Facebook expected to file for IPO Wed

[Russ Smith]

http://finance.yahoo.com/news/facebook-file-wednesday-5-billion-221819665.html Supposed to be the largest IPO since Google.

Interesting I know it's hard for a small investor to buy in but I may actually try a few days later see if I can. Always kicked myself for not doing that with Google. Tried to do it with VMWare but couldn't get shares.

 

[Gaddabout]

I'm not so confident in Facebook's ability to exist as a razor-sharp public offering. I think they're very stable and obviously generate a lot of income, but I also think it's going to be hard for them to increase earnings y/y at the expectations Wall Street has.

I'm much more fascinated by Zynga and other 3rd party Facebook companies. Zynga used Facebook to become a namebrand, then spread outward like a virus to the point they're everywhere now. And Zynga is a phenomenal low-overhead, high-return kind of company. They're still basically just printing money.

I'm also fairly certain Google's recent move to consolidate services will end up making them the most powerful marketing outfit in the world. Not even Facebook will have their reach. If you think their stock is rich blood now, I think they're going to go through the roof over the next 5 years until the Feds finally wise up and start knocking that monopoly off their perch. They have a reach Microsoft only once dreamed of, and they've done it with almost no regulating hindrance.

 

[jf-08]

I am up on my Zynga, QIHOO360 and Linkedin IPOs, down on Pandora.

I couldn't get Google.

 

[Russ Smith]

It'll be interesting to watch FB has an issue in that people really don't get yet how they make money so when they start doing quarterly earnings reports it will be really interesting to see where the money actually is coming from.

 

[jf-08]

No doubt. The revenue basically comes from them exploiting people's privacy for the advertising dollar.

Supposedly, the IPO will be out in May.

 

[82CardsGrad]

Being reported that all existing FB employees will become instant millionaires with the IPO... There is also discussion that FB is considering the potential of offering the IPO to all current subscribers. Interesting idea...

 

[Russ Smith]

Being reported that all existing FB employees will become instant millionaires with the IPO... There is also discussion that FB is considering the potential of offering the IPO to all current subscribers. Interesting idea...

My paper says they think about 1/3 of the employees will be millionaires on paper, of course they can't sell until the lockup expires but that's about 1000 employees they think. That's instant of course over time it could be much higher.

They're talking about the Facebook effect in the local markets, people scrambling to buy houses in areas they expect will see steep price hikes after FB goes IPO and their employees start buying(Palo Alto, Atherton etc). Local businesses expecting an influx of money when they start buying the homes, contractors etc.

One article I looked at said it's possible FB could trigger a mini "internet bubble" although i think that's unlikely.

Our broker here at work told us that Apple and Google are siginificantly impacting the commercial markets in Sunnyvale. Apple is building a new campus in Cupertino but they need more space until it's ready and they've started snapping up property in Sunnyvale since Cupertino is full. That means they're competing with Google now for property. he says Facebook won't impact the commercial market because they just moved into a new space not all that long ago but it's possible that Google and Apple also might be looking to get property now before FB grows and needs it later.

 

[Gaddabout]

Some analysts took a look at Facebook's filing numbers and arrived that Facebook makes $4.39 a year from each user. It means they would have to get membership up to 3 billion and maintain that current rate of return to equal $13 billion in revenue a year, which is what Apple turned in PROFIT in ONE QUARTER.

No way would I go anywhere near this offering.

 

[Russ Smith]

Some analysts took a look at Facebook's filing numbers and arrived that Facebook makes $4.39 a year from each user. It means they would have to get membership up to 3 billion and maintain that current rate of return to equal $13 billion in revenue a year, which is what Apple turned in PROFIT in ONE QUARTER.

No way would I go anywhere near this offering.

I read today http://www.mercurynews.com/ci_19873186

Facebook in its IPO filing revealed that it now has 845 million users, nearly half the world's Internet users. And it reported $1 billion in profit on $3.7 billion in revenue last year, making a company once derided for having no business plan one of the valley's top profit machines.

Industry sources expect the stock offering will set Facebook's overall value at $75 billion to $100 billion. The papers filed Wednesday do not specify how many shares will be sold, their offering price, or the date they will be offered; the company is expected to release more details in coming weeks.

So that's where that 4.37 comes from divide 3.7 billion by 845 million. THat means the profit is about 1.18 per user annually.

Of course stock price doesn't correlate to numbers exactly but it is interesting to see what they're projecting.

The interesting comment in that article is that advertising on mobile devices is much less lucrative, I would assume so I look at FB on my phone and I post pics from it but I never actually write anything on it from my phone because it's so hard on a phone. Supposedly there are several things in the pipeline for FB that will increase their revenue.

 

[azsportsfan01]

Some analysts took a look at Facebook's filing numbers and arrived that Facebook makes $4.39 a year from each user. It means they would have to get membership up to 3 billion and maintain that current rate of return to equal $13 billion in revenue a year, which is what Apple turned in PROFIT in ONE QUARTER.

No way would I go anywhere near this offering.

Take it with a grain of salt but this guy says they are looking to get $120 per user from advertisers.
http://finance.yahoo.com/blogs/breakout/3-ways-facebook-ipo-exploit-users-172215377.html

 

[Russ Smith]

Take it with a grain of salt but this guy says they are looking to get $120 per user from advertisers.
http://finance.yahoo.com/blogs/breakout/3-ways-facebook-ipo-exploit-users-172215377.html

I just hope they beef up the system I'm really tired of clicking on someone's name to see their page and the thing freezes up and I never see their profile.

Happens constantly to me with friends profiles, Ie or Firefox.

 

[cardinalsflow]

I work in finance and I get asked about the FB IPO more than anything else. No questions about Eurozone, no questions about irrational exuberance... just "How can I buy FB!!"