Facebook IPO will be the biggest disaster in IPO history

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Topic Author
natureexplorer
Posts: 4192
Joined: Thu Sep 03, 2009 10:52 am
Location: Houston

Facebook IPO will be the biggest disaster in IPO history

Post by natureexplorer » Thu Feb 02, 2012 10:57 pm

Just went to facebook.com and my site was all messed up.

mikeast
Posts: 150
Joined: Mon Jul 02, 2007 11:13 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by mikeast » Thu Feb 02, 2012 11:18 pm

Well, I don't know much about IPOs, but I believe that Facebook will go into rapid decline soon. Thier arrogance in thinking they can do whatever they want and
a billion sheep will just go along will do them in. I know that I'm seriously thinking about cancelling this week. FB is 98% a waste of time in my opinion.

User avatar
paddyshack
Posts: 282
Joined: Sat Jul 12, 2008 4:49 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by paddyshack » Fri Feb 03, 2012 12:19 am

mikeast wrote: FB is 98% a waste of time in my opinion.
So is 98% of what is on Television, yet not many have found a way to quit that.

Facebook has access to an audience 4X the audience the Superbowl gets, every day. They made a billion in profit last year with under 3000 employees. They scare the leadership at Google.

When you have nearing a billion people interested in your service, half of whom spend 8 hrs/week on average at your destination, you've accomplished something. They may indeed be a flash in the pan, but they clearly have made radical changes in how people interact in society and that won't be reversed, only altered moving foward. I'm no FB fan, but I get that there is good reason for all the clamor.

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by sscritic » Fri Feb 03, 2012 12:22 am

natureexplorer wrote:Just went to facebook.com and my site was all messed up.
Welcome to bogleheads Mark.

User avatar
Liquid
Posts: 301
Joined: Sat Aug 06, 2011 10:17 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Liquid » Fri Feb 03, 2012 12:26 am

IPO's in general have a rather poor history. Big hat, little cattle syndrome.

User avatar
Sam2
Posts: 298
Joined: Thu Jun 14, 2007 6:31 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Sam2 » Fri Feb 03, 2012 12:56 am

This discussion shows a disconnect between generations. If you have children, ask them about FB.

Erwin
Posts: 1929
Joined: Fri Apr 27, 2007 11:16 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Erwin » Fri Feb 03, 2012 1:33 am

natureexplorer wrote:Just went to facebook.com and my site was all messed up.
If you would have asked me to invest in FB in 2005,6,7,8 I would have said no, simply because I am a small minded guy: have no vision and am risk adverse. But this company is the future, like it or not. The leadership has been brilliant!
Erwin

User avatar
paddyshack
Posts: 282
Joined: Sat Jul 12, 2008 4:49 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by paddyshack » Fri Feb 03, 2012 1:44 am

mpt follower wrote:
natureexplorer wrote:Just went to facebook.com and my site was all messed up.
If you would have asked me to invest in FB in 2005,6,7,8 I would have said no, simply because I am a small minded guy: have no vision and am risk adverse. But this company is the future, like it or not. The leadership has been brilliant!
Buying them in 2005 could have gotten you a something like a 10,000x return. Good thing nobody did ask you then, you'd be really kicking yourself ;)

http://www.dailymail.co.uk/news/article ... ayday.html

User avatar
TJAJ9
Posts: 1241
Joined: Sat Sep 12, 2009 3:37 am
Location: Philadelphia, PA

Re: Facebook IPO will be the biggest disaster in IPO history

Post by TJAJ9 » Fri Feb 03, 2012 2:30 am

Facebook will be the next Myspace in a couple of years. Maybe even the next AOL. Both of them are now insignificant after being at the top.

In the age of the internet, something else ALWAYS comes along, and people flock from one service to another.

Jfet
Posts: 1081
Joined: Tue Dec 21, 2010 7:20 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Jfet » Fri Feb 03, 2012 4:44 am

The next big thing will be total immersion virtual worlds (similar to the tv series Caprica). I think it is pretty horrible for society, but if I can locate that company in the next few years and they allow me to put in $5000, I would take the risk that it would be a 1000x bagger. Of course there is some chance it would be an existing company like Facebook, Google, Apple...

FredPeterson
Posts: 1025
Joined: Fri Jul 10, 2009 8:41 pm
Location: Madison, WI

Re: Facebook IPO will be the biggest disaster in IPO history

Post by FredPeterson » Fri Feb 03, 2012 5:19 pm

TJAJ9 wrote:Facebook will be the next Myspace in a couple of years. Maybe even the next AOL. Both of them are now insignificant after being at the top.

In the age of the internet, something else ALWAYS comes along, and people flock from one service to another.
MySpace's failure was in allowing people to have extreme customization of their personal page.

The problem was, 99.99999999% of people have no concept of web design, even if given a WYSIWYG. Thats why people were being paid to design professional pages and make templates, but majority of the time that was just never done.

There was no consistency or functionality that would link peoples profiles and everything they did together, it required the user to update things which is just a stupid PITA. FaceBooks interface is evolving to keep things connected and auto-updated when things occur, this is crucial and is mostly what drove people away from what became a horrendous ghetto at MySpace. Being able to blast any old MIDI when you visited a page, injecting HTML drive-by virus' etc became its huge downfall. There comes a point where letting people modify their own page unleashes a beast you cannot control and if you try to reign it in...well, everyone leaves in droves so they left it open until it became the Internets ghetto.

AOL went into rapid decline for one reason only: They never adapted to the Internet. It took *forever* for AOL to give their users a decent Internet connection, even over the modem. They required users to have AOL software to act as a gateway to the Internet over the AOL MegaProxy which basically made even the fastest modem connections crap.

AOL only began changing in the last few years as they realized their main and largest revenue source was finally in its death decline (subscriptions via dialup). The HuffPo deal was and is a last ditch effort and that was practically DOA.

FaceBook will survive because as already stated, its a central, easy to use portal that can provide directed, meaningful and mass advertisement. People bitched and bitched about the FaceBook within FaceBook on the right side, now people are okay with it. I'm still getting used to the Timeline feature as I think it messes with the ease of finding information about a person....but eventually I think it will have its niche, thats why its not being forced on people.

Google+ is attempting to take people...but its frankly the geeks that go there "to be different" and when all their non-geek friends don't go over...yah, they just give up and say yah, Circles are cool but Facebook groups do the same thing and all my friends/family already use it. You know your service needs help when you advertise on TV for it.

Am I saying Facebook will be a good investment? Heck no. I'm simply saying it will survive and why comparing it to AOL and MySpace is wrong.

IMO only Apple has the image that could steal enough Facebook users....but they don't want to take that task on.

KyleAAA
Posts: 7768
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by KyleAAA » Fri Feb 03, 2012 5:23 pm

TJAJ9 wrote:Facebook will be the next Myspace in a couple of years. Maybe even the next AOL. Both of them are now insignificant after being at the top.

In the age of the internet, something else ALWAYS comes along, and people flock from one service to another.
Doubt it. Facebook has absolutely nothing in common with myspace other than the fact that they both allow you to add "friends." Facebook is a platform. Myspace wasn't. Myspace was also never even a tenth as dominant as Facebook has become, not even at the height of its popularity.

cheapedy
Posts: 41
Joined: Mon Sep 19, 2011 2:44 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by cheapedy » Fri Feb 03, 2012 9:14 pm

I have no idea how they even make money. Iv'e never thought twice about the crappy ads on FB. Who actually does?

User avatar
Noobvestor
Posts: 4767
Joined: Mon Aug 23, 2010 1:09 am
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Noobvestor » Fri Feb 03, 2012 9:21 pm

MySpace's failure was in allowing people to have extreme customization of their personal page.
Simple counterpoint example: Digg gave users very little control of the site, and they have increasingly become irrelevant. Reddit allowed users to create and manage their own sections of the site (SubReddits) right down to the code/CSS level, and are flourishing.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

User avatar
Imperabo
Posts: 1109
Joined: Fri Aug 29, 2008 1:00 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Imperabo » Fri Feb 03, 2012 9:24 pm

TJAJ9 wrote:Facebook will be the next Myspace in a couple of years. Maybe even the next AOL. Both of them are now insignificant after being at the top.

In the age of the internet, something else ALWAYS comes along, and people flock from one service to another.

You're missing something really important. Myspace and AOL only ever connected a small percentage of the population. Facebook has almost total penetration. Really not comparable situations at all. Eventually one company was going to achieve total penetration in social networking and it will be virtually impossible to unseat them now.

KyleAAA
Posts: 7768
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by KyleAAA » Fri Feb 03, 2012 9:47 pm

cheapedy wrote:I have no idea how they even make money. Iv'e never thought twice about the crappy ads on FB. Who actually does?
Tens of millions of people do. Facebook right now is severely undermonetized. They could probably triple revenue without even growing the user base at this point.

User avatar
market timer
Posts: 6191
Joined: Tue Aug 21, 2007 1:42 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by market timer » Fri Feb 03, 2012 10:10 pm

KyleAAA wrote:
cheapedy wrote:I have no idea how they even make money. Iv'e never thought twice about the crappy ads on FB. Who actually does?
Tens of millions of people do. Facebook right now is severely undermonetized. They could probably triple revenue without even growing the user base at this point.
I think they should move to a subscription-based service that charges anyone over the age of 25 some monthly fee not to disclose all their college and HS pictures, messages, and postings publicly. Ideally, it would be based on income, like a 1% Facebook tax.

User avatar
Epsilon Delta
Posts: 8090
Joined: Thu Apr 28, 2011 7:00 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Epsilon Delta » Fri Feb 03, 2012 10:23 pm

market timer wrote: I think they should move to a subscription-based service that charges anyone over the age of 25 some monthly fee not to disclose all their college and HS pictures, messages, and postings publicly. Ideally, it would be based on income, like a 1% Facebook tax.
Perhaps in the future. Right now FB has very little HS info about people over 25.

User avatar
market timer
Posts: 6191
Joined: Tue Aug 21, 2007 1:42 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by market timer » Fri Feb 03, 2012 10:53 pm

Epsilon Delta wrote:
market timer wrote: I think they should move to a subscription-based service that charges anyone over the age of 25 some monthly fee not to disclose all their college and HS pictures, messages, and postings publicly. Ideally, it would be based on income, like a 1% Facebook tax.
Perhaps in the future. Right now FB has very little HS info about people over 25.
And yet I'm over 30, not even on FB, and some of my HS pictures found their way onto FB.

User avatar
mlebuf
Posts: 1915
Joined: Tue Feb 20, 2007 8:27 pm
Location: Paradise Valley, Arizona

Re: Facebook IPO will be the biggest disaster in IPO history

Post by mlebuf » Sat Feb 04, 2012 1:20 am

Jason Zweig discusses the Facebook IPO and the St. Petersburg Paradox in his latest WSJ column:

http://online.wsj.com/article/SB1000142 ... inance_PF4
Best wishes, | Michael | | Invest your time actively and your money passively.

tphp99
Posts: 332
Joined: Sun Jan 03, 2010 8:47 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by tphp99 » Sat Feb 04, 2012 4:05 am

cheapedy wrote:I have no idea how they even make money. Iv'e never thought twice about the crappy ads on FB. Who actually does?
Obviously the business paying the for the ad.

User avatar
nisiprius
Advisory Board
Posts: 39800
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Facebook IPO will be the biggest disaster in IPO history

Post by nisiprius » Sat Feb 04, 2012 5:42 am

Imperabo wrote:You're missing something really important. Myspace and AOL only ever connected a small percentage of the population. Facebook has almost total penetration.
One observation about Facebook (which I dislike and don't "get.") I've been helping with the contact list for my high school's upcoming fiftieth reunion, trying to find people whose contact information is missing or out of date, and I've been astonished a) at how many we've found via Facebook, and b) what the nature of their Facebook pages are like. There are dozens of alums who set up Facebook pages and obviously abandoned them and never did a thing with them. Almost no updates, almost no postings, maybe their picture, maybe a mention of the high school and college they attended, maybe a hint of what city they live in, and that's practically it. They don't answer messages left for them, they are obviously no longer checking the page. But it's there. And these are people who don't have any other Web presence to speak of; a regular Google search doesn't find them, and the phone directories won't find them unless you've at least know what state they're living in.

What's impressive to me is how many geezers and geezettes actually did set up Facebook pages.

Yes, "almost total penetration."
Last edited by nisiprius on Sat Feb 04, 2012 12:29 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

HoosierJim
Posts: 712
Joined: Wed Mar 24, 2010 7:11 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by HoosierJim » Sat Feb 04, 2012 7:29 am

Facebook noticed the growth curve was doing this.... http://www.google.com/trends/?q=faceboo ... all&sort=0 and decided to get some cash while the getting was good. I think general stock market performance and levels plays a big part in timing. Still think there's lots of growth and money to squeeze out of this thing.

Once the IPO completes, there will be a lot of employees with lots of cash - I'm sure they all think they have the idea that will be the next "facebook".

As a previous poster mentioned see the difference in google trends between digg and reddit

http://www.google.com/trends/?q=reddit,digg

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by sscritic » Sat Feb 04, 2012 7:33 am

HoosierJim wrote: Once the IPO completes, there will be a lot of employees with lots of cash
Side effect: don't bet on house prices falling on the Peninsula. Palo Alto will remain expensive.
Apple Inc. has 1 Infinite Loop; Genentech Inc. has 1 DNA Way. But Facebook Inc. now lays claim to Silicon Valley's premier vanity address: 1 Hacker Way.

richard
Posts: 7961
Joined: Tue Feb 20, 2007 3:38 pm
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by richard » Sat Feb 04, 2012 7:45 am

I'd guess FB will continue to grow and be very successful. There are a lot of people who communicate their lives through FB and many more opportunities to monetize.

OTOH, buying in an extremely popular and highly publicized IPO doesn't seem the best course. A great business does not necessarily translate into great stock performance, especially if the price already reflects the hype over the business.

User avatar
3CT_Paddler
Posts: 3274
Joined: Wed Feb 04, 2009 5:28 pm
Location: Marietta, GA

Re: Facebook IPO will be the biggest disaster in IPO history

Post by 3CT_Paddler » Sat Feb 04, 2012 8:52 am

FredPeterson wrote: MySpace's failure was in allowing people to have extreme customization of their personal page.


I think MySpace's failures were a lot deeper than just their technical approach. For one thing, Facebook created a much more exclusive environment off the bat for only opening it to college students. It was only after they saturated the college market that they moved on to everyone else. Also MySpace had a deserved reputation for being much more seedy with a significant number of people advertising as if they were a call girl on the street corner.

User avatar
3CT_Paddler
Posts: 3274
Joined: Wed Feb 04, 2009 5:28 pm
Location: Marietta, GA

Re: Facebook IPO will be the biggest disaster in IPO history

Post by 3CT_Paddler » Sat Feb 04, 2012 9:04 am

KyleAAA wrote:
cheapedy wrote:I have no idea how they even make money. Iv'e never thought twice about the crappy ads on FB. Who actually does?
Tens of millions of people do. Facebook right now is severely undermonetized. They could probably triple revenue without even growing the user base at this point.
Maybe there are creative, but painless strategies for monetizing these users, but I would guess the prospects are limited (otherwise they would have done it already). I would think users would have a low tolerance for putting up with lots of intrusive methods, and would consider switching to an alternative. Facebook was created in a matter of weeks. And while I doubt Facebook will be unseated anytime soon, it wouldn't take long for someone to create a much less monetized competing version if they ever really alienate a significant portion of their base.

User avatar
Nosferatu
Posts: 118
Joined: Wed Feb 21, 2007 9:07 am
Location: Michigan

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Nosferatu » Sat Feb 04, 2012 9:57 am

mlebuf wrote:Jason Zweig discusses the Facebook IPO and the St. Petersburg Paradox in his latest WSJ column:

http://online.wsj.com/article/SB1000142 ... inance_PF4
At the end of 2010, 608 million people actively used Facebook every month; by this past Dec. 31, 845 million people did. If Facebook keeps growing that fast, more than 22 billion people will be using it 10 years from now, or three times the estimated population of the planet today.
Image

Harold
Posts: 3154
Joined: Sat Mar 03, 2007 7:50 pm
Location: San Francisco

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Harold » Sat Feb 04, 2012 9:59 am

nisiprius wrote:What's impressive to me is how many geezers and geezettes actually did set up Facebook pages.
Maybe it's the only way they have to see pictures of their grandkids -- and (quite reasonably) don't see what the rest of the fuss is about and don't bother with it.

User avatar
market timer
Posts: 6191
Joined: Tue Aug 21, 2007 1:42 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by market timer » Sat Feb 04, 2012 10:35 am

nisiprius wrote:One observations about Facebook, which I dislike and don't "get." I've been helping with the contact list for my high school's upcoming fiftieth reunion, trying to find people whose contact information is missing or out of date, and I've been astonished a) at how many we've found via Facebook, and b) what the nature of their Facebook pages are like. There are dozens of alums who set up Facebook pages and obviously abandoned them and never did a thing with them. Almost no updates, almost no postings, maybe their picture, maybe a mention of the high school and college they attended, maybe a hint of what city they live in, and that's practically it. They don't answer messages left for them, they are obviously no longer checking the page. But it's there. And these are people who don't have any other Web presence to speak of; a regular Google search doesn't find them, and the phone directories won't find them unless you've at least know what state they're living in.

What's impressive to me is how many geezers and geezettes actually did set up Facebook pages.
Based on it being your 50-year reunion, your cohort is 67/68 years old. Their mortality rate is 1.5%/year. In other words, someone who set up a FB page 3 years ago, unconditionally has about a 96% chance of being alive today. That may explain some of the non-responses.

User avatar
Jay69
Posts: 1801
Joined: Thu Feb 17, 2011 9:42 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Jay69 » Sat Feb 04, 2012 10:50 am

Only one reason for FB here, kids and sports. Its about the only way to get practice updates, game changes etc.

If it was not for that I would kick it to the curb.

Will the stock go up? No clue, I would have thought Google would have not done so well from there IPO, shows what I know, they are up somthing like 450% in what 12 years.
"Out of clutter, find simplicity” Albert Einstein

User avatar
og15F1
Posts: 347
Joined: Wed Dec 08, 2010 12:08 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by og15F1 » Sat Feb 04, 2012 11:57 am

The IPO will be a disaster because your Facebook page is messed up? What does that even mean?

User avatar
market timer
Posts: 6191
Joined: Tue Aug 21, 2007 1:42 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by market timer » Sat Feb 04, 2012 12:31 pm

og15F1 wrote:The IPO will be a disaster because your Facebook page is messed up? What does that even mean?
Timeline

User avatar
gotherelate
Posts: 845
Joined: Wed May 28, 2008 6:57 pm
Location: Texas

Re: Facebook IPO will be the biggest disaster in IPO history

Post by gotherelate » Sat Feb 04, 2012 12:32 pm

richard wrote:OTOH, buying in an extremely popular and highly publicized IPO doesn't seem the best course.
Tell that to the folks who got in on the Google IPO. Of course, that was a bit different, being a Dutch Auction.
-Grandpa | I'd rather see where I'm going than see where I've been.

User avatar
nisiprius
Advisory Board
Posts: 39800
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Facebook IPO will be the biggest disaster in IPO history

Post by nisiprius » Sat Feb 04, 2012 12:34 pm

market timer wrote:Based on it being your 50-year reunion, your cohort is 67/68 years old. Their mortality rate is 1.5%/year. In other words, someone who set up a FB page 3 years ago, unconditionally has about a 96% chance of being alive today. That may explain some of the non-responses.
Your statistics sound about right, and I hear about a couple of deceased classmates every year. There must be some sad unintended ghost pages, but so, far, all of the people I "found" through Facebook pages were alive. Of course, if people are deceased, provided their name isn't too common, simply Googling on their name tends to find their obituary if nothing else, and I tend to do that first, so I'm talking for the most part about "people I searched for on Facebook after failing to find them at obituary.com."

(My college alumni magazine is depressing these days. My class keeps getting closer and closer to the front of the "class notes" section, and more often leads off with "We are saddened to report that...").
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

ilovedogs
Posts: 208
Joined: Thu Sep 27, 2007 8:00 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by ilovedogs » Sat Feb 04, 2012 12:41 pm

Just wondered if anyone ever asked Facebook for the answers and proof of how many of those users came back.

I registered again each time a web place tells me I have to access through Facebook, which has been going on for more than five years, when I was not even trying to access Facebook but another website. I am one person. I probably have 20 Facebook individual registrations.

Just saying it might not be what it seems to be.

KyleAAA
Posts: 7768
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by KyleAAA » Sat Feb 04, 2012 12:41 pm

ilovedogs wrote:Just wondered if anyone ever asked Facebook for the answers and proof of how many of those users came back.


Yeah, that's in the filings

User avatar
ladders11
Posts: 845
Joined: Fri Nov 14, 2008 4:20 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by ladders11 » Sat Feb 04, 2012 12:42 pm

The minute this company goes public, the game is over for Zuckerberg. I would not be surprised if this is an IPO perfectly timed for the peak of the company's valuation.

They know that their "active users" stat is exaggerated just like "hits" on a webpage.

They know that they can't "cross the line" with the sale of user's data, or too much advertising, or user fees. If they do, the users walk, and/or a competitor gains traction. The problem is that for the company to really be worth what it is valued at, they would need to cross the line. It is a paradox, and the only way to win is to cash out.
nisiprius wrote:There are dozens of alums who set up Facebook pages and obviously abandoned them and never did a thing with them. Almost no updates, almost no postings, maybe their picture, maybe a mention of the high school and college they attended, maybe a hint of what city they live in, and that's practically it. They don't answer messages left for them, they are obviously no longer checking the page. But it's there.
I can second this observation, and while doing so, whip out my "younger generation" badge for those who need validation. There are lots of users who have their account because they needed to do something one time. Others were curious about all the hype. Others were looking someone up. Others were taking advantage of some sort of coupon or promotion. Others wanted to comment on or access some other website. Others wanted to play a game.
nisiprius wrote:What's impressive to me is how many geezers and geezettes actually did set up Facebook pages.
And this is by company design: they did a great job of using their users to recruit new users. They even reached the rare "third level" where old people figure out how sign up. I know that I have received invites from a large and diverse bunch.

This "virus" style expansion of the user base, combined with the multiplying reasons to compel new sign-ups, have accomplished the challenge this company took on: get as many users as possible, and cash out while enough people still think it is worth more than Fort Knox. Before competitors get established and before investors find out there's very harsh limits on revenue per user.

User avatar
FNK
Posts: 1360
Joined: Tue May 17, 2011 7:01 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by FNK » Sat Feb 04, 2012 12:47 pm

HoosierJim wrote:Facebook noticed the growth curve was doing this.... http://www.google.com/trends/?q=faceboo ... all&sort=0 and decided to get some cash while the getting was good.
Oh, sweet, the logistic curve in the wild.

Here's a prediction you can count on: whenever you see something, anything, increasing exponentially, expect it to flex and become a logistic instead. After that it may stay steady or drop off again. Singularities almost never happen, and when they do happen (e.g. black holes), all bets are off.

User avatar
market timer
Posts: 6191
Joined: Tue Aug 21, 2007 1:42 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by market timer » Sat Feb 04, 2012 1:53 pm

FNK wrote:
HoosierJim wrote:Facebook noticed the growth curve was doing this.... http://www.google.com/trends/?q=faceboo ... all&sort=0 and decided to get some cash while the getting was good.
Oh, sweet, the logistic curve in the wild.

Here's a prediction you can count on: whenever you see something, anything, increasing exponentially, expect it to flex and become a logistic instead. After that it may stay steady or drop off again. Singularities almost never happen, and when they do happen (e.g. black holes), all bets are off.
Image

I actually expect this one will reach a singularity someday, perhaps not in my lifetime.

Image

While this one is the biggest bubble on earth.

User avatar
Liquid
Posts: 301
Joined: Sat Aug 06, 2011 10:17 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Liquid » Sat Feb 04, 2012 2:09 pm

market timer wrote:
Image

While this one is the biggest bubble on earth.
Plenty of space left before this one pops, luckily food becomes ever cheaper.

Lollytiger
Posts: 164
Joined: Sun May 08, 2011 10:12 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Lollytiger » Sat Feb 04, 2012 2:11 pm

I'm glad I didn't try to short the world's population in 700 BC.

User avatar
SimpleGift
Posts: 3396
Joined: Tue Feb 08, 2011 3:45 pm
Location: Central Oregon

Re: Facebook IPO will be the biggest disaster in IPO history

Post by SimpleGift » Sat Feb 04, 2012 4:09 pm

FNK wrote:Here's a prediction you can count on: whenever you see something, anything, increasing exponentially, expect it to flex and become a logistic instead. After that it may stay steady or drop off again.
Since we're already on a giant "off topic" detour here (apologies to the OP):

Your prediction is already coming true for the world's population. The rate of increment of global population growth is already starting to decline and the curve is beginning to flex and level off, just as you describe. Don't see why this shouldn't apply to Facebook's growth trend also, if it hasn't happened already.

Image

User avatar
Imperabo
Posts: 1109
Joined: Fri Aug 29, 2008 1:00 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Imperabo » Sat Feb 04, 2012 4:21 pm

ladders11 wrote: They know that their "active users" stat is exaggerated just like "hits" on a webpage. . . .

There are lots of users who have their account because they needed to do something one time.

I must live in a strange little pocket of the universe then, because probably 90% of the people I know are reasonably active Facebook users. That counts both young and (somewhat) old. Of course, this might partly be because I only still know many of them because they use Facebook.

I do agree with the notion that monetizing Facebook enough to justify $100 billion market cap will kill it though, and that's why I wouldn't invest in it.

User avatar
ladders11
Posts: 845
Joined: Fri Nov 14, 2008 4:20 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by ladders11 » Sat Feb 04, 2012 4:56 pm

Imperabo wrote:
ladders11 wrote: They know that their "active users" stat is exaggerated just like "hits" on a webpage. . . .

There are lots of users who have their account because they needed to do something one time.

I must live in a strange little pocket of the universe then, because probably 90% of the people I know are reasonably active Facebook users. That counts both young and (somewhat) old. Of course, this might partly be because I only still know many of them because they use Facebook.

I do agree with the notion that monetizing Facebook enough to justify $100 billion market cap will kill it though, and that's why I wouldn't invest in it.
I don't doubt that some people are very involved with it. But the active user stat is "exaggerated" in two ways: first, it is an artificially high number that does not reflect what it purports to; and second, it is regarded as more important than it is. What is important is how many people see the ads and engage with a product or service that is being sold. It matters what real value is provided by what facebook is selling. I don't see this our there.

It was good strategy, low costs, and a lack of viable competition that allowed facebook's founders to delay their IPO long enough to maximize their own returns. Had they floated this years earlier, much more of the equity gains would have been socialized. I suspect they're slow-rolling.

User avatar
ElJay
Posts: 689
Joined: Tue Jun 12, 2007 6:08 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by ElJay » Sat Feb 04, 2012 5:44 pm

The fact is that a new time waster will come along eventually and people will someday flock to that instead. I do wish the marketing departments of other companies would stop latching themselves onto Facebook. I do not like having to visit Facebook to read about new products and company information. I do not want to "like" you to read this information.

It does feel like Facebook is a new AOL which has its own sort of proprietary content that you can't get anywhere else. Unlike AOL in the 1990s, people and companies are now deliberately allowing Facebook to create this situation, even when a perfectly viable and flexible alternative (i.e. normal corporate websites) already exists.

brianH
Posts: 329
Joined: Wed Aug 12, 2009 12:21 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by brianH » Sat Feb 04, 2012 6:59 pm

ladders11 wrote:They know that they can't "cross the line" with the sale of user's data, or too much advertising, or user fees. If they do, the users walk, and/or a competitor gains traction. The problem is that for the company to really be worth what it is valued at, they would need to cross the line. It is a paradox, and the only way to win is to cash out.
Agreed.

Someone mentioned Digg earlier. One of the main reasons people migrated to Reddit was Digg's sudden inclusion of ads/paid placements of links in the users' streams. A site's value to a user is based on a signal/noise ratio. At some unknown point, the ratio tips too far and users leave en masse.

Now that FB won't be privately controlled, what are they going to do to extract $125/user worth of value out of the service. Sidebar ads only get you so far, eventually FB will need to start allowing advertisers to select very specific targets (gender, location, interests, religion, etc.) to insert relevant ads in the main feed. When you visit FB and your feed is 80% ads and 20% inane updates from the usual people (e.g. just got back from my jog/shower), who will stick around?

I deleted my account almost a year ago, and I don't miss it. I consider FB to be one of the least trustworthy companies out there.

User avatar
sometimesinvestor
Posts: 1250
Joined: Wed May 13, 2009 6:54 am

Re: Facebook IPO will be the biggest disaster in IPO history

Post by sometimesinvestor » Sat Feb 04, 2012 10:28 pm

Since to my surprise nobody else has said it I will. I predict Facebook will not be the biggest disaster in ipo history assuming the definition is the largest amount of money lost by first day purchasers.I even think a purchase at the first day high will provide a positive return within 5 years.I know I certainly won't buy for at least 2 w eeks.But, It won't go bankkrupt within the year and thus won't be as bad for purchasers as ome of the internet ipos of 1999/2000 or some of the chinese ipos that have happend in the last two years

KyleAAA
Posts: 7768
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Facebook IPO will be the biggest disaster in IPO history

Post by KyleAAA » Sun Feb 05, 2012 3:35 pm

ladders11 wrote: What is important is how many people see the ads and engage with a product or service that is being sold. It matters what real value is provided by what facebook is selling. I don't see this our there.
For what it's worth, most of the people I know who do serious advertising on facebook regard it to be one of the best-value places to direct their advertising dollars. They qualify that by saying you really have to know how to do it right. The value is definitely there for advertisers, though.

Sidney
Posts: 6736
Joined: Thu Mar 08, 2007 6:06 pm

Re: Facebook IPO will be the biggest disaster in IPO history

Post by Sidney » Sun Feb 05, 2012 3:52 pm

I didn't realize that 12% of their revenue comes from one source.
I always wanted to be a procrastinator.

Post Reply