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    Thread: Facebook IPO next week...

    1. Member inivid's Avatar
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      01-28-2012 05:06 AM #1
      So, FB's IPO is finally going to be sometime next week. What do you think? Will it tank like Zynga did, or will we see some good momentum?
      Quote Originally Posted by Travy View Post
      error404: Stance not found.

    2. 01-28-2012 01:11 PM #2
      At the proposed valuations of the IPO ($75-100 billion), the only money to be made will be on the investment banking side (the banks taking them private). FBOOK will have a market cap similar to that of CSCO (CSCO's TTM income is likely higher than FBOOK's TTM revenue). Even FBOOK's 2015 projected revenue of $25-$35/user at 50% EBITDA (very optimistic IMO) still would be rich with a $100 billion market cap.

    3. Member Matt15's Avatar
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      01-28-2012 05:21 PM #3
      noob question:
      why would a $100bn company want/need to go public?

    4. 01-28-2012 05:58 PM #4
      Quote Originally Posted by Matt15 View Post
      noob question:
      why would a $100bn company want/need to go public?
      To make the existing owners very rich.

      Plenty of people will buy this stock just because of the name. I won't be.

    5. 01-28-2012 09:10 PM #5
      Quote Originally Posted by GoFaster View Post
      To make the existing owners very rich.

      Plenty of people will buy this stock just because of the name. I won't be.
      Yeah, there's gonna be a new wave of silicone valley millionaires very soon.

      Nobody really knows if Facebook is profitable, they haven't disclosed any numbers yet, have they.

      Plus the pressure to keep the investors happy once they do go public will change the atmosphere at Facebook inc.

    6. Member robr2's Avatar
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      01-29-2012 08:32 PM #6
      Quote Originally Posted by inivid View Post
      So, FB's IPO is finally going to be sometime next week. What do you think? Will it tank like Zynga did, or will we see some good momentum?
      Well the IPO isn't next week. They are expected to file paperwork with the SEC regarding an IPO. The actual IPO is months away.

      Quote Originally Posted by Matt15 View Post
      noob question:
      why would a $100bn company want/need to go public?
      The company isn't worth $100bn - that's an estimate of what it might be work if it were public. By going public, there is an actual value placed on the company and the current shareholders then have the opportunity to sell their shares based on that open market value. Facebook had revenue of $4.3bn last year. Even assuming a gross profit of 50% - I just don't see how it can be valued at $100bn.

    7. Geriatric Member ValveCoverGasket's Avatar
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      01-30-2012 01:19 PM #7
      Quote Originally Posted by AIRider View Post
      Plus the pressure to keep the investors happy once they do go public will change the atmosphere at Facebook inc.
      this is probably the biggest thing...

    8. Moderator Harv's Avatar
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      01-31-2012 12:17 AM #8
      If your a huge institution or a VC, then yeah you'll be happy with FB IPO.


      Individual investing? By the time we can get it I think it will be very overvalued.

    9. Senior Member AZGolf's Avatar
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      01-31-2012 08:06 AM #9
      Quote Originally Posted by Matt15 View Post
      noob question:
      why would a $100bn company want/need to go public?
      It is explained in this article. Basically they are required to go public by law because the company has too many investors to remain private. If they could restrict the total number of owners then the company could remain private, otherwise they are better off just going public.

      Quote Originally Posted by robr2 View Post
      Facebook had revenue of $4.3bn last year. Even assuming a gross profit of 50% - I just don't see how it can be valued at $100bn.
      Well if their profit was sky-high, like $2B in earnings with a 50x PE ratio could support that valuation. However; meanwhile the rest of the market is sitting around with 10X PE ratios. Microsoft is under 11x. Apple is under 13x. Even Google is under 20x. If we find out Facebook's real earnings are more like $1B then it would be hard to picture valuation anywhere even close to $100B.

      I've read articles indicating that a sixth of the world population has already signed up for facebook at least once and that in the USA membership peaked and is slightly falling now because it's no longer trendy. It's hard to give Facebook internet startup valuation when Facebook is honestly already very mature and unlikely to double or triple earnings in the next 5 years like so many internet startups can do.
      Last edited by AZGolf; 01-31-2012 at 08:14 AM.

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      01-31-2012 07:13 PM #10
      Quote Originally Posted by Harv View Post

      Individual investing? By the time we can get it I think it will be very overvalued.
      basically, there's no way for a guy like me to get in on the ground floor tomorrow morning?

    11. Member SteveMKIIDub's Avatar
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      01-31-2012 07:58 PM #11
      I don't know what it is, but I just have no desire to get into these types of things. I guess I just prefer business that I understand.

      Not that I don't understand Facebook
      "I don’t want the company to be driven by numbers. I want it to be driven by making better cars and contributing to society. That will turn into profit, which we can use to develop better cars. That should be the cycle, and that will, as a result, build a company with a strong foundation."
      -Akio Toyoda

    12. Geriatric Member ValveCoverGasket's Avatar
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      01-31-2012 08:11 PM #12
      Quote Originally Posted by SteveMKIIDub View Post
      I guess I just prefer business that I understand.
      this one always cracks me up


    13. Member Salty VW's Avatar
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      01-31-2012 11:22 PM #13
      I feel like it's too much of a household name not to see at least one good jolt out 'the gate.

      Long term? Who knows, It may very well become the next Myspace. But short term I almost can't see how it wouldn't be profitable.
      [B]-Salty
      Saltywayz | SKE Forums

    14. 02-01-2012 02:35 AM #14
      something cooler, better, sexier will come along in a few years, 5,10, doesn't matter and facebook will die out. it's almost too popular to be cool anymore …

      ever since I stared having old, mature, and super young family members join, it stopped being fun ..

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      02-01-2012 10:25 AM #15

    16. Moderator Harv's Avatar
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      02-01-2012 02:05 PM #16
      Quote Originally Posted by synthsis View Post
      basically, there's no way for a guy like me to get in on the ground floor tomorrow morning?
      They are filing for an IPO, the actuall stock you can buy won't be out until May (?).

      But no, I bet 95% of the stock is already spoken for. But the time it hits us it will be so overvalued that Zuckerberg could buy a 3rd world country.

    17. Member Salty VW's Avatar
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      02-01-2012 02:31 PM #17
      You're all forgetting one thing though: Everyone and their grandma is gonna want Facebook stock the day it hits the open market, whether it makes sense long term or not.
      [B]-Salty
      Saltywayz | SKE Forums

    18. 02-01-2012 05:35 PM #18
      Quote Originally Posted by Salty VW View Post
      You're all forgetting one thing though: Everyone and their grandma is gonna want Facebook stock the day it hits the open market, whether it makes sense long term or not.
      true. but what if it's like google… 100$ to 600$ in a few years. user wise, 800 mill people is alot of people … I see FB moving more towards sales of product, that being more ads, etc ..

      I wouldn't be surprised if they develop an algorithm that pre-reds your messages and implements product links in your posts, private messages, etc. or even outright send you private messages, promos etc, to your inbox.

    19. Senior Member AZGolf's Avatar
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      02-01-2012 05:42 PM #19
      Quote Originally Posted by AIRider View Post
      800 mill people is alot of people … I see FB moving more towards sales of product, that being more ads, etc ..
      They are already moving that direction with Facebook Credits. It won't be long before that can be used to actually pay for goods instead of using your PayPal account. Now instead of just "like"-ing your favorite company on Facebook, you could buy goods from them through facebook, or at least use facebook as the payment, similar to how paypal is the payment engine behind virtually every website nowadays. I'm sure they would like to have a "Pay with FB Credits" button on websites instead of "Pay with PayPal". I imagine that's the direction they are heading.

    20. Member Salty VW's Avatar
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      02-01-2012 05:58 PM #20
      Definitely wouldn't be surprised if they made an attempt at complete interweb dominance, ala Google.

      FaceTube, FaceMail, FaceVoice, etc.
      [B]-Salty
      Saltywayz | SKE Forums

    21. 02-01-2012 06:41 PM #21
      Quote Originally Posted by AZGolf View Post
      They are already moving that direction with Facebook Credits. It won't be long before that can be used to actually pay for goods instead of using your PayPal account. Now instead of just "like"-ing your favorite company on Facebook, you could buy goods from them through facebook, or at least use facebook as the payment, similar to how paypal is the payment engine behind virtually every website nowadays. I'm sure they would like to have a "Pay with FB Credits" button on websites instead of "Pay with PayPal". I imagine that's the direction they are heading.
      isn't the paypal one of the facebook shareholders,

    22. Member robr2's Avatar
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      02-01-2012 06:48 PM #22
      Quote Originally Posted by AIRider View Post
      isn't the paypal one of the facebook shareholders,
      No. Paypal is owned by eBay.

      According to wiki, these folks have shares of Facebook:

      Mark Zuckerberg: 24%
      Accel Partners: 10%
      Digital Sky Technologies: 10%,
      Dustin Moskovitz: 6%
      Eduardo Saverin: 5%
      Sean Parker: 4%
      Peter Thiel: 3%
      Greylock Partners and Meritech Capital Partners: between 1 to 2% each
      Microsoft: 1.3%
      Li Ka-shing: 0.75%
      Interpublic Group: less than 0.5%
      A small group of current and former employees and celebrities own less than 1% each
      The remaining 30% or so are owned by employees, an undisclosed number of celebrities, and outside investors.

    23. Moderator Harv's Avatar
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      02-01-2012 07:44 PM #23
      Quote Originally Posted by AIRider View Post
      true. but what if it's like google… 100$ to 600$ in a few years. user wise, 800 mill people is alot of people … I see FB moving more towards sales of product, that being more ads, etc ..

      I wouldn't be surprised if they develop an algorithm that pre-reds your messages and implements product links in your posts, private messages, etc. or even outright send you private messages, promos etc, to your inbox.
      Good point, but right now Google has so much more than Facebook. You could argue that Googles IPO gave them the resources (cash) to bring in the world best engineers and other employees to come up with Google Maps/Earth, YouTube, Cell Phones, etc..


      But I'm still sticking to the fact that in the short-term, Facebook will be way overvalued.

    24. 02-01-2012 07:57 PM #24
      Quote Originally Posted by Harv View Post
      Good point, but right now Google has so much more than Facebook. You could argue that Googles IPO gave them the resources (cash) to bring in the world best engineers and other employees to come up with Google Maps/Earth, YouTube, Cell Phones, etc..


      But I'm still sticking to the fact that in the short-term, Facebook will be way overvalued.
      Good point as well! Google for me is much more useful than Facebook, but I can see how the money brought by the IPO could bring some drastic changes to Facebook, at least in terms of outside acquisitions, employees, new off- products, a la YouTube for google, PayPal for eBay, etc.

      Overvaluated yes, but sometimes it seems that mr.Market doesn't care ad throws logic out the door.

      I'll be buying some once they become available for us low time investors.

      I believe in buffets logic, buy into products that you use everyday and like. And damn, I do use FB a few times a day.

    25. Member SteveMKIIDub's Avatar
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      02-01-2012 09:46 PM #25
      Quote Originally Posted by AIRider View Post
      something cooler, better, sexier will come along in a few years, 5,10, doesn't matter and facebook will die out. it's almost too popular to be cool anymore …

      ever since I stared having old, mature, and super young family members join, it stopped being fun ..
      We could have said that about Google too, but now it is the dominate search engine. I still wouldn't put my money into Facebook, but I can see the potential.

      Or LinkedIn.
      "I don’t want the company to be driven by numbers. I want it to be driven by making better cars and contributing to society. That will turn into profit, which we can use to develop better cars. That should be the cycle, and that will, as a result, build a company with a strong foundation."
      -Akio Toyoda

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