Facebook IPO thread (1 Viewer)

[bagger]

Seems like this is crazy expensive from a PE perspective. especially when I don't see how much long term value a site like this has that can easily be replaced by the next big thing.Maybe a year plus from now when everything settles I will re look at it but this just seems like gambling at this point.

I agree with your gambling point, but I disagree with the easily replaced point...Facebook's move to the timeline layout was honestly ingenious...simply because it put the "history" that is on facebook in perspective. I was clicking back through my timeline, and I got to 2007, when I first joined. I found the entry where my wife and I became facebook friends. I could go back and read status updates from a much earlier time that reminded me of things that I had forgotten about. It really made facebook not only a social media outlet for your current life, but also a chronological record of your past as well...that's not easy to just walk away from. I think that it won't be as easy to switch to the next big thing as it was for Myspace because facebook has history.

I fully admit as a non Facebook user you could be totally right. I don't get Facebook. I have never used it and likely never will. That timeline feature does sound cool to users for the reasons you state above. I don't know what is the Facebook killer, and there may not be one for years, I just see this technology changing so rapidly as well as kids using this and realizing consequences for lives being made so public in the workplace and college applications I feel there will be an eventual pendulum swing in the attitude of sites like this.Then again at 37 maybe I am an old man who doesn't get it and this is the first of many technologies that are amazing that I just don't get.

 

[moderated]

Seems like this is crazy expensive from a PE perspective. especially when I don't see how much long term value a site like this has that can easily be replaced by the next big thing.Maybe a year plus from now when everything settles I will re look at it but this just seems like gambling at this point.

I agree with your gambling point, but I disagree with the easily replaced point...Facebook's move to the timeline layout was honestly ingenious...simply because it put the "history" that is on facebook in perspective. I was clicking back through my timeline, and I got to 2007, when I first joined. I found the entry where my wife and I became facebook friends. I could go back and read status updates from a much earlier time that reminded me of things that I had forgotten about. It really made facebook not only a social media outlet for your current life, but also a chronological record of your past as well...that's not easy to just walk away from. I think that it won't be as easy to switch to the next big thing as it was for Myspace because facebook has history.

I fully admit as a non Facebook user you could be totally right. I don't get Facebook. I have never used it and likely never will. That timeline feature does sound cool to users for the reasons you state above. I don't know what is the Facebook killer, and there may not be one for years, I just see this technology changing so rapidly as well as kids using this and realizing consequences for lives being made so public in the workplace and college applications I feel there will be an eventual pendulum swing in the attitude of sites like this.Then again at 37 maybe I am an old man who doesn't get it and this is the first of many technologies that are amazing that I just don't get.

also i think men quit using facebook much after the first couple months when they have facebook stalked all the girls they know or once knew. after yanking it to all the girls pictures they always wanted to hook up with the interest wanes.For woman i think it's a lot more popular as they like to communicate and post things about their lives that no one cares about.

 

[Major]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

 

[Apple Jack]

Seems like this is crazy expensive from a PE perspective. especially when I don't see how much long term value a site like this has that can easily be replaced by the next big thing.

Maybe a year plus from now when everything settles I will re look at it but this just seems like gambling at this point.

I agree with your gambling point, but I disagree with the easily replaced point...

Facebook's move to the timeline layout was honestly ingenious...simply because it put the "history" that is on facebook in perspective. I was clicking back through my timeline, and I got to 2007, when I first joined. I found the entry where my wife and I became facebook friends. I could go back and read status updates from a much earlier time that reminded me of things that I had forgotten about. It really made facebook not only a social media outlet for your current life, but also a chronological record of your past as well...that's not easy to just walk away from. I think that it won't be as easy to switch to the next big thing as it was for Myspace because facebook has history.

I fully admit as a non Facebook user you could be totally right. I don't get Facebook. I have never used it and likely never will. That timeline feature does sound cool to users for the reasons you state above. I don't know what is the Facebook killer, and there may not be one for years, I just see this technology changing so rapidly as well as kids using this and realizing consequences for lives being made so public in the workplace and college applications I feel there will be an eventual pendulum swing in the attitude of sites like this.Then again at 37 maybe I am an old man who doesn't get it and this is the first of many technologies that are amazing that I just don't get.

also i think men quit using facebook much after the first couple months when they have facebook stalked all the girls they know or once knew. after yanking it to all the girls pictures they always wanted to hook up with the interest wanes.For woman i think it's a lot more popular as they like to communicate and post things about their lives that no one cares about.

Huh?

 

[Sarnoff]

Is California's debt wiped out yet? It's been like hours

 

[mozzy84]

Seems like this is crazy expensive from a PE perspective. especially when I don't see how much long term value a site like this has that can easily be replaced by the next big thing.

Maybe a year plus from now when everything settles I will re look at it but this just seems like gambling at this point.

I agree with your gambling point, but I disagree with the easily replaced point...

Facebook's move to the timeline layout was honestly ingenious...simply because it put the "history" that is on facebook in perspective. I was clicking back through my timeline, and I got to 2007, when I first joined. I found the entry where my wife and I became facebook friends. I could go back and read status updates from a much earlier time that reminded me of things that I had forgotten about. It really made facebook not only a social media outlet for your current life, but also a chronological record of your past as well...that's not easy to just walk away from. I think that it won't be as easy to switch to the next big thing as it was for Myspace because facebook has history.

I fully admit as a non Facebook user you could be totally right. I don't get Facebook. I have never used it and likely never will. That timeline feature does sound cool to users for the reasons you state above. I don't know what is the Facebook killer, and there may not be one for years, I just see this technology changing so rapidly as well as kids using this and realizing consequences for lives being made so public in the workplace and college applications I feel there will be an eventual pendulum swing in the attitude of sites like this.Then again at 37 maybe I am an old man who doesn't get it and this is the first of many technologies that are amazing that I just don't get.

also i think men quit using facebook much after the first couple months when they have facebook stalked all the girls they know or once knew. after yanking it to all the girls pictures they always wanted to hook up with the interest wanes.

For woman i think it's a lot more popular as they like to communicate and post things about their lives that no one cares about.

naw this never gets old

 

[arrow1]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

Can you explain what greenshoe is? Thanks.

 

[culdeus]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

Can you explain what greenshoe is? Thanks.

I think it is the amount the underwriters can buy back on behalf of the seller.

 

[chet]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

Can you explain what greenshoe is? Thanks.

The greenshoe is an over allotment option that the underwriter has to increase the size of the issue by up to 15%. These are primary shares from the issuer.I think he's referring to the short. Underwriters will sell additional shares short so there is a natural buyer. This helps the underwriters stabilize the price and avoid violent swings in the first few days. Obviously in a really hot IPO, the underwriter won't short because they will be buying back at much higher prices.

 

[Major]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

Can you explain what greenshoe is? Thanks.

15% overallotment of the deal. 1mm shares = 150k share potential greenshoe. You allocate the deal with the greenshoe. So a 1mm share IPO, the bank would allocate 1.15mm shares. If the deal goes as planned and trades above issue price you'd exercise that greenshoe and the additional proceeds go to the company. If FB struggles to maintain issue price, then the bookrunner/lead underwriter will stabilize the stock by buying up to 15% of the deal (i.e. the greenshoe) on the open market and the shoe won't get exercised for the full amount or at all.

 

[Major]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands).

If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

Can you explain what greenshoe is? Thanks.

The greenshoe is an over allotment option that the underwriter has to increase the size of the issue by up to 15%. These are primary shares from the issuer.I think he's referring to the short. Underwriters will sell additional shares short so there is a natural buyer. This helps the underwriters stabilize the price and avoid violent swings in the first few days. Obviously in a really hot IPO, the underwriter won't short because they will be buying back at much higher prices.

and yes, as Chet alludes to, if things really go bad and you want to save face in front of the client (i.e. FB) you go naked i.e. naked short and buy stock on your bank's pad - i.e. desperate times.

 

[Dr. No]

i just bought 1500 shares at 40 ish........I am not going to look at if for 1-year.....

you had 50K to throw at this thing?what do you do for a living, i'd like to subscribe to your blog

 

[NeverEnough]

So who is buying? I'm on the fence leaning toward the do not buy side.

 

[Major]

So who is buying? I'm on the fence leaning toward the do not buy side.

Not me. I'm putting my additional trading $ on AAPL. Pretty much a value stock and FBs valuation is too rich for me at this point - I want to see FB execute on advertising before I consider stepping in. I was in this one strictly for the first day flip/ 'pop'.

 

[toadstool]

So who is buying? I'm on the fence leaning toward the do not buy side.

I was in for 1,000 at 38. Plan to hold long term, only a huge initial profit will get me to sell early. I am following my google model where I sit long term and sell out only to recoop my initial investment and spin off into alternate investments. I am still holding about $244K in google after an intial investment of about 90K. I did my initial sellback to recoup my buy it after 9 months. And last fall sold off another 150 for future investments, which this turned out to be less than half of it.I don't think I will see as an immediate return as I did with goog, but I am in for the long haul with fb.

 

[culdeus]

i wish you could find things out like:

$X of Zynga went to FB

 

[toadstool]

So who is buying? I'm on the fence leaning toward the do not buy side.

Not me. I'm putting my additional trading $ on AAPL. Pretty much a value stock and FBs valuation is too rich for me at this point - I want to see FB execute on advertising before I consider stepping in. I was in this one strictly for the first day flip/ 'pop'.

The time to get into aapl was back at the same time as google. I however, was unable to get in at 2004, I honestly didn't think it would get so hot. I did get into aapl roughly in early 2005 in the mid 30s. Got in for 1000. Bailed half of my position in 2008 in the 140s, thought I was being smart by pulling out at that time. I did get some balls and ride the other 500 shares to about 420. I left aapl right around new year, was convince this was going to be a few rough years for them. Shows what I know, I left over $50k on the table so far. Not sure I would buy in now, however.

 

[Mystery Achiever]

So who is buying? I'm on the fence leaning toward the do not buy side.

I will hold what I got in IPO for now, but not rushing to add. People expecting they would get a 50-100% jump today may balk and sell. Day traders will start getting out now, esp. on a Friday. Plus the market itself is so soft, which could tak a toll short term. When FB decided to go public, we were in an up market.

 

[NeverEnough]

So who is buying? I'm on the fence leaning toward the do not buy side.

Not me. I'm putting my additional trading $ on AAPL. Pretty much a value stock and FBs valuation is too rich for me at this point - I want to see FB execute on advertising before I consider stepping in. I was in this one strictly for the first day flip/ 'pop'.

We all don't have the kind of trading $ that works for $500+ stocks.

 

[Mystery Achiever]

i wish you could find things out like:$X of Zynga went to FB

Is this what you want?"In 2011 and the first quarter of 2012, we estimate that up to 19% and 15% of our revenue, respectively, wasderived from Payments processing fees from Zynga, direct advertising from Zynga, and revenue from thirdparties for ads shown on pages generated by Zynga apps."

 

[culdeus]

i wish you could find things out like:$X of Zynga went to FB

Is this what you want?"In 2011 and the first quarter of 2012, we estimate that up to 19% and 15% of our revenue, respectively, wasderived from Payments processing fees from Zynga, direct advertising from Zynga, and revenue from thirdparties for ads shown on pages generated by Zynga apps."

No I mean how many people woke up today and sold znyga at market and bought fb at market with the proceeds.

 

[bentley]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands). If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

I just have one question - can you please explain every word in your post?

 

[culdeus]

uh-oh. Starting to leak oil....

 

[Mystery Achiever]

No I mean how many people woke up today and sold znyga at market and bought fb at market with the proceeds.

LOL, I guess I did, though technically my FB shares were purchased yesterday. I sold at open; the big Zynga drop happened after the FB shares started trading. I think it is at a new low now.ETA ugly charthttp://stockcharts.com/h-sc/ui?s=ZNGA&p=D&yr=0&mn=7&dy=0&id=p03510797077

 

[culdeus]

Where the #### is that greenshoe?

 

[FavreCo]

POS is struggling not to go red before the close.

 

[eoMMan]

So who is buying? I'm on the fence leaning toward the do not buy side.

Not me. I'm putting my additional trading $ on AAPL. Pretty much a value stock and FBs valuation is too rich for me at this point - I want to see FB execute on advertising before I consider stepping in. I was in this one strictly for the first day flip/ 'pop'.

Don't buy until the numbers make some sort of sense.AAPL is a bunch of hype, but for a good reason. They make a boatload of money and have an awesome balance sheet. Facebook's numbers don't support this stock price.

 

[Major]

Hate to say I told you so ( no big pop)...right now the ECM desks (Morgan Stanley) are struggling to keep this one afloat - might have to burn through the greenshoe to support this stock. They don't want it coming close to breaking issue and want to ensure some profit for those buying at issue price. A little shocked about all the retail stock that was allocated (i.e. weak hands). If you guys have any other questions about the ipo process, feel free. I used to be on the banker side of things and can fill in the blanks for you.

I just have one question - can you please explain every word in your post?

sorry man, it's confusing even to average banker. I used to price and allocate IPOs/Follow-Ons for a big bank so I have a better handle on it.

 

[Major]

So who is buying? I'm on the fence leaning toward the do not buy side.

Not me. I'm putting my additional trading $ on AAPL. Pretty much a value stock and FBs valuation is too rich for me at this point - I want to see FB execute on advertising before I consider stepping in. I was in this one strictly for the first day flip/ 'pop'.

We all don't have the kind of trading $ that works for $500+ stocks.

Are you one of those people that would buy AAPL and consider it cheaper if it split 3 or 4 for 1? I love you guys

 

[culdeus]

Seriously, WTF is going on. This thing is DYING to go red and it isn't. How big is this greenshoe here. If this thing was absolutely not going below 38 today there was some money to be made here.

 

[culdeus]

The bids are funny. Some at 37 and a sheetload at 35 then way back at 28. lols

 

[Major]

Seriously, WTF is going on. This thing is DYING to go red and it isn't. How big is this greenshoe here. If this thing was absolutely not going below 38 today there was some money to be made here.

it won't break issue...maybe next week but not on the first day of trading. It's Morgan Stanley's name on the line and they'll keep buying. This IPO has been a fail though for ECM (equity capital markets) groups involved. First day is very important for investor and issuer sentiment.

 

[FavreCo]

Seriously, WTF is going on. This thing is DYING to go red and it isn't. How big is this greenshoe here. If this thing was absolutely not going below 38 today there was some money to be made here.

Who is trying to hold this POS above 38? They gotta give up eventually.

 

[RedmondLonghorn]

AAPL is a bunch of hype, but for a good reason.

Not sure the word "hype" is appropriate.

 

[culdeus]

My god, look at the size of the bids right now.

ETA: Someone wants to by 10 Million shares at 38.005

Anyone want to make 1/2 a penny?

 

[Chase Stuart]

For all those who thought it was going to go to 75, on the bright side, it's half-way there.

 

[moderated]

People want out bad and are lucky they are getting out at 38. Once the artificial support goes away its going down at least 20% minimum

 

[RedmondLonghorn]

It has traded about 40 million shares in the past 20 minutes all at right around 38. I wonder how much of that is aftermarket stabilization?

 

[Major]

It has traded about 40 million shares in the past 20 minutes all at right around 38. I wonder how much of that is aftermarket stabilization?

most of it

 

[Chase Stuart]

38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01. 38.00. 38.01.

 

[eoMMan]

I wonder how Tom from MySpace is feeling today.

 

[culdeus]

What do people on the trading desk see as the support level? If the underwriters pulled the rug would it test 30 right away?

 

[ffldrew]

Seriously, WTF is going on. This thing is DYING to go red and it isn't. How big is this greenshoe here. If this thing was absolutely not going below 38 today there was some money to be made here.

Major may know better - but I believe the greenshoe is near $2B - yes that is B as in Billion

 

[FavreCo]

10 million on the bid at 38.

 

[ffldrew]

I wonder why Morgan Stanley is not getting beat up even more here

 

[Major]

Seriously, WTF is going on. This thing is DYING to go red and it isn't. How big is this greenshoe here. If this thing was absolutely not going below 38 today there was some money to be made here.

Major may know better - but I believe the greenshoe is near $2B - yes that is B as in Billion

They have tons of ammo...if it wasn't for Morgan Stanley, this thing would probably be at $35-6.

 

[moderated]

What do people on the trading desk see as the support level? If the underwriters pulled the rug would it test 30 right away?

30 at most. This is a gift to retail to be able to finally dump on the big boys while they defend the 38 ipo price

 

[RedmondLonghorn]

It has traded about 40 million shares in the past 20 minutes all at right around 38. I wonder how much of that is aftermarket stabilization?

most of it

So now we are closing in on 60 mm shares at about 38. If the underwriters bought most of that, they have a colossal amount of risk on this deal. That is over $2.3 bln of stock. If this breaks deal price, Morgan Stanley and the other underwriters are going to get butchered.I guess I was premature in saying the bankers and capital markets people did a good job pricing it.

 

[culdeus]

What is the float of morgan? This comes out of their money markets right? Could we see a dollar broken monday? Who else is backing this? What do their boardrooms look and smell like right now?

 

[RedmondLonghorn]

What is the float of morgan? This comes out of their money markets right? Could we see a dollar broken monday? Who else is backing this? What do their boardrooms look and smell like right now?

Hyperbole much?The deal isn't going well, but they aren't going to break the buck on their MM accounts over it.