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TOPIC: Facebook IPO?

Facebook IPO? 2 years, 9 months ago #1

fabioberger
Hello everyone!

Word is out that Facebook might be doing it's IPO soon. What are your thoughts on the company's prospects?

Thanks!

Re: Facebook IPO? 2 years, 8 months ago #2

shane king
Seriously can't wait for this. Valuations and multiples will be key of course, but as a company, the product is phenomenal. People are questioning how long Facebook will be dominant, but if really want to know just how sizeable Facebook's competitive advantage is, ask the engineers over at Google. They launched a social network with the weight of the the behemoth that is Google behind it, with huge fanfare and integration with the high traffic suite of Google products, including Gmail and the Google search engine, and they are still struggling to build a userbase of people who actually care about their Google+ profile and aren't just there to take a curious peek. Facebook's competitive advantage IS the fact that everyone is there, and that's extremely hard to bring down. Short of another technological game changer in the next several years (ie. people stop using computers and mobile apps because there's a whole another category opening up), Facebook is here to stay, with huge untapped revenue streams waiting for it.

Re: Facebook IPO? 2 years, 8 months ago #3

karen_lachman
Shane King,

How Facebook will monetize its dominant position is the real question. Until now, Facebook ads haven't brought in a lot of revenues, especially when compared to the number of users they have. Also, the 30% cut they are planning to take from Facebook Credit purchases on the site is already being called the "Facebook Tax" and many big players like Zynga are trying to build Facebook-independent platforms.

Although I agree with your point about Facebooks dominant position, I'm skeptical about the price tag valuation this IPO might have.

Re: Facebook IPO? 2 years, 8 months ago #4

shane king
Hey Karen,

I do agree, it's hard to predict what exact moves will Facebook will take in terms of finding revenue streams. However, one of the reasons predicting such moves is so hard right now is that there are SO MANY different possibilities. Facebook can integrate ads in different ways. Facebook can partner with corporates to give them more highlighted Facebook fan pages. They can let artists sell music on their fan pages. They can let movies sell pre-release movie tickets. They could sell premium packages of more detailed statistics on Facebook activity. The number of options they have open to them is partially why I think they have been relatively slow in opening up some of these revenue streams, because focusing on any particular one could distract them from other revenue streams. Also, even at it stands today, Facebook is generating serious ad revenue - $4.27 billion in 2011 according to Bloomberg (www.bloomberg.com/news/2011-09-20/facebo...arketer-says-1-.html). The growth here has been extremely impressive, and with the big increases in Facebook usage on smartphones and emerging markets still coming, I think Facebook can keep these growth rates for quite a while yet.

Re: Facebook IPO? 2 years, 8 months ago #5

karen_lachman
Shane,

you make some very good points. Thanks for the reply.

Are there any estimates out there on how much a share of Facebook will go for on IPO day?

If the price is right, it might be a buy.

Thanks!

Re: Facebook IPO? 2 years, 8 months ago #6

shane_king
WSJ thinks it's going to be an IPO above $100bn - online.wsj.com/article/SB100014240529702...066773790883672.html

We'll have to wait for prospectus to know for sure, but I don't think it'll be long till we have the Facebook roadshow and IPO announcement.

Re: Facebook IPO? 2 years, 8 months ago #7

karen_lachman
Has everyone seem the new "timeline" feature on Facebook. This is an amazing new feature of Facebook that will push them ahead of the crowd of social networks. It is the constant innovation of the platform dispite its size that makes Facebook an attractive company. I realized I had been on Facebook for 4 years and can't remember well a time without it. It contains all my memorable pictures and tells my "story".

This kind of stickiness is a real advantage to any other social network. Also, the improved control features of being able to remove others tags is going to be a major boost in confidence and trust in the giant.

Facebook is doing a lot of things right and if this continues, could have a long and profitable future. I'm tempted to say is a buy.

Re: Facebook IPO? 2 years, 8 months ago #8

SJPour
Personally, was really unimpressed with the Timeline feature. It made me more concerned with just how much information I have on Facebook, from a privacy perspective, and it didn't necessarily add too much more to my Facebook experience. Still, I think even without Timeline, Facebook has a big big competitive advantage that's going to be hard to break for any other social network, not limited to but including Google+. Definitely going to be doing my due diligence on this prospectus when it becomes available, I'm pretty excited for it.

Re: Facebook IPO? 2 years, 8 months ago #9

jane.turner
SJPour, I think you'll be surprised just how powerful the Timeline feature becomes. It's already brought together a lot more content (profiles, actions etc.) to the frontpage of the profiles of a lot of people, and it's an even more engaging way to look at a person's Facebook page. May be a little scary at first, but I think it'll get people spending even more time on Facebook (if that's even possible haha).

Re: Facebook IPO? 2 years, 8 months ago #10

fabioberger
I heard that Facebook's financials had leaked out. Any idea where one could find them? Im interested in seeing what their numbers look like. Apparently their goal is to make 2-3 dollars per user per year. It doesnt seem like much but when you think about the 800 million active users they have, its a good start.

Re: Facebook IPO? 2 years, 8 months ago #11

jheffernan3
I think it's gonna be a super hot buy in the short term...but at the rate technology is changing, I think in the long run FB might not be such a good hold.

Re: Facebook IPO? 2 years, 7 months ago #12

syl001
I believe that the IPO is going to be hugely successful. We are going to see massive capital gains on the stock on its public offering.There is obviously going to be big selloffs as well as those inside investors will seek to reap the gains after holding private shares of the company. However, what remains to be seen is if Facebook can keep up with the speculation/valuation over the long term. Zuckerberg has great things planned for the company. Look forward to seeing how it pans out.

Re: Facebook IPO? 2 years, 7 months ago #13

breedlma
This is probably true. I believe that there will be irrational exuberance when Facebook finally goes public. You can probably trade the stock or buy and hold long term. I think that any short term holding would result in a loss. I can see people being overly excited about this IPO when they are clearly waiting to sell it at the highest possible price. Like I said, you may be able to trade this or wait long term... But this isn't my style of investing so I will watch what happens.

Re: Facebook IPO? 2 years, 7 months ago #14

SJPour
Another thing to remember is that at the end of the day, this is the #1 most trafficked site on the Internet. Literally EVERYBODY uses facebook. What that means is that it's going to be hard to ever know more about this company's future than the rest of the market, and more likely than not, I think the number of inexperienced investors out there buying into this company will overvalue it, pretty much for as long as it's successful. No guarantees with the short term spike after the IPO either, that'll depend almost entirely on where they price the IPO, although there has been a string of strong performing tech IPOs as underwriting banks have priced low so they can make big returns themselves. The exception to that was Zynga, but I think Facebook is a better company than Zynga and that Mark Pincus honestly got a little greedy with the IPO price, it was right at the top of every analyst's valuation range -- that's really not how you conduct a good IPO, and I think Pincus paid the price for it with the first trading day drop.

Re: Facebook IPO? 2 years, 7 months ago #15

jane.turner
So are you predicting a gain on the opening day for Facebook, Soroush?

Re: Facebook IPO? 2 years, 7 months ago #16

karen_lachman
I agree with sjpour, lets face it, its hard to estimate Facebooks value. I remember when Google IPOed for a mere $50 bucks. No one saw it jump as it did to the double digits. I think if anyone is going to buy Facebook on the opening, they should feel comfortable enough with their decision to hold the position for about a year. What do you guys think?
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