) | more than 2 years ago | (#40089139)

Most of us didn't roll any dice at all, but had a third party buy useless Facebook shares for us. All OECD countries put their retirement funds on the stock market (which is total insanity but what can you do?). Idiots managing those funds then thought it was a gansta good idea to get in early on the fb action. If there was relevant information not relayed to them but to other investors then that is equivalent to insider trading. A textbook example of capitalism forcing everyone to play the same game (on the stock market) but then giving some superior rules.

Re:You rolled the dice... (1)

MozeeToby (1163751) | more than 2 years ago | (#40089179)

If the company is hiding information there's no way for investors to do their due diligence. I think we all know Facebook stock was/is overvalued, that doesn't mean you get to hide your real earnings forecasts from potential investors in the days leading up to your IPO.

Re:You rolled the dice... (0)

Anonymous Coward | more than 2 years ago | (#40089197)

Do you sue the casino and Nevada Gaming Commission when you don't ply well at the slots because the adjust the payouts since the last months payout percentages were posted?

If you mean that the machine was paying out less than advertising, then yes, that's a false statement and (IANAL) reasonable grounds for a suit, dont you think? It's not that people took risk in the market or speculated wrong and lost. We can all agree that's not grounds for a suit. It's that a group of insiders were told it was worth less. That's like cheating at cards or something. I know you can go to prison for cheating in Nevada. I bet you can be sued too (no pun intended).

Re:You rolled the dice... (1)

Anne_Nonymous (313852) | more than 2 years ago | (#40089295)

This is not about the investors. This is about the lawyers.

What is there to hide? (-1)

wisnoskij (1206448) | more than 2 years ago | (#40088897)

It is got that complicated of a company.

Re:What is there to hide? (0)

arkane1234 (457605) | more than 2 years ago | (#40089059)

WTF? First people completely forget to type in key words to their sentences, now people type completely WRONG words in their sentences?
'it is got that complicated of a company"? seriously?

Re:What is there to hide? (0)

Anonymous Coward | more than 2 years ago | (#40089243)

What said postings initiate from serving partly broken facebook man big bad wolf

Re:What is there to hide? (0)

Khyber (864651) | more than 2 years ago | (#40089279)

Look at your keyboard.

G is rather close to N.

Got = not.

Not very hard to see, is it?

Re:What is there to hide? (2)

Eponymous Hero (2090636) | more than 2 years ago | (#40089597)

you missed the got=not typo. heil grammar!

Is this a surprise to anyone? (1)

Anonymous Coward | more than 2 years ago | (#40088905)

Deception, lies, and broken trust ... oh wait, that was *just* in the movie. Uh huh.

who didn't know about this? (5, Informative)

shadowrat (1069614) | more than 2 years ago | (#40088909)

The suit alleges that only big time investors were apprised that rising use of mobile would affect revenue. This was known to everyone weeks ago, well before the IPO. here's an article from a week prior to the IPO all about the mobile risks

http://www.telegraph.co.uk/technology/facebook/9257232/Facebook-issues-revenue-warning-over-mobile-growth.html [telegraph.co.uk]

Re:who didn't know about this? (1)

Zocalo (252965) | more than 2 years ago | (#40089115)

Clearly the small time investors that didn't do their due diligence or were blinded by the (pipe) dream of a short term investment with a huge payout didn't know about it. You can't help but laugh at their lack of financial accumen really, first they throw money at an fairly obviously over-valued and over-hyped IPO, now they are going to throw even more money down the pit at lawyers on what looks very much like a fruitless case. The best result I suspect that they are going to get is that Facebook will have spend a small fraction of the money that they raised through the IPO at another bunch of lawyers to defend themselves. Frankly, with the Telegraph article as Exhibit A, Facebook could probably go with the most lame of public defenders and still get the case thrown out on day one.

So (1, Insightful)

JWW (79176) | more than 2 years ago | (#40088921)

All the whiny crybabies that got suckered into buying this stinker of a stock now want their losses covered?

Due diligence isn't just a cool sounding term. If you're an investor you've got to assume they're painting a rosy picture to try an convince people to invest. It's your responsibility to figure out if the story is too good to be true.

As trivial as it was to figure out that the Facebook IPO was a ruse, these plaintiffs deserve to have their case thrown out of court.

Re:So (0)

Loughla (2531696) | more than 2 years ago | (#40089027)

If you're an investor you've got to assume they're painting a rosy picture to try an convince people to invest. It's your responsibility to figure out if the story is too good to be true.

EX-FUCKING-ACTLY. If you are going to invest money in anything, you have to assume that the other person is at least lying a bit. Maybe not a lot, but a bit. It's up to you to look at as many sources as you have available to you to figure out the real picture. If you only go off of the word of the person you’re buying from, you’re an idiot (and that applies to anything in the world from toilet paper to your stock portfolio).

For example: when you purchase a new car, do you just walk in and say, “Gee, that looks shiny, and I'm sure the salesman is telling me the truth. SOLD!” or, do you research first, test-drive, research some more, then buy the shiny one?

Re:So (5, Informative)

jrminter (1123885) | more than 2 years ago | (#40089615)

Not quite that simple. The complaint is that revenue projections were selectively disclosed to insiders. That is a violation of SEC regulations.

Couldn't have happened... (1, Insightful)

undulato (2146486) | more than 2 years ago | (#40088923)

...to a nicer guy.

Oooohhh (0)

Loughla (2531696) | more than 2 years ago | (#40088929)

For Fucks sake folks. You bet on an intangible product that overvalues itself (based on what I've read), spend BILLIONS on it, and are surprised when the people receiving the BILLIONS are trying to make as much money as possible, even if it's unscrupulous?

And before I'm called for hating facebook (which I do) - I don't care what the company is; if it produces an intangible entertainment service that can be replaced at the drop of a hat, based on mass will and crowd decision making, it isn't worth b-b-b-b-billions of dollars.

Re:Oooohhh (1)

phantomfive (622387) | more than 2 years ago | (#40089347)

If you could sue facebook and make $1million, wouldn't you do it? I know I sure would.

if it produces an intangible entertainment service that can be replaced at the drop of a hat, based on mass will and crowd decision making, it isn't worth b-b-b-b-billions of dollars.

They made something like $1billion in profit last year, so they could well be worth billions, even if that gravy train only lasts for a few years. Not $100billion, but a few billion, sure.

What would Buffett do? (-1, Offtopic)

cpu6502 (1960974) | more than 2 years ago | (#40088937)

$profit.

He'll probably buy the Facebook shares when they hit bottom. And the law Buffett wants passed would Not fix the "I paid less taxes than my secretary" problem. It raises the rates on rich person's income tax to around 90%...... but Buffett has almost no income. It's almost all capital gains which has a rate of around 25% and will not change under the Buffett Rule.

So basically he's trying to hurt people who work for a living (get paid wages & taxed at 80-90%) while he himself remains untouched. He's trying to secure his oligarchy as one of the richest men. IF the man was genuinely concerned, he'd ask the capital gains tax to be raised higher but of course he'll never do that, because the man is a shrewd investor..... he knows exactly how to look good but not pay any more tax.

Re:What would Buffett do? (3, Insightful)

PolygamousRanchKid (1290638) | more than 2 years ago | (#40089029)

No, Buffet has clearly stated that he will not buy stock in a company, if he does not know how they make money. That is why he stayed away from .com stocks when they were red hot.

In the long run, he strategy has worked out well for him and his investors.

Re:What would Buffett do? (1)

cpu6502 (1960974) | more than 2 years ago | (#40089319)

Oh well... good for him. He also invested heavily in several investment (gambling) banks in 2008. He probably knew in advance that they would get bailed out by the taxpayers. Buffett's a bit of a creep.

Re:What would Buffett do? (0)

Anonymous Coward | more than 2 years ago | (#40089093)

Buffet won't buy Facebook.
He only buys what he understands, that's why it's insurance companies and simple companies.

As a rule he doesn't understand tech, he doesn't buy tech.

Facebook = a con game from the start. (1)

Anonymous Coward | more than 2 years ago | (#40088969)

Anyone who trusted Zuckerberg or believed Facebook could possibly be worthy
of investment deserves to be screwed.

It's called a life lesson. Take it and learn that your own stupidity can and will
have painful results.

Which shareholders? (1)

realisticradical (969181) | more than 2 years ago | (#40088971)

Wait, the current shareholders? Like the guys who bought the company last week? They're already suing the company?

Ok, Clearly we need to get a legion of armchair lawyers on this one. How can you have standing to sue the company if the alleged thing happened before you were a shareholder?

Re:Which shareholders? (4, Insightful)

ClintJCL (264898) | more than 2 years ago | (#40089125)

Because they revised their numbers before the IPO, but didn't give those revisions to the people buying it. That's fraud in some peoples' minds. It's mis-representing. It's not buyer beware, it's give buyer something different than you said you were giving them. Your standing is being sold something on false pretenses.

I still don't get it. (1)

wcrowe (94389) | more than 2 years ago | (#40089017)

One of the reasons I left Facebook is because I tried FB mobile and it was a complete waste of time. Not to mention the fact that it increases your bandwidth usage, which you have to pay for, without any corresponding benefit. The entire online experience is going mobile now, and they haven't figured out how to monetize it. What I don't get is why FB is valued so high (74 times its earnings, IIRC). Perhaps they know they have a problem and are basically cashing in and getting out, while the gettin' is good.

Re:I still don't get it. (1)

imbusy (1002705) | more than 2 years ago | (#40089153)

Perhaps they know they have a problem and are basically cashing in and getting out, while the gettin' is good.

That's exactly what I'm thinking. I just can't believe how many people have been mislead into buying this stock. Well, at least it frees up the money of the investors so they can invest in some other companies.

Oh boo hoo (1)

Viol8 (599362) | more than 2 years ago | (#40089031)

As one commentator said - "muppet bait".

No sane person/coporation who didn't have their own agenda (hello banks) would value a social chit chat and picture website at 100 billion. And only an idiot would believe it and the shares were worth it

Re:Oh boo hoo (1)

the eric conspiracy (20178) | more than 2 years ago | (#40089365)

Evidently PT Barnum underestimated the sucker birth rate.

Re:Oh boo hoo (-1)

bonch (38532) | more than 2 years ago | (#40089405)

I agree Facebook was way overpriced, but I wouldn't dismiss it as a "social chit chat and picture website". It has replaced email and even the web for many people. Its value is in advertising, and Zuckerberg's goal is to replace Google as the internet's #1 advertiser. One of Facebook's problems is that mobile advertising doesn't perform as well as web advertising (which itself is on a downward trend), which is why they lowered their revenue forecast.

It's going down (1)

Anonymous Coward | more than 2 years ago | (#40089067)

I read the real prize of FB stock is about 10 USD. Then, what do economists know. It's not a science, but more like astrology.

Idiots (0)

Anonymous Coward | more than 2 years ago | (#40089081)

Honestly how did anyone not see this coming? More and more major companies were starting to drop facebook as a platform for advertising, ie: GM.

Almost back down (1)

randomErr (172078) | more than 2 years ago | (#40089089)

Facebook stock almost back down to it's opening price [google.com] this morning. I look for it's stock to hit a floor of around $10 in the next 3-6 months.

Faddish (1)

pubwvj (1045960) | more than 2 years ago | (#40089109)

FB is a fad. It's too closed. Too constrained. Too inconvenient. Email and blogs are better.

Re:Faddish (0)

Anonymous Coward | more than 2 years ago | (#40089271)

Nobody wants to deal with email anymore. It's stupidly complex to set up for what it is and has an archaic interface. And nobody reads blogs but techies and hipsters.

I bet you think smartphones and tablets are a fad too and that desktop PCs will make a comeback. Keep dreaming that dream, brother.

Deleted my account ... (1)

Anonymous Coward | more than 2 years ago | (#40089157)

... the day before the IPO.

This is going to get messy and the only asset Facebook has is its user data.

You do the math.

Re:Deleted my account ... (2, Insightful)

Anonymous Coward | more than 2 years ago | (#40089353)

The math says your data is still there... you simply can't access it any more.

Re:Deleted my account ... (0)

Anonymous Coward | more than 2 years ago | (#40089525)

Are you trying to tell me that my 317 FB accounts are not worth anything? I spent a lot of time cultivating them so they look solid :(

Lost some on the races today (2)

Hentes (2461350) | more than 2 years ago | (#40089189)

I'm gonna sue that fucking horse!

Mobile is the right way (0)

Anonymous Coward | more than 2 years ago | (#40089203)

1) Agreed, their valuation was ridiculous from the outset, no doubt.

but

2) Mobile is how they'll eventually capture their advertising dollars. It is WAY too easy for mainstream users to successfully block ads today on desktop browsers. Mobile is much easier to force ads to actually appear.

The shift to mobile definitely -lowers- the value of those ads, but, it also locks in their display much more effectively for the vast majority of users. So in the end the mobile shift is a requirement for service like FB. This means they aren't worth as much right now, but in the future they are more likely to lock in their price and grow it.

Re:Mobile is the right way (1)

wcrowe (94389) | more than 2 years ago | (#40089481)

Perhaps, but the thing that has bothered me about that is that you now have to pay for your bandwidth usage. Who wants their bandwidth sucked up with ads?

I am reminded of what happened 20 years ago with IBM's online service, Prodigy [wikipedia.org] . I remember giving it a try, but you had to pay for it by the amount of time you spent on it. It was monetized by offering ads, but at 2400 baud, watching ads slowly download, sucking up your online time, was painful. The last straw for me was when I had to wait about five minutes for an animated Volkswagen ad to download -- on my dime. I canceled the service immediately. Mobile FB users will feel the same frustration if they have to pay for the privilege of sitting through ads.

FB was heavily restricted on shorting too (0)

Anonymous Coward | more than 2 years ago | (#40089215)

Not that I would have been bold enough to short the biggest social transformation in recent history, but shares for shorting were really not available until today according to indicators on my trading interface. To me this means that real shares were being sold by real share owners who were scrambling to cut their losses or at least liquidate. There is no conspiracy here, just a hype machine and some fools. The market will find a value for FB if you give it an honest chance.

Comments here (1)

koan (80826) | more than 2 years ago | (#40089217)

Saying the investors deserve to get screwed because they didn't do their "due diligence". and in some ways that is fair, it's also a large part of the housing bubble that led to a complete economic collapse as people were buying houses at absurd prices with no money down and variable interest rate loans.

So essentially the same people that want to get a fast buck and not doing the foot work to fully understand what they are getting into.

You can blame the guys the set the bear trap all you want, and personally I think we should bring back the guillotine, but you have to consider the average persons inability/stupidity to do the math and understand the issues are really the main problem.

If they had been smart enough they wouldn't have bought the houses or the stock.

Why you should never go public (0)

Anonymous Coward | more than 2 years ago | (#40089305)

The increased regulation, litigation and process tends to turn companies to shit. The only reason most companies that don't otherwise suck to begin with go public is an overabundance of greed.

Regardless of disclosure laws if you think a greedy company will parade its dirty laundry in the public for all to see without lies and distortion you might be interested in some prime realestate in Florida I'm offering for pennies on the dollar.

Dumb (1)

the eric conspiracy (20178) | more than 2 years ago | (#40089457)

1. Find people dumb enough to buy an IPO opening day.
2. Pump up useless social media company
3. Issue stock
4. PROFIT!!!!!!

Can I say: DIE FACEBOOK! (0)

Anonymous Coward | more than 2 years ago | (#40089497)

DIE! DIE! DIEEEE!

It’s the beginning of the end, I tell ya. :)

P/E Ratio of 100 (0)

Anonymous Coward | more than 2 years ago | (#40089513)

If you buy that shit it's your own fault for being stupid. Regulations are important but in this case you don't need to be an SEC investigator to know the stocks a turd.

A fool and his money (1)

biodata (1981610) | more than 2 years ago | (#40089539)

are easily parted.

I wsh there was an ETF for law firms (3, Insightful)

peter303 (12292) | more than 2 years ago | (#40089601)

They seem to always get a piece of the action.

fool me twice, shame on me (3, Insightful)

Eponymous Hero (2090636) | more than 2 years ago | (#40089659)

everyone saw how he made the company by stabbing the people closest to him in the back. what did you think he was going to do with the IPO?

Facebook is the new AOL (0)

Anonymous Coward | more than 2 years ago | (#40089667)

A shitty pseudo-internet for tweens and tards.

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