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.
User avatar
dave66
Posts: 324
Joined: Mon Sep 05, 2011 5:38 am

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

Post by dave66 » Sun Feb 05, 2012 4:55 pm

People keep comparing FB to Google and Apple, thereby assuming it will perform as well. The only problem is that, those two companies actually have real substance. They have something to offer, other than just being popular. FB is built on social habits... ie: trend. People thought MySpace was all the rage. Now look at it. If you told somebody to go to your MS page now, they'd laugh at you. When young people decide something is over, then it's over. There's nothing you can do about it. It's like investing in a dress some actress wore on the Oscars. Here today, gone tomorrow. Zuckerberg just turning 30 could be enough to turn FB sour with the cool kid crowd. And then, there it goes... Onto the next hip thing. I do believe they have it together more than MySpace did. But they are no Apple or Google... Not by a long shot.

InsideTheCult
Posts: 58
Joined: Thu Nov 10, 2011 11:24 pm

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

Post by InsideTheCult » Sun Feb 05, 2012 6:54 pm

mpt follower wrote:
natureexplorer wrote: I am a small minded guy: have no vision and am risk adverse.
I am exactly the same. We are the archetype of a Boglehead.
Here is exactly where you should be.
Pretending the markets are efficient, and sticking to index funds.

mhalley
Posts: 6009
Joined: Tue Nov 20, 2007 6:02 am

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

Post by mhalley » Mon Feb 06, 2012 4:16 am

Certainly the IPO will be great for Zuckerberg and his cronies, but this article raises concerns about how little control the shareholders will have over the company.
http://www.slate.com/articles/business/ ... pany_.html
There is no question that he has certainly done a good job of promoting facebook up to now. Only time will tell if it is the next goople (google/appple)
Mike

User avatar
FNK
Posts: 1359
Joined: Tue May 17, 2011 7:01 pm

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

Post by FNK » Mon Feb 06, 2012 9:55 am

market timer wrote:Image

I actually expect this one will reach a singularity someday, perhaps not in my lifetime.
As the matter of fact, you are correct. The financial equivalent of a black hole is hyperinflation. Cf. Weimar Republic and Zimbabwe (the latter in our lifetimes!) So some day the dollar may go down the drain.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Mon Feb 06, 2012 11:09 am

dave66 wrote:People keep comparing FB to Google and Apple, thereby assuming it will perform as well. The only problem is that, those two companies actually have real substance. They have something to offer, other than just being popular. FB is built on social habits... ie: trend. People thought MySpace was all the rage. Now look at it. If you told somebody to go to your MS page now, they'd laugh at you. When young people decide something is over, then it's over. There's nothing you can do about it. It's like investing in a dress some actress wore on the Oscars. Here today, gone tomorrow. Zuckerberg just turning 30 could be enough to turn FB sour with the cool kid crowd. And then, there it goes... Onto the next hip thing. I do believe they have it together more than MySpace did. But they are no Apple or Google... Not by a long shot.
There are a few flaws with this argument. First, facebook isn't just for kids. EVERYBODY is on facebook. I don't know any 30-somethings without facebook any more than I know any 20-somethings or teens without it. And I know relatively few 40-somethings without it. This is something EVERYBODY is in on. If the "cool kids" decide to quit, so what? Facebook will have a decade or more to figure something out. What's more, the older demographic is FAR MORE LIKELY to interact positively with ads on the site, so all the kids quitting wouldn't even have a big financial impact. Adults spend more money than kids, after all. So let the kids leave. That won't kill facebook.

And as mentioned before, Myspace is apples to oranges. Myspace was never even 1/10th as dominant as Facebook has become, even at its height. I'm not sure what the fate of Facebook will be, but it won't be Myspace's fate.

Sidney
Posts: 6691
Joined: Thu Mar 08, 2007 6:06 pm

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

Post by Sidney » Mon Feb 06, 2012 11:15 am

I am always amazed at how many people don't block ads on their browser. When I show people how easy it is they look at me like I invented the wheel.
I always wanted to be a procrastinator.

User avatar
HomerJ
Posts: 11564
Joined: Fri Jun 06, 2008 12:50 pm

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

Post by HomerJ » Mon Feb 06, 2012 11:17 am

Liquid wrote:
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.
What happened in 500 BC? I think I see the Black Plaque in that chart around 1300 AD...

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 » Mon Feb 06, 2012 11:21 am

KyleAAA wrote:
dave66 wrote:People keep comparing FB to Google and Apple, thereby assuming it will perform as well. The only problem is that, those two companies actually have real substance. They have something to offer, other than just being popular. FB is built on social habits... ie: trend. People thought MySpace was all the rage. Now look at it. If you told somebody to go to your MS page now, they'd laugh at you. When young people decide something is over, then it's over. There's nothing you can do about it. It's like investing in a dress some actress wore on the Oscars. Here today, gone tomorrow. Zuckerberg just turning 30 could be enough to turn FB sour with the cool kid crowd. And then, there it goes... Onto the next hip thing. I do believe they have it together more than MySpace did. But they are no Apple or Google... Not by a long shot.
There are a few flaws with this argument. First, facebook isn't just for kids. EVERYBODY is on facebook. I don't know any 30-somethings without facebook any more than I know any 20-somethings or teens without it. And I know relatively few 40-somethings without it. This is something EVERYBODY is in on. If the "cool kids" decide to quit, so what? Facebook will have a decade or more to figure something out. What's more, the older demographic is FAR MORE LIKELY to interact positively with ads on the site, so all the kids quitting wouldn't even have a big financial impact. Adults spend more money than kids, after all. So let the kids leave. That won't kill facebook.

And as mentioned before, Myspace is apples to oranges. Myspace was never even 1/10th as dominant as Facebook has become, even at its height. I'm not sure what the fate of Facebook will be, but it won't be Myspace's fate.
Even if Facebook is some sort of phase change or revolution, this does not mean that early investors will be successful. The only thing that revolutionary new companies guarantee is a high price.

Please see history of airline and railroad investment...

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Mon Feb 06, 2012 11:22 am

Liquid wrote:
Even if Facebook is some sort of phase change or revolution, this does not mean that early investors will be successful. The only thing that revolutionary new companies guarantee is a high price.

Please see history of airline and railroad investment...
I'm not sure what you mean. Early investors have already been insanely successful. An IPO is the time for early investors to get OUT, not in. Anybody who buys into the IPO is not an early investor.

FafnerMorell
Posts: 686
Joined: Mon Sep 15, 2008 10:27 am

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

Post by FafnerMorell » Mon Feb 06, 2012 11:36 am

I seem to recall how Amazon and Google were going to be IPO disasters - especially Google, since they were "doing it all wrong" with some sort of fancy reverse Dutch auction or whatever. I don't recall exactly how things worked out in the short-term, but it seems like they're both doing OK, although there's still a number of vocal folks predicting doom.

That said, it's not too hard to imagine Amazon's business model lasting indefinitely. Buy stuff via internet, it arrives either on your Amazon-friendly gadget (for goods comprised entirely of electrons) or at your residence a few days later. Google is a bit tougher - they've got search locked down, but are still looking for more and having at least moderate success - it's entirely likely that 30 years from now, young adults will be shocked to learn that Google got it's start as a search engine web page ("You mean they didn't always build cold-fusion water-purifiers and teleporters? What did people use for money before there were Gcoins?"). FB just seems a bit too ethereal to last for decades.

etm
Posts: 138
Joined: Sun May 23, 2010 1:31 pm

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

Post by etm » Mon Feb 06, 2012 11:52 am

The weird thing about Facebook is that the pages look like badly designed web pages from 1995.

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 » Mon Feb 06, 2012 12:05 pm

KyleAAA wrote:
Liquid wrote:
Even if Facebook is some sort of phase change or revolution, this does not mean that early investors will be successful. The only thing that revolutionary new companies guarantee is a high price.

Please see history of airline and railroad investment...
I'm not sure what you mean. Early investors have already been insanely successful. An IPO is the time for early investors to get OUT, not in. Anybody who buys into the IPO is not an early investor.
Good point, my statement was referring to the IPO.

Miskatonic
Posts: 97
Joined: Sun Feb 20, 2011 6:08 pm

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

Post by Miskatonic » Mon Feb 06, 2012 12:14 pm

Facebook is a curios thing by both the novelty of service they offer and the speed with which they arose. I can't say I'm sanguine about their long term prospects. As others have pointed out, modern people from 10 to 90 have found usefulness in being electronically connected to family and friends. Facebook's central proposition and resource is that currently enough people are using it that it's useful to others. Should enough people start trickling or streaming away from Facebook to another system of social connectivity, Facebook is kaput.

Does Facebook have a substantial enough moat to ward off competition? I don't think so.

The Myspace comparison is apt in that early (youthful) adopters helped create the axis of social networking upon which older, less adventurous net citizens came limping in. When enough of the young "twitchy" users started leaving Myspace for greener electronic pastures (and a better platform in Facebook) the tipping point was very fast in coming. Someone said that Facebook has a decade to figure things out should problems arise. No industry I can think of, certainly nothing in the electronics/internet world has more than a year to spot problems and implement corrections or risk being permanently crippled.

If the younger set of Facebook users are the canary in the coal mine to any invasive changes Facebook may be forced to make due to the exigencies of a public board and stockholders, the trickle of defections will lead to a torrent. When the kids and grandkids are posting their pictures and soccer schedule on a new platform, the family along with the Grandparents will be forced to follow them. Here, Facebook looks like Myspace- quick death.

My guess (as worthless as any guess) is that the future of social interactivity will become decentralized and move from a web site model to mini applications that follow a basic set of cross platform standards similar to HTML. Your online social life then will be handled by Apps on your phone, tablet, TV and home computer.

But what do I know, I'm not even on Facebook. :lol

User avatar
dave66
Posts: 324
Joined: Mon Sep 05, 2011 5:38 am

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

Post by dave66 » Mon Feb 06, 2012 3:02 pm

KyleAAA wrote:
dave66 wrote:People keep comparing FB to Google and Apple, thereby assuming it will perform as well. The only problem is that, those two companies actually have real substance. They have something to offer, other than just being popular. FB is built on social habits... ie: trend. People thought MySpace was all the rage. Now look at it. If you told somebody to go to your MS page now, they'd laugh at you. When young people decide something is over, then it's over. There's nothing you can do about it. It's like investing in a dress some actress wore on the Oscars. Here today, gone tomorrow. Zuckerberg just turning 30 could be enough to turn FB sour with the cool kid crowd. And then, there it goes... Onto the next hip thing. I do believe they have it together more than MySpace did. But they are no Apple or Google... Not by a long shot.
There are a few flaws with this argument. First, facebook isn't just for kids. EVERYBODY is on facebook. I don't know any 30-somethings without facebook any more than I know any 20-somethings or teens without it. And I know relatively few 40-somethings without it. This is something EVERYBODY is in on. If the "cool kids" decide to quit, so what? Facebook will have a decade or more to figure something out. What's more, the older demographic is FAR MORE LIKELY to interact positively with ads on the site, so all the kids quitting wouldn't even have a big financial impact. Adults spend more money than kids, after all. So let the kids leave. That won't kill facebook.

And as mentioned before, Myspace is apples to oranges. Myspace was never even 1/10th as dominant as Facebook has become, even at its height. I'm not sure what the fate of Facebook will be, but it won't be Myspace's fate.
Prodigy, Geocities, AOL, UseNet, Compuserve, ICQ, Friendster, Digg, SixDegrees, MySpace...... Should I keep going? All based on people's social habits... All dead for the most part. But FB is somehow different? I doubt it. Networking is based on trend... The bigger a company gets and the more it tries to make money, the more it will annoy people and fall out of vogue. People on the internet are anti conformist and anti establishment by nature... They want stuff that's new, hip and free.... No ads. Thus the constant turnover rate of these networks and companies. You don't have to be 20 to be trendy... But kids lead the way. Once kids jump ship because they've decided there's some new hipper site that their friends are on, they'll talk older relatives into going. And the pattern continues.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Mon Feb 06, 2012 3:06 pm

dave66 wrote:
Prodigy, Geocities, AOL, UseNet, Compuserve, ICQ, Friendster, Digg, SixDegrees, MySpace...... Should I keep going? All based on people's social habits... All dead for the most part. But FB is somehow different? I doubt it. Networking is based on trend... The bigger a company gets and the more it tries to make money, the more it will annoy people and fall out of vogue. People on the internet are anti conformist and anti establishment by nature... They want stuff that's new, hip and free.... No ads. Thus the constant turnover rate of these networks and companies. You don't have to be 20 to be trendy... But kids lead the way. Once kids jump ship because they've decided there's some new hipper site that their friends are on, they'll talk older relatives into going. And the pattern continues.
I just don't see how a single example you posted is relevant to Facebook. They have practically nothing in common with Facebook so far as I can tell. I also see no evidence that people on the internet are anti-conformist and anti-establishment by nature. That may have been true 10 years ago, but everybody is on the internet now and everybody is on Facebook.

You also underestimate the power of all that data Facebook has. Data which none of the other services you mentioned could even dream of. Facebook's success is not based on social habits.

User avatar
ladders11
Posts: 808
Joined: Fri Nov 14, 2008 4:20 pm

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

Post by ladders11 » Mon Feb 06, 2012 5:22 pm

KyleAAA wrote:I just don't see how a single example you posted is relevant to Facebook. They have practically nothing in common with Facebook so far as I can tell. I also see no evidence that people on the internet are anti-conformist and anti-establishment by nature. That may have been true 10 years ago, but everybody is on the internet now and everybody is on Facebook.

You also underestimate the power of all that data Facebook has. Data which none of the other services you mentioned could even dream of. Facebook's success is not based on social habits.
I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.

FB value is clearly based on their users, but they don't pay their users, or have any type of contract with their users. It is too optimistic to value the data as if it were a permanent fixture - and the users a "farm" - because with farming, the ground can't just take off or tune out. Maybe it is a Malibu beach data farm?

Sulvar
Posts: 293
Joined: Wed May 26, 2010 2:27 pm

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

Post by Sulvar » Mon Feb 06, 2012 5:28 pm

Does Facebook have a substantial enough moat to ward off competition? I don't think so.
From their S-1 IPO filing facebook has

*845 million monthly active users
*2.7 billion likes & comments per day
*250 million photos uploaded every day
*100 billion friendships

I think that is a HUGE moat. When the entire point of being on facebook is because everyone else you know is on facebook, I don't see how another company can come along and compete with that very easily. Just doing some goggling, it looks about 2 billion people worldwide are on the internet. Over 40% of them are on facebook. That is just insane.

You can argue that the valuation of facebook at the IPO price is too high, but I don't think that you can seriously argue that someone can come along and replicate what facebook has very easily.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Mon Feb 06, 2012 5:39 pm

ladders11 wrote: I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.
AOL is not a valid example because AOL was never culturally relevant or revolutionary the way Facebook was and is. There ARE NO relevant examples because no such phenomenon has ever happened before. We are in entirely new territory here.
ladders11 wrote: FB value is clearly based on their users, but they don't pay their users, or have any type of contract with their users. It is too optimistic to value the data as if it were a permanent fixture - and the users a "farm" - because with farming, the ground can't just take off or tune out. Maybe it is a Malibu beach data farm?
What Facebook has is far more valuable and far stickier than contracts. Have have community. AOL never did.

FYI, the data is still insanely valuable even if the people behind it close down their accounts. It just becomes monetizable in a different way at that point.
Sulvar wrote: You can argue that the valuation of facebook at the IPO price is too high, but I don't think that you can seriously argue that someone can come along and replicate what facebook has very easily.
Indeed. Just ask Google how difficult it is. Google+ is, by all accounts, a superior site. Better doesn't mean anything.

etm
Posts: 138
Joined: Sun May 23, 2010 1:31 pm

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

Post by etm » Mon Feb 06, 2012 6:32 pm

I don't know. AOL was huge in the mid 90s. The movie 'You've Got Mail' was based on AOL. When AOL had a one day mail outage it was the lead story for the network news because so many people, espeically small businesses, used AOL's mail. I had lots of friends on AOL. AOL died because the web became more robust and you could around the year 2000 get a fast cable modem in most parts of the US. Speed + good web sites is what killed AOL. Plus, chatting in chat rooms was fun for five or six years, but after that it became old. Will we still be 'friending' and 'liking' six years from now with the same enthusiasm we are now? I doubt it.

User avatar
rustymutt
Posts: 3729
Joined: Sat Mar 07, 2009 12:03 pm
Location: Oklahoma

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

Post by rustymutt » Mon Feb 06, 2012 6:35 pm

I cannot stand Facebook. I prohibit my son from using it, by blocking it's domain name. I allowed it at one time before catching on to the confusion they use to run their ad machines. It worries me that Americans use it like it's some special thing. Pick up the damn phone and call your loved one, and friends. OMG
I'm amazed at the wealth of Knowledge others gather, and share over a lifetime of learning. The mind is truly unique. It's nice when we use it!

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 » Mon Feb 06, 2012 6:39 pm

etm wrote:I don't know. AOL was huge in the mid 90s.
AOL peaked at 26 million users.

etm
Posts: 138
Joined: Sun May 23, 2010 1:31 pm

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

Post by etm » Mon Feb 06, 2012 6:55 pm

Yea, and the US in 1993 probably had about 30 million people who were on-line. Don't forget, you were paying 2.95 an hour to be on AOL. In the early 90s--think 91 or 92 you still didn't have nationwide dial up networks like Earthlink and Mindspring, etc. When AOL went to a flat rate plan I remember AOL started buying private modems around the world to keep up with the demand for their service. They couldn't get enough modems from the manufacturers.

User avatar
MossySF
Posts: 2292
Joined: Thu Apr 19, 2007 9:51 pm
Contact:

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

Post by MossySF » Mon Feb 06, 2012 7:20 pm

AOL -- as the business model in the 90's -- didn't survive. On the otherhand, AOL had so much money at the moment that they were able to buy out Time Warner. So don't assume today's Facebook is tomorrow's. With a huge IPO warchest, they have the money to build and buy who knows what. What did Google have before IPO? Just search. Now look at their portfolio -- they're everywhere -- they're probably spying on your bathroom habits as we speak.

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 » Mon Feb 06, 2012 7:25 pm

AOL got left behind because the internet beyond its borders grew exponentially larger than itself. Myspace got abandoned because a large community of adults grew in another network and all the kiddies eventually migrated over. Facebook has total penetration. There isn't a potential community large enough to get another service off the ground and give people a reason to go to another network.

Facebook has something no other network ever had or possibly ever will have: EVERYONE. People use Facebook because that's where everyone is. How can another network suddenly have everyone on it? What possible reason can you give me or the vast majority of Facebook users to switch when the only reason we use a social network is because it has everyone? You can't suddenly shift from no one to everyone. I can't imagine a bigger moat short of a constitutional amendment.

User avatar
market timer
Posts: 5937
Joined: Tue Aug 21, 2007 1:42 am

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

Post by market timer » Mon Feb 06, 2012 7:35 pm

rustymutt wrote:I cannot stand Facebook. I prohibit my son from using it, by blocking it's domain name. I allowed it at one time before catching on to the confusion they use to run their ad machines. It worries me that Americans use it like it's some special thing. Pick up the damn phone and call your loved one, and friends. OMG
"Everyone's dialed into the conference call? Great! Guess what, I'm really enjoying this new song by STRFKR. I'll take questions now."

User avatar
Epsilon Delta
Posts: 7430
Joined: Thu Apr 28, 2011 7:00 pm

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

Post by Epsilon Delta » Mon Feb 06, 2012 8:13 pm

KyleAAA wrote:
Indeed. Just ask Google how difficult it is. Google+ is, by all accounts, a superior site. Better doesn't mean anything.
I think you need to give Google+ a little more than 4 months. Google+ has only been generally available since late September.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Mon Feb 06, 2012 9:15 pm

Epsilon Delta wrote:
KyleAAA wrote:
Indeed. Just ask Google how difficult it is. Google+ is, by all accounts, a superior site. Better doesn't mean anything.
I think you need to give Google+ a little more than 4 months. Google+ has only been generally available since late September.
The Myspace guy seems to like it. Seems like he's living it up these days.

https://plus.google.com/112063946124358686266/posts

He also has this to say on his Facebook profile:

"Why am I not on MySpace? Because, I left the company in early 2009, and like most of you, I don't like using it anymore.. not a fan of what the new folks have done with MySpace"

http://www.facebook.com/myspacetom

User avatar
dave66
Posts: 324
Joined: Mon Sep 05, 2011 5:38 am

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

Post by dave66 » Tue Feb 07, 2012 12:06 am

ladders11 wrote: I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.

FB value is clearly based on their users, but they don't pay their users, or have any type of contract with their users. It is too optimistic to value the data as if it were a permanent fixture - and the users a "farm" - because with farming, the ground can't just take off or tune out. Maybe it is a Malibu beach data farm?
And what's funny is... AOL (today) has made more money on average per user, than FaceBook. Quite a bit more. These are the numbers that will count when they go public. It won't just be a popularity contest and hype then. The market is going to demand better numbers than that, and they're going to have to work hard to do it. That means more ads and more stuff people don't like. I don't care if half the planet is on FB... It's all based on people's perception... and perceptions change.

I remember when people were predicting that Apple was going to go bust any minute. I actually worry more about Apple now than I did back then. Back then, they worked hard and had something really innovative to offer.. It was an alternative. I felt that would shine through no matter what, and it did. But now? I guarantee you that every kid who goes to work for them, thinks that everything they touch will turn to gold, from the second they walk through the front door. They think they're bullet proof. And that's when companies start blowing it. I've heard more smack talked about Apple by young people in the last couple years than ever before... I've heard people say they flat out hate Apple now. That is not good. When young people who followed something like a cult, start saying they now hate it... it's time to get nervous. In general, the public hates it when things get too popular, too commercial, and too wealthy. People love an underdog.

User avatar
Noobvestor
Posts: 4749
Joined: Mon Aug 23, 2010 1:09 am
Contact:

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

Post by Noobvestor » Tue Feb 07, 2012 12:55 am

Sulvar wrote:
Does Facebook have a substantial enough moat to ward off competition? I don't think so.
From their S-1 IPO filing facebook has

*845 million monthly active users
*2.7 billion likes & comments per day
*250 million photos uploaded every day
*100 billion friendships

I think that is a HUGE moat. When the entire point of being on facebook is because everyone else you know is on facebook, I don't see how another company can come along and compete with that very easily. Just doing some goggling, it looks about 2 billion people worldwide are on the internet. Over 40% of them are on facebook. That is just insane.

You can argue that the valuation of facebook at the IPO price is too high, but I don't think that you can seriously argue that someone can come along and replicate what facebook has very easily.
I have at least four Facebook accounts, various reasons, one of which auto-posts a feed of various sites I want to pay attention to (think: RSS - long story). Thus, I am four users and probably comment a dozen times a day ... except I rarely actually use Facebook, and comment almost never. Oh, and some people friend my profiles sometimes, so there are those friendships too. Oh, and I follow some feeds on FB too - auto-posting profiles and pages, that is. tl;dr Those numbers are probably astronomically off.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

JustinR
Posts: 683
Joined: Tue Apr 27, 2010 11:43 pm

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

Post by JustinR » Tue Feb 07, 2012 6:29 am

KyleAAA wrote:
ladders11 wrote: I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.
AOL is not a valid example because AOL was never culturally relevant or revolutionary the way Facebook was and is. There ARE NO relevant examples because no such phenomenon has ever happened before. We are in entirely new territory here.
That's kind of a useless thing to say, because AOL, Myspace, Digg, Napster, etc. were all "entirely new territories" at their peaks and at the time of their demise. They died because something better came along, or they made a change that their userbase didn't like and they simply left.

If there's one thing you should know about the internet, it's that it is very fickle.

That's not to say that Facebook will share the same fate as those other companies, but the point is, you never know.

KyleAAA wrote:
ladders11 wrote: FB value is clearly based on their users, but they don't pay their users, or have any type of contract with their users. It is too optimistic to value the data as if it were a permanent fixture - and the users a "farm" - because with farming, the ground can't just take off or tune out. Maybe it is a Malibu beach data farm?
What Facebook has is far more valuable and far stickier than contracts. Have have community. AOL never did.
...what? At one point, EVERYONE was on AOL, and AIM.

I know what you're trying to argue, and I'm just as big of a Facebook proponent as the next guy (I've been on it since it launched), but you're going about it the wrong way in my opinion. You shouldn't be arguing that "this time it's different!" or whatever your last five posts have been.

Some good arguments for Facebook surviving are that the people running it are a) obviously very smart, b) flexible and agile enough to match anything competitors can throw at them, c) sensitive to the fact that users are fickle, so they intentionally walk a fine balance between change and familiarity.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Tue Feb 07, 2012 9:12 am

JustinR wrote: That's kind of a useless thing to say, because AOL, Myspace, Digg, Napster, etc. were all "entirely new territories" at their peaks and at the time of their demise.
No, they were not entirely new. They were just rehashes of old concepts that had been around for decades. Facebook is not. Furthermore, none of them had even a tiny fraction of the penetration Facebook enjoys.
JustinR wrote: If there's one thing you should know about the internet, it's that it is very fickle.
Internet users aren't very fickle at all. At least, no more or less than the general population. Marketers have known how to capture the attention of the public for decades now. The internet is not different. I have certainly seen no evidence of this fickleness. Users left Digg and Myspace not because they were fickle, but because other sites had more sustainable competitive advantages. Simple as that. If users were that fickle, do you really think Apple would still be popular? What about Target? It's been "cheap chic" for decades now. People are not fickle. They just respond to certain messages over others. If you have the right message, they will stick around. If you don't, they won't. But it's not because they are fickle. It's just that you never had them to begin with.
JustinR wrote: That's not to say that Facebook will share the same fate as those other companies, but the point is, you never know.
I didn't say Facebook would last forever. I merely said it won't collapse for the same reasons. None of the lessons of those previous companies apply here because Facebook is fundamentally different.

PreserveCapital
Posts: 551
Joined: Thu Mar 05, 2009 3:19 pm

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

Post by PreserveCapital » Tue Feb 07, 2012 9:20 am

facebook claims it earned about $1 billion in 2011 which would support a market cap of maybe 15-20 billion if growth was pedestrian.

It grew 65% last year so the question is whether the rate of growth can continue to accelerate given its current size and market penetration, or as is far more likely, the rate of growth decelerates.

It's very very very hard to grow market cap significantly starting from a 100 billion dollar base.

Apple's spectacular growth since the early 2000's was from a market cap of maybe 5-10 billion. But Apple is also far more profitable. Market cap 432 billion with earnings around 40 billion ish, approx. P/E of 10. google is around 198 billion market cap with a forward P/E of 12, trailing 20.


Additionally there's no way of telling how much of the facebook phenomenon is fad-driven such that at some point over the next five years growth will just hit a brick wall.

Exxon's market cap is ~ 400 billion. Its net earnings available to common shareholders is around 40 billion so it's got a P/E of 10ish. Interesting, similar to Apple's.....

40 billion in sustained long term annual profits vs. 1 billion.....that's a 40 to one ratio. Does facebook deserve a premium of 10x Exxon's or Apple's P/E? (100 vs. 10?) If facebook already has over 800 million unique users each month--assuming that's the metric they should be judged on--how exactly is growth going to occur at anywhere near the same pace it already has? Not saying it won't....but how? The growth curve almost inevitably has to flatten and flatten sharply.



If facebook can multiply earnings and continue moderate growth it's definitely worth 20 - 50 billion but 100 billion? Google's net income available to shareholders is around $10 billion so let's say facebook can get there over the next few years, there's nothing to justify a higher P/E for facebook than for google, so optimistically facebook might be worth 200 billion someday, if it can replicate what google has done in terms of growth.

User avatar
ladders11
Posts: 808
Joined: Fri Nov 14, 2008 4:20 pm

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

Post by ladders11 » Tue Feb 07, 2012 11:22 am

PreserveCapital wrote: It's very very very hard to grow market cap significantly starting from a 100 billion dollar base.
You are really getting down to the nuts and bolts here, and I agree.

It is a fact that they will be a huge, profit-seeking corporation with plenty of equity to blow through. They could buy companies, factories, or power plants. They could throw their egos into new internet businesses - yet it is hard to suggest they can duplicate their success on another venture, given the rarefied air FB is floating in.

It will still be hard to grow.

FWIW, Berkshire Hathaway has a market cap of $197B. Give me 0.4 of a share of BRK for one FB any day. Look at all the assets included: [http://en.wikipedia.org/wiki/List_of_as ... e_Hathaway].

Oh, and what is an "active user"? Interesting: [http://dealbook.nytimes.com/2012/02/06/ ... lly-visit/]

Bongleur
Posts: 2066
Joined: Fri Dec 03, 2010 10:36 am

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

Post by Bongleur » Tue Feb 07, 2012 1:58 pm

Noobvestor wrote: I have at least four Facebook accounts, various reasons, one of which auto-posts a feed of various sites I want to pay attention to (think: RSS - long story).
Interesting... Is this so you can have an RSS feed that 1) does not clog up your actual download pipe and 2) gives you a layer of privacy against tracking bugs, beacons etc?
Seeking Iso-Elasticity. | Tax Loss Harvesting is an Asset Class. | A well-planned presentation creates a sense of urgency. If the prospect fails to act now, he will risk a loss of some sort.

User avatar
MossySF
Posts: 2292
Joined: Thu Apr 19, 2007 9:51 pm
Contact:

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

Post by MossySF » Tue Feb 07, 2012 4:33 pm

The question facing FB is how to monetize their customers. They may not be able to grow their customer number at existing growth rates but they might be able to grow monetization faster. It's what was facing Google when they went IPO. Plenty of search but many were skeptical on how much money you could make putting tiny text ads on a search engine.

There are plenty of valid concerns ... but they don't amount to the title of "biggest disaster in IPO history". Less melodrama please?

User avatar
FNK
Posts: 1359
Joined: Tue May 17, 2011 7:01 pm

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

Post by FNK » Tue Feb 07, 2012 10:45 pm

When you think "I need X", and decide to use the internet to procure X, what site do you go to?

Maybe Amazon or some specialized store - directly to the vendor - when you already have a vendor of choice. Maybe a review site if you know and trust one. The rest of the time you go to your favorite search engine. This is a rare online moment that ads are relevant, useful, desirable to the user, and really really worthwhile to the advertiser.

How is Facebook going to deliver to its advertisers the ROI of Google ads at the scale of Google?

So Facebook is looking to fall victim to one of the classic blunders - the most famous of which is "never get involved in software patent lawsuits", but only slightly less well-known is this: "Never go against Google when your business is on the line."

User avatar
tipswatcher
Posts: 289
Joined: Tue Jun 21, 2011 5:17 pm
Contact:

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

Post by tipswatcher » Tue Feb 07, 2012 11:21 pm

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.
As a former user of Myspace (haven't logged in for 4 years), I will point out that Myspace was purchased by News Corp. (Rupert Murdoch) before the top in that market, but they still managed to destroy it by loading it up with ads ... and we are talking LOADING IT UP WITH ADS ... while at the same time doing nothing to improve the product. Result = disaster.

Facebook, though, is much more clever. The Myspace fiasco will not happen again. Facebook knows what it needs to do.

OK, it is a very interesting company. VERY INTERESTING. It will not be the next AOL. That will not happen.

Now the question for investors is valuation.

10x current earnings? NO. 20x? NO.

40X? hmmm....

After the IPO, expect 100x earnings. You won't get in at 40x.
TIPS: Perfect investment for imperfect times?

oragne lovre
Posts: 482
Joined: Tue Nov 25, 2008 3:34 pm

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

Post by oragne lovre » Tue Feb 07, 2012 11:49 pm

I have no idea which way FB will end up with. I, however, would absolutely not buy any of its shares on IPO day.
The finest, albeit the most difficult, of all human achievements is being reasonable.

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 » Wed Feb 08, 2012 9:32 am

FafnerMorell wrote:
That said, it's not too hard to imagine Amazon's business model lasting indefinitely.

A rational tax code (or enforcement of it) would devastate Amazon. The day they are required to collect sales tax from me is the day I cancel Amazon Prime. If you think about it, how can it be more efficient to have certain goods individually delivered to our houses in trucks rather than pick them up at Wal-Mart with the rest of our regular shopping? It only makes sense for certain specialty items or perhaps a few very easy to ship and expensive items. This is an inefficiency created by a government subsidy.

Valuethinker
Posts: 35629
Joined: Fri May 11, 2007 11:07 am

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

Post by Valuethinker » Wed Feb 08, 2012 9:53 am

Imperabo wrote:
FafnerMorell wrote:
That said, it's not too hard to imagine Amazon's business model lasting indefinitely.

A rational tax code (or enforcement of it) would devastate Amazon. The day they are required to collect sales tax from me is the day I cancel Amazon Prime. If you think about it, how can it be more efficient to have certain goods individually delivered to our houses in trucks rather than pick them up at Wal-Mart with the rest of our regular shopping? It only makes sense for certain specialty items or perhaps a few very easy to ship and expensive items. This is an inefficiency created by a government subsidy.
I believe that the UK is Amazon's second largest market.

Goods in the UK, internet or not, face 17.5% VAT (with one caveat, below).

Amazon is successful in the UK however.

Exception

A loophole has led retailers to ship DVDs and CDs with a retail price below £18, to the offshore tax havens of Jersey and Guernsey, and then to ship them back into the UK-- below the customs VAT threshold.

The government is reviewing this with a promise to lower it to £8 I believe, which will effectively end this loophole.

Another exception: books in the UK (retail or internet) do not attract VAT, neither do newspapers nor magazines. Shipping costs do, however, attract VAT.

FafnerMorell
Posts: 686
Joined: Mon Sep 15, 2008 10:27 am

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

Post by FafnerMorell » Wed Feb 08, 2012 10:31 am

Imperabo wrote:
FafnerMorell wrote:
That said, it's not too hard to imagine Amazon's business model lasting indefinitely.
A rational tax code (or enforcement of it) would devastate Amazon. The day they are required to collect sales tax from me is the day I cancel Amazon Prime. If you think about it, how can it be more efficient to have certain goods individually delivered to our houses in trucks rather than pick them up at Wal-Mart with the rest of our regular shopping? It only makes sense for certain specialty items or perhaps a few very easy to ship and expensive items. This is an inefficiency created by a government subsidy.
Well, the chances of a "rational tax code" are about as likely as personal flying pigs devastating the airline and auto industries. :) Let's see the chances of flying pigs & rational tax codes first before we get too far into predicting their business impact.

Sorry - couldn't resist - but I suspect you're just thinking of the narrow issue of sales tax (rather than a completely rational tax code) and I'm overrearching for the sake of humor. I'll agree that Amazon's evasion of sales tax gives them a powerful business advantage - and if it were to go away, it would hurt their business some. But I don't think it would be the death blow you think it would be. While you're driving your government subsidized auto to Walmart to pick up a physical DVD or book, consuming your time & gas & putting wear-n-tear on your vehicle, I'lll be downloading that stuff electronically & instantly - an area where Amazon (& Apple, and a few others) have a pretty strong advantage regardless of sales tax. With the free movie steaming on my Kindle Fire, Amazon Prime is getting plenty of usage.

Not to mention that for Christmas gifts (and other stuff) that folks send to others (often around the country), having it delivered from the store makes more sense than driving to Walmart, buying and a shipping container and then driving to Post Office/Fedex/UPS and then having them ship it. But I think it varies a lot by goods (I have no interest in internet shopping for groceries).

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Wed Feb 08, 2012 10:39 am

Imperabo wrote: A rational tax code (or enforcement of it) would devastate Amazon.
Amazon seems to disagree, because they are actively working with state governments to figure out an easy way to collect sales tax without having to constantly keep up with hundreds of different tax law changes in every state and municipality. I buy from Amazon because it's convenient, not because it's cheaper. I would still buy from Amazon even if it were more expensive than going to the store (it often is already). I imagine 99% of Amazon's customers would do the same. In any event, Amazon certainly isn't worried about this.

Also, most people don't do "regular shopping" at Wal Mart. Wal Mart is a suburban thing. There is absolutely no place I do regular shopping that carries even half of what I would buy on Amazon and I'm definitely not going to drive to 3 different places over just placing an order online.

And as Valuethinker said above, Amazon does very well in the UK without the benefit of a tax subsidy.

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 » Wed Feb 08, 2012 11:30 am

Amazon seems to disagree, because they are actively working with state governments to figure out an easy way to collect sales tax without having to constantly keep up with hundreds of different tax law changes in every state and municipality.
They have been collecting state taxes for a long time for Target. It's not hard at all, but trying to make it easier doesn't mean they want to collect it.
I buy from Amazon because it's convenient, not because it's cheaper. I would still buy from Amazon even if it were more expensive than going to the store (it often is already). I imagine 99% of Amazon's customers would do the same.


Nonsense.
In any event, Amazon certainly isn't worried about this.
Utter nonsense. Amazon has an operating margin of 4%. You don't think they're worried about what will happen when their prices to the customer increase by ~7%?
Also, most people don't do "regular shopping" at Wal Mart. Wal Mart is a suburban thing.
Most people live in the suburbs. My wife shops there multiple times per week. There are 6 of them in my town of 300k. You can't go anywhere without driving by one. Why would I rather wait days for the mail to come to receive a product I haven't been able to examine in person and will be inconvenient to return if I have to pay more to get it?

There is absolutely no place I do regular shopping that carries even half of what I would buy on Amazon
The variety is indeed a benefit for certain types of products.

And as Valuethinker said above, Amazon does very well in the UK without the benefit of a tax subsidy.
I don't know much about that, but I understand that many things are obscenely expensive in the UK for whatever reason. Perhaps internet purchasing gets around that. Is there a big box superstore on every corner in the UK like there is here except for the most urban of areas?

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 » Wed Feb 08, 2012 11:34 am

And let us not forget that if Amazon had to collect sales tax like Wal-Mart does for online purchases they would lose a huge advantage over Wal-Mart et al in the on-line arena.

User avatar
HomerJ
Posts: 11564
Joined: Fri Jun 06, 2008 12:50 pm

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

Post by HomerJ » Wed Feb 08, 2012 11:35 am

KyleAAA wrote:
ladders11 wrote: I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.
AOL is not a valid example because AOL was never culturally relevant or revolutionary the way Facebook was and is. There ARE NO relevant examples because no such phenomenon has ever happened before. We are in entirely new territory here.
I don't believe that's true. AOL was the Internet to 80% of people who used dial-up. "This time it's different" is what you are saying. Careful with that.

Valuethinker
Posts: 35629
Joined: Fri May 11, 2007 11:07 am

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

Post by Valuethinker » Wed Feb 08, 2012 12:27 pm

Imperabo wrote:
And as Valuethinker said above, Amazon does very well in the UK without the benefit of a tax subsidy.
I don't know much about that, but I understand that many things are obscenely expensive in the UK for whatever reason. Perhaps internet purchasing gets around that. Is there a big box superstore on every corner in the UK like there is here except for the most urban of areas?
- but they are expensive (it depends) online as well as offline so it's unclear this is the issue

On Big Box yes we have them (and our supermarkets do a lot of non food, and in fact, do a lot of non food online). Is retail less competitive in the UK than the USA? Probably once I would have said definitely, now I am not sure (there's nowhere in the UK as dominated, even by Tesco, as WMT does in parts of the USA).

If there was no Amazon it's not like now, in the UK, you could find lots of places to sell you that range of books, CDs or DVDs. Borders is gone. HMV is staggering, etc.

Gas costs more. But then, delivery companies pay that price too.

Our Royal Mail may make a better delivery service than your US Post Office.

In the categories where it dominates (books, DVDs, CDs, electronics) Amazon really does dominate in the UK-- typically 20-40% of any product category. Clothes appliances etc. perhaps much less so (there are lots better clothing sites online).

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Wed Feb 08, 2012 12:47 pm

rrosenkoetter wrote:
KyleAAA wrote:
ladders11 wrote: I am going to have to agree with Dave. I think the most relevant example is AOL, because that was really what the internet was for many people - not only their walled-off content, but chat rooms, and eventually AIM. There was a time that many people used the terms "AOL" and "internet" interchangeably. People would consider AOL safe but the internet fraught with viruses.
AOL is not a valid example because AOL was never culturally relevant or revolutionary the way Facebook was and is. There ARE NO relevant examples because no such phenomenon has ever happened before. We are in entirely new territory here.
I don't believe that's true. AOL was the Internet to 80% of people who used dial-up. "This time it's different" is what you are saying. Careful with that.
But AOL was NOT the internet for the majority of people because most didn't use the internet at all. There wasn't widespread penetration and so the analogy is not valid.

I'm not saying "this time it's different" because this is the first time something like this has ever existed.

KyleAAA
Posts: 6667
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

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

Post by KyleAAA » Wed Feb 08, 2012 1:00 pm

Imperabo wrote: Nonsense.


What is your reasoning for thinking this is nonsense? Decades of retail experience would tend to disagree with you. Ordering an item at home in your underwear is far more convenient than driving to the store. And if history has shown us anything, it's that people will pay a premium for convenience.
Imperabo wrote: Utter nonsense. Amazon has an operating margin of 4%. You don't think they're worried about what will happen when their prices to the customer increase by ~7%?
No, they wouldn't worry. People would pay it just as readily. A few might stop shopping at Amazon, but not enough to make a significant dent in their business. History shows this to be true.
Imperabo wrote:Why would I rather wait days for the mail to come to receive a product I haven't been able to examine in person and will be inconvenient to return if I have to pay more to get it?
Convenience. It's clear that you don't value convenience as much as the average American, and that's fine. But I assure you, the majority would prefer to wait for the mail. Especially for a non-critical item. Do you really have to inspect a book or dvd in the store? What about food-stuff? You couldn't inspect that even if you wanted to. That argument is overblown.

For the record, I've only once had to return an item I bought on Amazon and the process was actually much easier and more convenient than when I've had to do it at a store.

Imperabo wrote: I don't know much about that, but I understand that many things are obscenely expensive in the UK for whatever reason. Perhaps internet purchasing gets around that. Is there a big box superstore on every corner in the UK like there is here except for the most urban of areas?
No, it's just the dynamics at play I've mentioned above.

Also, you're forgetting that Amazon will still be cheaper EVEN IF they have to start collecting sales tax due to their distribution model.

newbie001
Posts: 397
Joined: Mon Nov 24, 2008 1:50 am

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

Post by newbie001 » Wed Feb 08, 2012 1:11 pm

Color me skeptical that FB will stay on top of the mountain. FB for now makes its money off of data collection, and I just can't believe that a better data-mining operation won't come along in the next decade, especially one that doesn't rely on voluntary disclosure. Google with its technology will eventually be able to tell what color underwear we're wearing on a given day.

Plus, despite the conventional "nobody under 20 can imagine life without FB" thinking, I could see a social media "fatigue" happening someday, although not any time soon. If I could invest in shrinks who deal with people who have been warped by excessive internet exposure, I would be a happy man.

But who knows? Maybe FB will diversify its business and be the greatest IPO ever.

User avatar
ryuns
Posts: 3478
Joined: Tue Aug 07, 2007 6:07 pm
Location: Sacramento, CA

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

Post by ryuns » Wed Feb 08, 2012 3:04 pm

Last week's print edition of the Economist has some compelling reads about the extremely valuable company. My take was that is it is difficult to justify the P/E that FBOOK will carry, without hoping for the longshots that will skyrocket profits. There are definite ways in which to imagine that the company will tank, some that it will continue to do revolutionary things, and some that it will continue along its path, not imploding, but never justifying its full valuation.
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton

Post Reply