TheAristocrat
Footballguy
Whomever is buying this dog, why don't you just give me your money and in ten weeks I'll give you half of it back?
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Facebook IPO thread (1 Viewer)
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SacramentoBob
Footballguy
Give me your money and I'll give 49.5% to Aristocrat and 49.5% back to you in ten weeks.
Gopher State
Footballguy
The stock closed Tuesday at $28.84, dropping $3.07 for the day. It is down 24% from its IPO price.
BobbyLayne
Footballguy
Email I received from my advisor today:
BobbyLayne,
Unfortunately, lost in too much of the "dramatic" coverage of the Facebook IPO has been the real lessons to be learned for those interested in successful technology and growth company investing.
Part of the confusion is understandable. An IPO is a purposely dramatic event - made so by Wall Street needing both to justify fees and to "arouse" investors from their varying states of boredom, apathy, discouragement, and distraction.
And for a uniquely high profile deal like Facebook, the media also plays a less than "innocent" role.
Let's call this the Oprah Winfrey Network effect - or the idea that a good majority of the public just isn't all that interested in hearing the "mom, peaches and cream" Mark Zuckerberg success story over and over again.
Rather, tales of trading "irregularities" and of the "little guy" being taken advantage of by "big banks" makes strangely addictive and popular TV viewing and blogging and tweeting.
And, as long as we recognize it for what it is, a classic "bread and circus" distraction, a little bit of is mostly harmless.
But, when it rises to a level where this is where most of the coverage is focused, well that is both a problem and a huge lost opportunity to communicate the essence of value and wealth creation in a capitalistic economy.
It is that the value of a company is solely based on the quality and quantity of its future growth prospects.
This is what has been playing itself in the mostly downward gyrations of Facebook stock since its IPO - sophisticated reviewers deeply questioning whether the company can fulfill on its insanely high growth expectations.
So high, in fact, that for investors in at the IPO price to realize even a market rate of return that Facebook's future growth expectations will have to be such as to value the company greater than that of any company in the history of the world.
This, of course seems like way too tall a mountain for any company to climb, to say nothing of one majority managed and controlled by a very bright but also very inexperienced 28-year-old.
From this perspective, the central investment lesson of the Facebook IPO should be that earning alpha returns requires identifying and investing in companies that are priced below their true growth expectations.
Now, most unbiased observers - i.e. those not making markets in or commissions on trading stocks - argue almost unrefutedly that doing so is impossible in a high profile, high valuation stock like Facebook.
And that the same can be said for virtually any public company part of a major index - Dow, S&P, NASDAQ 100, etc.
Luckily however, there is now a wide, deep, and increasingly liquid world of investable companies that can be bought at prices below "true" expectations.
They exist within the legion of start-up, small business and middle market companies that make up the beating heart of entrepreneurial America.
Once, a long time ago (in terms of development, if not years) Facebook was one of these companies.
And those that invested in it then made returns beyond any and all expectations.
This, identifying and investing in companies with growth prospects to the moon but priced only to go to the corner market, is the game worth playing, isn't it?
Hard to do? Of course.
But as the story of Facebook's dramatic rise should teach us so well, far from impossible.
To Your Success,
Jay
BobbyLayne,
Unfortunately, lost in too much of the "dramatic" coverage of the Facebook IPO has been the real lessons to be learned for those interested in successful technology and growth company investing.
Part of the confusion is understandable. An IPO is a purposely dramatic event - made so by Wall Street needing both to justify fees and to "arouse" investors from their varying states of boredom, apathy, discouragement, and distraction.
And for a uniquely high profile deal like Facebook, the media also plays a less than "innocent" role.
Let's call this the Oprah Winfrey Network effect - or the idea that a good majority of the public just isn't all that interested in hearing the "mom, peaches and cream" Mark Zuckerberg success story over and over again.
Rather, tales of trading "irregularities" and of the "little guy" being taken advantage of by "big banks" makes strangely addictive and popular TV viewing and blogging and tweeting.
And, as long as we recognize it for what it is, a classic "bread and circus" distraction, a little bit of is mostly harmless.
But, when it rises to a level where this is where most of the coverage is focused, well that is both a problem and a huge lost opportunity to communicate the essence of value and wealth creation in a capitalistic economy.
It is that the value of a company is solely based on the quality and quantity of its future growth prospects.
This is what has been playing itself in the mostly downward gyrations of Facebook stock since its IPO - sophisticated reviewers deeply questioning whether the company can fulfill on its insanely high growth expectations.
So high, in fact, that for investors in at the IPO price to realize even a market rate of return that Facebook's future growth expectations will have to be such as to value the company greater than that of any company in the history of the world.
This, of course seems like way too tall a mountain for any company to climb, to say nothing of one majority managed and controlled by a very bright but also very inexperienced 28-year-old.
From this perspective, the central investment lesson of the Facebook IPO should be that earning alpha returns requires identifying and investing in companies that are priced below their true growth expectations.
Now, most unbiased observers - i.e. those not making markets in or commissions on trading stocks - argue almost unrefutedly that doing so is impossible in a high profile, high valuation stock like Facebook.
And that the same can be said for virtually any public company part of a major index - Dow, S&P, NASDAQ 100, etc.
Luckily however, there is now a wide, deep, and increasingly liquid world of investable companies that can be bought at prices below "true" expectations.
They exist within the legion of start-up, small business and middle market companies that make up the beating heart of entrepreneurial America.
Once, a long time ago (in terms of development, if not years) Facebook was one of these companies.
And those that invested in it then made returns beyond any and all expectations.
This, identifying and investing in companies with growth prospects to the moon but priced only to go to the corner market, is the game worth playing, isn't it?
Hard to do? Of course.
But as the story of Facebook's dramatic rise should teach us so well, far from impossible.
To Your Success,
Jay
Because, this is not about giving money away. It is about small losses for potentially larger returns. I have no problem risking $35K of a $100K investment if the upside is worth the risk. Sure 35% could seem like a large amount, but if it is only a sliver of a portfolio is it not worth the risk?Large tech companies have not disappointing me this decade. GOOG, EMC, IBM, and AAPL have all performed great for me. Sure, there have been a few missteps or early sells, but I got lucky moving out of energy into tech at the right time. FB might in the end prove to be a loser, but a small risk for such a powerhouse is worth it. I think this stock will perform very well long term.
TheAristocrat
Footballguy
I wager that my investment "opportunity" is a better offer.I wish you the best of luck. I'm thinking that a 25% loss might be the best return you could expect from FB (if you bought in the $30s). There's a myriad of issues on the horizon that doom this stock. Not that it won't EVER be a good investment, its just so far from it right now that I do not see the value.Just one flawed man's opinion.
I don't claim to not be flawed either and I don't wave my opinions around like I do. But I am okay losing on this long term, because I think it will be fine, long term. That is why I bought at 38, 33.50, 28.75 and will probably also buy at 24, 20 and 16 if it keep dropping. It will find a point of stability and eventually rise, my view is that it will perform well over time.
St. Louis Bob
Footballguy
If it gets in the teens, I'll take a shot.ETAAlso, the hourly radio news reports what FB stock is doing every hour, on the hour. Stop it.
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TheAristocrat
Footballguy
"One flawed man's opinion" wasn't a shot at you in the least. I like making fun of myself and it wasn't meant in any other way.But like I said above, I do wish you the best. I'd rather you make boatloads and rub that in my face later in this thread. :cheers:
Sorry, I didn't mean to imply that it was, I knew what you meant.
Cliff Clavin
Footballguy
Pay to promote feature now live
Dumb attempted money grab IMO. Stuff like this is going to be its demise.
Dumb attempted money grab IMO. Stuff like this is going to be its demise.
audiophile
Footballguy
It IS interesting that FB is basically holding steady (+.06 when i last checked) when both the Dow and the Nasdaq are trending down. I'm not sure how to interpret that, quite honestly. That said, I still think that it will end the day lower than it started.
urbanhack
Fight The Power!
In related news.....
http://allthingsd.com/20120529/salesforce-set-to-snap-up-facebook-friend-buddy-media-for-more-than-800-million/
So here's a company that built their business by leveraging the Facebook platform and they are worth 800 million. Wow.
http://allthingsd.com/20120529/salesforce-set-to-snap-up-facebook-friend-buddy-media-for-more-than-800-million/
So here's a company that built their business by leveraging the Facebook platform and they are worth 800 million. Wow.
tommyGunZ
Footballguy
Doesn't this type of analysis ignore opportunity costs? Like the fact that had you waited to buy at 28 instead of 38, 33, and 29, you'd be able to purchase an additional ~ 20% stake with the same 100k investment? Obviously hindsight is 20/20, but isn't it better to just say "Yeah, hopefully I'll be okay long term but I sure wish I had waited 2 weeks" instead of rationalizing poor timing?
CrapOnChest.Com was a bust. I don't even know if that company is still around.
Rick James
Footballguy
TheDentist would know.
He is not just the President, he is a customer.
Top 5 and Worst 5 IPOs since 2000
Worst
1. MF Global Holdings -99.2% since IPO
2. Semiconductor Man. Corp (SMI) -86.3%
3. MetroPCS Communications -70.7%
4. Och-Zif Capital -64%
5. Genworth Financial -63.3%
Best
1. CNOOC +1325%
2. MasterCard +971%
3. PetroChina +925%
4. Google +610%
5. ChinaLife +486%
Worst
1. MF Global Holdings -99.2% since IPO
2. Semiconductor Man. Corp (SMI) -86.3%
3. MetroPCS Communications -70.7%
4. Och-Zif Capital -64%
5. Genworth Financial -63.3%
Best
1. CNOOC +1325%
2. MasterCard +971%
3. PetroChina +925%
4. Google +610%
5. ChinaLife +486%
Dr. No
Footballguy
thanks - cool list
i don't think facebook can beat MF global.. did they just come public recently?
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bicycle_seat_sniffer
Smells like chicken
Still hold some of my original Mastercard position. Man what a winner that was. Wonder why Visa isnt performing as well
RUSF18
Footballguy
2007.
Visa IPO'd at a much higher valuation.
joffer
Footballguy
another casualty of John Corzine
I don't view it as rationalizing poor timing, I just would rather spend my work day posting here rather than watching stocks all day ;-)
TheAristocrat
Footballguy
I'll say it ends today at $25.86.
Short Corner
Footballguy
In for 100 $25 puts w. 6/15 expiry for $44
culdeus
Footballguy
:mansion:
Abraham
Footballguy
Can you explain how that works? I always struggle to understand puts and short selling.
culdeus
Footballguy
He paid 44 dollars for the right to sell 100 shares of FB at 25 dollars somewhere between now and 6/15.
Abraham
Footballguy
culdeus
Footballguy
yup.
Ned
Footballguy
David Dodds
Administrator
wow what a nice rally. Loving the volatility on this stock (been able to buy and sell to get good averaging). I still think people are grossly under-estimating the profit potential of a website with 700M+ user accounts. They could become the Streaming giant overnight (or similar). Buying Face.com (Face recognition software) Instagram (pics) and a host of other powerful companies. In 2 years, these prices are going to look EXTREMELY cheap.
the next big frontier is monetizing mobile content. FB acknowledges it has no idea how (or if) it will do that.Yahoo------->Google--------->Facebook--------->?Yahoo won the battle as the top portal site, but could not match Google into the next phase of the internet - search, and Google has been no match for Facebook when it comes to Social. Its unlikely that any of them will be the dominant player in mobile in the next 5-7 years.
culdeus
Footballguy
Apple is not helping them either. Still no true facebook app they will sign on to. To my knowledge the only one Facebook ever got total control of was WebOs, lol. Google and Apple aren't so stupid to let them basically eat their phones from the inside.
culdeus
Footballguy
I still fail to see what would be in it for Apple to go this route. They lose ecosystem control at the top level which up to this point they've done everything in their power to lock down. They have more money than god, and their users would be better for it to not have FB integration (but they likely don't know this).
shader
Footballguy
I think the problem is that there isn't anything close to 700 million user accounts.Between duplicate accounts and spam accounts, I'd say at LEAST half of the accounts are fake.
urbanhack
Fight The Power!
I've always argued this. Don't forget the people who signed up one time to appease a friend or a relative only to never log on again.
tommyGunZ
Footballguy
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