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Facebook Reportedly Filing $5 Billion IPO Today
hypnosec writes "Today is the day when Facebook may be submitting all required paperwork to regulators for its $5 billion initial public offering. According to the source close to the deal, Facebook has selected Morgan Stanley along with four others — Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Barclay's Capital to handle this IPO. Morgan Stanley will be taking "lead left" role in this supposedly biggest IPO from Silicon Valley. According to International Financing Review, the preliminary target of $5 billion will be increased by many folds in coming few months as a response to the demands of investors. Sources close to this matter disclosed that this might turn out to be defining moment for current web investments. The deal might rise to $10 billion which eventually will make Facebook a social networking empire valued between $75 billion to $100 billion. In fact, $75 billion is definitely an undervaluation compared to previous expectations."
And then watch carefuly the bubble explode...
Video of some good progressive thrash music
Based on that absurd valuation the average Facebook profile is worth $225.
No; but all the shareholders who aren't major investment banks get their dividends paid out in ZyngaCash and/or Facebook Points...
Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?
Farms. Lots and lots of farms.
Trolling is a art,
If I recall, Google was almost $100 a share when it IPO'ed and I thought that was way too much. So I did not buy, because I couldn't figure out how they were going to sustain that.
Well, I was quite wrong because Google went up to $200 then $300, then $400 and has been at something around $500 a share for the last 6 or 7 years. Crazy.
So, I don't know what to think about Facecrook. On one hand, I find the company utterly despicable. On the other hand, companies that are utterly despicable tend to go up in value -- a lot.
They are going to be the top dog in social media for at least the next 5 years, which is enough time to buy some shares, watch them go up in value, and then sell in about 3 or 4 years with no regrets if it goes up further.
If telephones are outlawed, then only outlaws will have telephones.
That's only a P/E of 400. Seems reasonable.
That said: I don't understand how they are running this IPO. Don't they usually set an initial offering price? Are they trying to auction the initial shares? I'll start the bidding with a nickle for the lot.
An IPO's price is set just before the shares hit the open market. The vast majority of a company's shares are either owned by current investors (employees, executives, angel funds etc...) or purchased by investment banks as part of the IPO (when all the shares are purchased in advance it's known as a bought deal). This gives the IPO company a guaranteed source of cash and simplifies the whole process. The investment banks then try to maximize their gain by selling their shares to their clients at a higher market price.
As an investor, you go to your bank and put in a request for X shares. You won't know the exact price until you buy, and your request may be fully/partially/not filled at all. Generally the pension funds get first crack (usually at a discount) and small investors are often left to fend for themselves.
By waiting until the last second to set the market rate the investment banks can gauge demand and maximize the revenue they get from selling their shares to their customers. Once the shares are distributed the stock starts to trade on the open market, and anyone can get in. However, strict rules block the vast majority of insiders from selling immediately so demand is heightened by the limited number of shares. That makes the price go up and everyone is supposed to be happy.
In case you missed it in the description above, the average investor is the mark and the company, the investment banks and then pension funds are in on the con.
(This is a bit of simplification but covers the gist of it)
When you have nothing left to burn you must set yourself on fire
Examples:
- Political parties spent $120+ on a vote last elections. How much would a political party pay FB to know the names and contact info of undecided voters or voters who seem to be able to influence others?
- Your dishwasher just broke, you complain about it on FB. How much Sears or BestBuy would pay to be notified this same instance about your misfortune?
- You buy a vacation with Travel Agent 1, go there to find out the hotel is a dump, you bitch about t on FB. How much would TA2 pay to know about this and contact you with an alternative offer?
The possibilities are endless, especially for the new owners with zero moral standards like Goldman Sachs and the likes. The growth will not come from more subscribers, but with ever increasing ways to analyze the information flow.
Mark, get a fucking /. account already.
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ECHELON is a government program to find words like bomb, jihad, plutonium, assassinate, and anarchy.
Don't know quite what you're doing, but your rant does demonstrate that, yeah, you really don't get it.
1) A huge personal data sink where I could put all of my information in one basket to be sold to the highest bidder, analyzed, and then acted upon with absolutely no benefit to me.
You do realize you don't have to put in lots of information, don't you? There's very, very, very little that Facebook actually requires you to enter.
2) A marginally effective communication tool. Signal to noise ratio sucked, because much like Twitter, you had a constant stream of information that was barely useful, relevant or interesting. Especially, when there is a huge trend to manipulate you into posting other people's content on your wall for marketing purposes.
Signal to noise ratio was a bit off for me, to start. So I blocked anything coming from games and turned off anything coming from the small number of people who were on my Friends list who were the worst offenders at constantly posting status updates. If I want to know anything about them, I go to their profile page.
Which turned Facebook into an incredibly useful communications tool for me. YMMV. I have regular conversations with a cousin who I hadn't seen in years because we lived on opposite sides of the world (literally) and I didn't know her e-mail address. Friends change e-mails? I don't have to know - they stay in the same place on Facebook.
3) A gaming platform thinly disguised as a social networking platform where Facebook was constantly fighting to get a real piece of the financial action taking place.
No, it's a social networking platform that sees a lucrative side business in gaming. Don't like it? Don't play the games. You don't have to, you know.
I have tried a handful of games from time to time. Yes, I tried Farmville to see what all the fuss was about. Bored me. Deleted. End of that.
And I can't imagine why you're getting a whole load of spam. I have never gotten spam from Facebook. Not once. I have received e-mails that I signed up for, until I decided, ehh, not interested, and changed my prefs. Result=nothing. As in no more e-mails. Easy.
When we disagree, refuse to participate, and quite often make condescending and derisive comments towards other people that don't understand what we see you misinterpret that as us "not getting it".
Well, yes. What's the alternative? Either you are refusing to admit that something that's not useful to you might possibly be useful to someone else, or you're just being smug and - you said it yourself - condescending because you're too cool to use Facebook, in which case you're just being an immature jerk. Or you don't get it. Which is it?
if you don't like Facebook, don't use it. Easy. Done. Move on with your life. Let the insignificant masses who are so inferior to you have their fun.
Anybody that puts money into this is a sucker
Insert standard disclaimers - past performance is no guarantee of future performance, you should only invest as much as you can afford to lose, all investments carry an element of risk, etc. An investor either makes an educated gamble, or they do something on a whim. If it's the latter, well, it doesn't matter if it's Facebook or HP, they're making an uneducated gamble.