Facebook IPO

spideycw · Post by **spideycw** » Fri May 11, 2012 2:52 am

MrChaos wrote:QUOTE (MrChaos @ May 10 2012, 03:20 AM)

To the best of my knowledge something like the Ford family's Clas A stock is no longer legal. Can you provide me a linkee?

It is legal and has been going on for a while.

Google is even going to issue a new class of shares (Class C) so their founders can prevent losing control. This is actually pretty interesting and you should look up their letter to investors on how they spun this as a good thing (the creation of a new class of shares with non voting rights)

I believe it is call a dual class offering or something similar.

QUOTE Dual Class Stock. As described above in “—Common Stock—Voting Rights,” our restated certificate of incorporation provides for a dual class common stock structure, which provides Mark Zuckerberg, our founder, Chairman, and CEO, with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.[/quote]

spideycw · Post by **spideycw** » Fri May 11, 2012 2:59 am

Qupenig wrote:QUOTE (Qupenig @ May 9 2012, 11:48 PM) I'm am buying 20k worth if $30 or under.

But how long will you hold for? It is worth noting the shares have been going for $40 on the secondary market and the IPO valuation is at less than that. More than a few people who snatched them up there will lose money if it never climbs that lofty plateu. Worth noting that LinkedIn's IPO saw an 80%+ jump. I am seriously considering snagging some but holding for a 48 hours only (once I figure out the tax liabilities anyway)

TakingArms wrote:QUOTE (TakingArms @ May 10 2012, 02:54 PM) I think I would want more clarity on their income stream and how it is derived. Frankly I have only vague notions as to how they actually make money. I think they make money by advertising and selling our info to people, and also by charging commercial vendors to have facebook pages. But I have no idea how much money comes from each of those and what the costs are and what the profitability is like.

Also i would fear that facebook gets myspaced. It's a very narrow money-making model if my vague understandings are correct. Basically if people decided to leave facebook en mass (say, for the google competitor) the same way they did from myspace to facebook, the whole thing could become worthless overnight.

Their S-1 did give some insight to this and it is worth noting as you said their customers are not you and I or any of the other 900 million people who use it but rather the companies who want our personal data for one reason or another. I believe they were going to release an amended S-1 today but I have not had a chance to take a look and that may have shed some more information on the subject.

I am thinking it is a good extremely short term hold but I am very against a long term one because I honestly think one good Privacy scandal will cause their stock to drop and never recover. I have heard some chatter from people talking about them as a 3-5 year hold due to expansion worldwide and advertisers claiming they are going to INCREASE their spending on Facebook (but who knows if that will actually ahppen)

Also their P/E based on the current valuation is like 120ish to 1!

Frankly I want to get in before people like Q and get out when his ilk flock to it and drive the price up

spideycw · Post by **spideycw** » Fri May 11, 2012 3:01 am

Vortrog wrote:QUOTE (Vortrog @ May 9 2012, 10:31 PM) There will be much corporate blood once it is all done and dusted. Great opportunity for vampires. In fact, those who already have their fangs in there are just waiting for the opportune time to start sucking.

I feel sorry for the hoards of small investors who will be recommended by their Financial Advisers to invest, because their financial advisors will be given an incentive fee, in the same way apartment sales get inflated sales by builders agreeing to large FA fees to invest in an inferior product.

My FA get's a flat fee. Is that not standard? Incentive fees seem like they would bias them greatly...

spideycw · Post by **spideycw** » Fri May 11, 2012 3:07 am

vogue wrote:QUOTE (vogue @ May 9 2012, 11:41 PM) also I haven't really looked into this since i've been busy with finals, but how does facebook even make money?? those dinky ad's on the side? can't be their only source of revenue

Not their only source but certainly a key one. When you finish definately glance at their IPO filing. It's full of gold. For example:

QUOTE We currently generate significant revenue as a result of our relationship with Zynga, and, if we are unable to successfully maintain this relationship, our financial results could be harmed.

In 2011, Zynga accounted for approximately 12% of our revenue, which amount was comprised of revenue derived from payments processing fees related to Zynga’s sales of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga’s apps generate a significant number of pages on which we display ads from other advertisers. If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected.[/quote]

Adept · Post by **Adept** » Fri May 11, 2012 6:40 am

Buy and hold for 48h to cash in on the hype. I see what you mean spidey. That may well work on the fools and their money principle. Good luck.

Malicious Wraith · Post by **Malicious Wraith** » Fri May 11, 2012 8:34 am

Are you even going to be able to buy this at opening price? I was under the impression you would need to be a major investor buying into the IPO to get it their release price.

MrChaos · Post by **MrChaos** » Fri May 11, 2012 8:42 am

Malicious Wraith wrote:QUOTE (Malicious Wraith @ May 10 2012, 12:57 PM) http://articles.economictimes.indiatimes.c...urdoch-founders

Ahhh it wasn't against the law the stock exchange wasn't listing new companies doing it for awhile. Thanks MW

MrChaos · Post by **MrChaos** » Fri May 11, 2012 8:51 am

spideycw wrote:QUOTE (spideycw @ May 10 2012, 10:52 PM) It is legal and has been going on for a while.

Google is even going to issue a new class of shares (Class C) so their founders can prevent losing control. This is actually pretty interesting and you should look up their letter to investors on how they spun this as a good thing (the creation of a new class of shares with non voting rights)

I believe it is call a dual class offering or something similar.

Thanks too Spidey. I think what happened was I read about the NYSE not listing those kinds of firms or some such... no matter it was a misconception on my part held for years. Huzzah

( Btw I'd get in, hold, and get out while the getting was good. For every MS there are 1000 PeaPods and there ilk.

)

spideycw · Post by **spideycw** » Fri May 11, 2012 12:00 pm

Malicious Wraith wrote:QUOTE (Malicious Wraith @ May 11 2012, 04:34 AM) Are you even going to be able to buy this at opening price? I was under the impression you would need to be a major investor buying into the IPO to get it their release price.

Yes

Malicious Wraith · Post by **Malicious Wraith** » Fri May 11, 2012 9:22 pm

spideycw wrote:QUOTE (spideycw @ May 11 2012, 08:00 AM) Yes

Huehue.