Facebook IPO.....will it be another eircom

Max_Charger wrote: »

Around this time 5 years ago, Apple's PE ratio was 35:1 with a stock value of $85. Alot of people didn't invest as a result. Last i heard they are doing alright :pac: I'm not directly comparing the two ,chalk and cheese, but sometimes PE ratio's should be thrown out the window.

Yeah but Apple have been producing innovative products and will probably continue to do so for the foreseeable future. As others have said Facebook are a bit of a one-trick pony and they could easily be wiped out when the next hot thing comes along. Bebo was the next big thing a few years ago and AOL bought it for a crazy $850M, only to sell it off at a massive loss not too long after when they realised it was never going to make them a dime.

The FB share price could really plummet in a short space of time, it's massively overvalued right now. A few big hitters will probably make a tidy profit by getting in and getting out short-term but anyone thinking this is a wise long-term investment is crazy.

aidan24326 wrote: »

The FB share price could really plummet in a short space of time, it's massively overvalued right now. A few big hitters will probably make a tidy profit by getting in and getting out short-term but anyone thinking this is a wise long-term investment is crazy.

The big hitters have already invested, either as angels in an investment round, through Goldman-Sachs, or SecondMarket.
This is why Goldman-Sachs and Peter Thiel are the big sellers. The amount of money they're making off of this is incredible.
Thiel invested $500,000, and he's selling $578,000,000 worth on Friday, and that's at the projected "conservative" price.

Max_Charger wrote: »

Facebook have almost 1500 patents,they bought a shed load of them off IBM a few weeks ago, alot of them to do with hardware. What do facebook want with hardware patents? Strong possibly of a facebook phone and possibly even a search engine. Almost everyone here is writing them off, I wouldn't be so quick.

It's not writing them off, it's trying to justify their huge valuation against earnings and a rather limited bandwidth in terms of services.

For instance Google and Amazon and Microsoft have their hands in pretty much everything. Facebook...not so.

maninasia wrote: »

Yes, yes, yes. The early employees stand to make stacks of cash. But who will really cash out are the Silicon valley insiders, the venture capital companies and the big guys sponsoring the IPO like Goldman Sachs.

Yep - that's what I meant by "big dogs". Plus Bono. :cool:

Well, the Facebook IPO went off OK, it seems, but I'm noticing a few odd things. The final IPO price was set at $38, where it opened, shot up to peak at $43.20, and it's currently hovering around the $40 mark. At the open, 89 million shares were sold.

edit: diving back to $39 $38 as I write. I blinked and nearly missed it ...

That's not what bothers me. What concerns me is the news that the existing private shareholders are selling more of their shares than originally planned.

Existing holders will offer 241.2 million shares, bringing the total on offer to 421.2 million, a regulatory filing today shows. Accel, the biggest seller in the IPO, raised the amount it’s selling by 28 percent, while Goldman Sachs more than doubled its shares on offer.
...
While the expanded IPO may mean the appetite for shares is strong, insiders’ decision to pare holdings further may heighten some investors’ concern over Facebook’s earnings growth, said Greenwood Capital’s Walter Todd. “If the demand wasn’t there, they wouldn’t have upsized the deal,” said Todd, who oversees about $940 million as chief investment officer at the Greenwood, South Carolina-based firm. “On the other hand, when you see insiders unloading their stakes, you start to wonder why. I could see it turning some institutional investors off.”

My read of this is: that they want out of FB at the IPO price of $38 or better. They're expecting it to go down from there. I hope the "retail investors" have plenty of lubricant handy. :eek:

edit edit: back up over $40 again. Nope ... hovering around $40. It's going up and down quicker than a hoor's knickers. Real-Time Chart: Google Finance.

Oh, and you'll be pleased to hear that Bono is now the richest musician in the world. His 2.3% stake, through his private equity firm Elevation Partners, is worth around $2.3 billion, far exceeding Sir Paul McCartney's. (The story says $1.5B, but that seems to be from before FB raised the IPO price. )

Deleted User wrote: »

So did Bono sell his full stake then? Cause 100bn is the valuation based on an 18bn offering. So does he have cash or a largely paper wealth still?

I doubt anyone sold their full stake - wasn't expecting that. If a stock is being "dumped", the price will go down like the proverbial Le(a)d Zeppelin. Owners of large stakes have to walk a fine line, even if they want out, to keep the price up and not depress the market. There has to be demand, a buyer for every seller, and that informed their choices of how much to put on the market on IPO day.

Even if it's "paper wealth", it's still wealth in terms of what it can do. It can be collateral on a gargantuan loan, for example. But Bono's denying that he's a billionaire:

Contrary to reports, I'm not a billionaire or going to be richer than any Beatle - and not just in the sense of money, by the way, the Beatles are untouchable - those billionaire reports are a joke.
...
In Elevation, we invest other people's money - endowments, pension funds. We do get paid of course.

I didn't know that - and I wonder how much of the fund belongs to other people outside U2? I'm not particularly bothered either way, it's fun to speculate. Previous reports about Elevation Partners made it sound as if it was all about U2's money.

It's not as if he'll be paying much tax on his earnings - unlike Mark Zuckerberg, who's getting a bill for $195 million from the State of California alone after making nearly $2 billion profit in one day. (That's State tax only, Federal tax is still to come.)

I love how people are comparing Facebook to Bebo as if they're on the same level.

twinytwo wrote: »

People are so sad... facebook is a bubble that will burst (and become worthess over night) once the next, better idea comes along

Spot on !!

You can look at all the research you want but you cant rely on teenagers to be content with a free toy when a bright new shiny toy comes along.

Its just human nature. Once a few "cool kids" start using the new social media, or Lady Gaga, Beiber gets paid 10 million dollars to use "Facetube mark 2" exclusively, you can bet there fans will follow suit.