Facebook IPO - Overpriced or not at $100B? - Printable Version
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Facebook IPO - Overpriced or not at $100B? - Riad C. - 02-04-2012 09:48 AM
http://blogs.wsj.com/marketbeat/2012/02/ - Read this, and then post your opinion.
Definitely overpriced IMHO. I'm not an investor or anything, so I'm looking at this from the point of view of a webmaster. If anything is wrong, feel free to tell me, remember this is all estimation.
Approximately 2B people use the internet, and you can say about 1B use it daily. If FB holds around 850M active accounts /mo, it poses the question of how FB's revenue will increase. FB makes money from ads, simple, any company that advertises already advertises of Google, and with the current global economy businesses are more weary to fork out hundreds of thousands of dollars into advertising. So we can assume most businesses who advertise with FB is constant with minimal flunctuations, and anyone who isn't advertising with FB now may or may not advertise, either way, if they were to already advertise they would have been now.
It's just like Google's shares, Google doesn't get extreme bursts of traffic daily, since almost everyone knows about it, meaning that it's traffic is constant - and those who don't use it are already aware of it. This means Google's revenue is consistent on a month-to-month basis give or take a few thousand dollars here and there, not to mention they lost 8% in the last financial year.
This in total leads me to believe that FB has maximised their daily profit, sure they will have fluctuations on a monthly basis and some growth, but anyone with access to the internet has heard of FB, which means most people have registered, 850M active users is almost everyone online, since many would be inactive.
IMO, investing in FB may lead to some profit, but nothing so drastic where you make millions. FB's ad click rate has been like this for the past 3/4 years - LOW. You go on FB for your friends, pictures, people don't even notice the ads.
That's about it, that's my 2 cents.
RE: Facebook IPO - Overpriced or not at $100B? - Jag100 - 02-04-2012 10:05 AM
(02-04-2012 09:48 AM)The Elite Wrote: http://blogs.wsj.com/marketbeat/2012/02/ - Read this, and then post your opinion.
Though there revenue is based around the ad's. They still have room to increase profit margins, you can never say that there profit margin as "maximised", It can't never be maximised. You mentioned Google's revenue if you have noticed before there loss there was an increasing tread year on year, This is cause Google is branching out getting manufacturers invest in them for products like Android and Google's own Cloud services (Major corporations are investing in this to cut there IT costs).
The 8% loss could be related to Microsoft plans to compete them in the Cloud market, Which if you check the news has gathered a lot more interest to companies cause they don't want to change there OS to Chromium. Tough economic conditions have made it hard for many companies to keep a steady growth of profit but I don't see Google making a loss for too long.
Saying a profit margin has maximized is saying the company can no longer grow or its exhaust all its ideas which for one Facebook hasn't if anything they have plenty of options. Facebook will eventually look in to other ways to get more revenue from its users, I can think of a few ways of them increasing there revenue and doing a bit of research in this I can see some profit increasing ideas out there.
Kinda surprised people have bought them at a high price but I'm pretty sure Facebook could maintain a price like that as long as they don't do anything radical.
RE: Facebook IPO - Overpriced or not at $100B? - smexy - 02-06-2012 07:19 AM
After eight years (birthday was either yesterday or today) Facebook is now the leading world-wide traffic website as it now accounts for 3.416% of all web traffic (in the article where I found this statistic they didn't mention Google.com). FB is also becoming more and more profitable with new marketing innovations,
(Source: http://www.splatf.com/2012/02/facebook-revenue/ )
Even though Mark Fuckaberg hasn't specified which type of stock he will be selling (owning 24% stack in ruling stock of FB) this IPO will still be a big buy. FB executives hired Wall Street jews JP, Stan Morgan, and two other firms I current cannot reminisce the names of to sell their stock and having exclusive rights to sell FB shares. These big boys will be calling secondary market players to fill large orders at first-rate prices. So the plan, when FB goes public, brokers are going to be selling large quantities of stock to big companies who have big bucks to drop, it'll be a while before the brokers move onto primary markets and sell to average Joes. My guess is, FB will do what Google did in Q203 and play around $80 until the brokers go primary. The point is, in one night these "big-time buyers" will turn 30% on their investment? Is that fair? Obviously not, just because they can pounce on this bubble first they're able to see a 30% profit on their investment in one night. And yes, this is a bubble because just like Zynga poped on $9 last month you can profit on short-selling FB at it's IPO peak.
Moral of the story is, the rich get richer - based on today's phantom pseudo-economy - and the poor try to survive in this brave new world.
I also read an article this morning that says average Canadians will be the last people who will be offered stock and it might take as much as four weeks after the IPO for average Canadians to get their hands on FB stock.
RE: Facebook IPO - Overpriced or not at $100B? - smexy - 02-29-2012 12:09 AM
Anybody else have something to add?