Facebook IPO

Alchemist

Administrator
Staff member
#2
I am not sure, but I think the US IPO market is virtually closed to small retail investors.

The second crack in the I.P.O. process is in the sales process. The current system does not benefit retail shareholders. Instead, investment banks sell I.P.O. shares to bigger institutional investors and rich individuals who have a relationship with the investment bank.
Cracks Appear in I.P.O. Process - NYTimes.com

Underwriters typically allot IPO shares to their best clients, including hedge funds, large institutional investors, and some wealthy individuals. Therefore, shares are difficult -- though not impossible -- for the average individual investor to obtain. The best advice for an individual seeking to invest in IPOs is to develop a relationship with a broker who can obtain IPO allocations for his or her clients.
What Were They Thinking? - An Ipo Primer | Dot Con | FRONTLINE | PBS

Anyway, I will ask my US-based uncle about it. He is an active investor in the US.

Facebook is coming out with an IPO at a time when its user base may be close to peaking. Most of internet users in developed countries already have (or had in the past) accounts with Facebook. Whatever new users Facebook is adding now are mostly from developing countries.

As a webmaster, I can say that these new users have little value compared to users from developed countries.

Currently, Facebook's revenue model is not as robust as that of Google. Google's ability to accurately match ads with search queries and interests of its users is unique and far superior compared to its rivals.

For long-term growth, Facebook will have to find new ways to leverage its large user base e.g. directly selling products on Facebook may be a great idea.
 

Alchemist

Administrator
Staff member
#3
Facebook's IPO offer document reveals a lot about the company.

Some interesting facts about Facebook:

Facebook had revenues of $3.7 billion in 2011.

Facebook made a profit of $0.668 billion in 2011.

Facebook had cash balance of $3.9 billion at the end of 2011 (compared to nearly $45 billion that Google has).

Facebook ended 2011 with 845 million users (compared to 608 million at the end of 2010).

483 million users log in every day.

Facebook generates about $4.39 in revenue per user (compared to $30 per user that Google generates).

Source: Facebook surrenders its privacy in IPO documents - Yahoo! Finance
 

man4urheart

Well-known member
#5
That was my understanding, as I searched google didn't find any process similar to our process in India.

Facebook is actually a newspaper where you get news about your friends, relatives etc. (also known as Chugli Newspaper). This is popular these days.

Point was to buy in IPO and sell on listing.
 

magnet

Active member
#7
Facebook just looks a hype to me.

If it won't have been zuckerberg age I guess still people would have prefer Orkut for being more simple.

Facebook on contrary compromises with users privacy indirectly a lot when one gives freedom to application to use your personal data.

Now I come to know what my friends read on washington post social reader. And believe me it sometimes is lot embarrassing.

In short in next few years I don't see it being the only thing to make profit.

There email model failed big time.I don't receive mails on my facebook id.

And see google from where to where they went.

And now they are the mobile android leaders.

Also all said getting youtube is the worst for them and still they minted money on all those copyright infringement stuff with ads place all over.

Facebook is more of a bubble. And sooner or later a big case will be up of compromising personal data. It's just wait and watch I feel.
 

Atiker

Active member
#8
Facebook just looks a hype to me.

If it won't have been zuckerberg age I guess still people would have prefer Orkut for being more simple.
Sorry I beg to differ.

I got an orkut and a gmail id, I guess within a couple of months of them getting launched.

Back then, I guess 8-9 years back, most of my college friends and colleagues were in Orkut. I used to visit it daily. My cousins in US asked me to get on facebook to keep in touch, I told him that orkut is more famous in India and all my network is in orkut so no point moving to facebook as I won't find anyone there.

Today none of my friends or colleagues are active in orkut but facebook.

Facebook rules, whatever its flaws or privacy issues.

There should be something in facebook to lure a whole "network/group" of people to it.

Let me give you an example.

How did gmail captured the email market? It gave something which no one was giving and everyone wanted it badly. SPACE. Remember the stupid Hotmail size limit of 2MB and 5 MB of yahoo. Users have to delete their emails, I can't even send my project document in word doc due to space constraints. Gmail promised a GB of space which for most people is unlimited space. Gmail was not open to all, you have to request existing members to send you an invite. Invites for a breif time were even sold on net :) That gives you an idea how desperate netizens were to get a gmail id.

Social media is all about "group", even if you lure out few people to try your product, they will go back to their network unless majority of their group is in the new product.

If you want to lure people out of facebook, you need to give something that facebook lacks and people want badly else its not possible to get whole network people out of it.

I believe there are smart people who will make money out of social media.
 

Alchemist

Administrator
Staff member
#9
Facebook just looks a hype to me.
In a way you are right.

Sites like Facebook and Twitter have no really utility.

Nothing would really change if these sites close down tomorrow (except for those who use these sites for marketing).

On the other hand Google is indispensable. No other search engine comes close to it.
 

magnet

Active member
#10
You are also right atiker.

But I guess facebook scoring over orkut was it being strict on identity.

Earlier even now if you try to keep some funny name over identity it won't allow.

In a way it created a platform so that oldies and all can co-exist over net not far away from one another.

Plus on top of that hitting the social parameter of looking good and hot with the 'like' tag.As if you are the coolest person on earth. And also most important integrating games first.

Orkut never changed or refused to change and keep trying. Google buzz and stuff which died never helped

What I am more interested is:

What next from facebook?

I am really bored and just make a look for updates or messages else all other are just stupid forwards most of the times.

Google search business is not dented much by microsoft, yahoo. To some extent from new micro-engine bing. But google was quick to respond to the image features keep on adding automatically as one search down.

Google have rights to give ad on youtube. Also next big thing online tv will be available via youtube channels. Once basic broadband improves.E.g ipl on youtube. Ads via it.

Also the most biggest headache. Android.

Google is all about product. I hardly know how Sergey Brin looks. Apple was all about Steve Jobs and his design innovation.

For facebook. What can I say. Just one thing gals getting crazy about 20 year old guy being the richest on earth and can buy them diamond jewelry worth millions every week. And guys dying on facebook because all the gals are on it now.

To some extent I guess twitter can survive. As all die for one liners. But for facebook they really need to do something extraordinary just like google in next 3-5 years.

This is my personal view. I feel the ipo is just coming so that they can milk the cow as it's in demand. Else who will put money on dying cow. Else what was the reason for ipo.They already command a lot.

I read somewhere not sure. Google is trading at 5 times its revenues. Whereas Facebook wants 27 times. That just sums it.

Looks like a Reliance power of usa. But I feel much better than reliance power. At least they have the assets.
 
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Alchemist

Administrator
Staff member
#11
Facebook has two new rivals.

First is Google Plus. Google Plus isn't exactly new, but is getting popular now.

I have used Google Plus for a few days and I think it's better network than Facebook. Moreover, Google Plus has the backing of Google, which makes it a must-use network for web marketers and web entrepreneurs.

The second challenger is Pinterest. Even though Pinterest isn't exactly comparable to Facebook, it's full of interesting things and has the capacity to take away some traffic from Facebook.
 

Alchemist

Administrator
Staff member
#14
By the way, has anybody on this forum has actually clicked on the Ads you see on Facebook?
I click 1 Facebook ad every 6 months. :D.

Neither Facebook (nor any other ad platform) has Google's ability to match ads with content and users' interests.

On Facebook, I usually see ads of things that I am not interested in and thus I never click those ads.

Facebook is now listed and currently it's market value is over a 100 billion dollars, which is more than one-third of India's forex reserves.

That's the power of innovation.
 
#15
By the way, has anybody on this forum has actually clicked on the Ads you see on Facebook?

I use AdBlock :). I don't think anyone has made any money from me clicking ads. Sorry Sachin :).

As far as investing (as opposed to trading) is concerned, I would rather buy AdBlock if it ever listed. I actually deleted my Facebook account yesterday. Good Riddance! So, what else is new?

Don't know the actual size of the greenshoe option with Morgan Stanley as underwriters but it can't be much more than the rumored $2.3bn they have already spent trying to support the stock at 38. But it was fun watching Facebook trade between 38 and 38.03 for about 25 of the last 30 minutes. If you didn't look at the volumes being traded, you would think it's an illiquid penny stock.

Maybe it's me but aren't the standards of innovation and its utility falling with every decade? I still think Microsoft and Apple products were much more useful in the 80's than Google in the 90's which is of course more useful than Facebook. Facebook was pushed because everyone was tired of waiting for the next big thing and the VCs had not made any money for a long time. It was funny watching people justify 100 P/E on CNN. Compare it with Google and the stock should not trade a penny above $10. But what do I know? I am no fundamentalist and would even consider going long at $50 in the short term but that besides the point.

Any bets on where the stock is headed for by Xmas this year?
 
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#17
How do you do that? I tried once but the account link remains active, I get emails from Facebook for things like birthdays of friends etc.
Google "Delete Facebook Account" :). See, Google is indeed useful!

The delete account option is in one of the security settings. Your account is then deactivated for 15 days and if you do not change your mind about Facebook, your account is deleted.

Deleting the Orkut account on the other hand was much easier.
 
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