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Post by Forever Sunshine on May 17, 2012 12:28:12 GMT -5
There's been a lot of talk about Facebook's valuation, but the real question behind that valuation, is how Facebook makes money and what its prospects are in the future.
First: The value of Facebook's reach shouldn't be underestimated. Facebook had 901 million monthly active users at the end of the first quarter -- and it turns those users into dollars, primarily by showing them ads.
It had 526 million daily active users at the end of the first quarter, 41 percent more than the prior year. Users generated an average of 3.2 billion likes and comments per day in the first quarter, and there are more than 125 billion friend connections.
One key number: mobile is a huge driver of growth -- the company now has about 500 million monthly average users. That's a potential source of revenue growth, but also a challenge.
The company only recently started running ads on its mobile platform, but it doesn't put as many ads on the mobile experience as it does on its website. Since mobile usage is growing faster than its overall usage, that means Facebook's ad revenue can't really grow as fast as its usage.
money.msn.com/technology-investment/post.aspx?post=869a1b6c-0bb7-47b3-ac0a-25d10f6a5404
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Post by Forever Sunshine on May 18, 2012 6:42:03 GMT -5
Beware the Facebook IPO
A flood of Facebook shares could hit the market in three months.
Facebook (FB 0.00%) opens for trading Friday in an initial public offering that is beyond full of the normal fundamental uncertainties. That comes with the turf for hot IPOs, in my opinion.
But the structure of the offering just keeps getting worse and worse for investors. If you can get shares at the IPO price, buy them and flip them by all means. But you sure don’t want to think this is a long-term investment.
I think the fundamental problems with the Facebook offering should be known to all at this point, especially because General Motors' (GM 0.00%) decision to pull $10 million in advertising from Facebook just days before the company's IPO has focused attention on all the questions about Facebook's ability to grow its ad revenue.
Here are the important fundamental numbers. At a likely post-IPO market value of $100 billion, the market is saying that every person with a Facebook page is worth about $100. In 2011, each Facebook user generated about $4 in sales for Facebook. That’s a lot of ad revenue to generate just to get to the post-IPO valuation. Facebook's ad revenue actually fell in the first quarter of 2012 from the fourth quarter of 2011.
But what really bothers me about the IPO is that the terms of the deal were still changing this week, and they were changing in favor of pre-IPO investors who want to cash out and against anyone who buys after the IPO and holds onto the stock.
money.msn.com/top-stocks/post.aspx?post=4664cf60-ed99-4a3a-af8d-c51ac88e0c1a
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Post by Forever Sunshine on May 18, 2012 11:29:51 GMT -5
Facebook shares disappoint in early trading
Facebook (FB +6.08%) is having a rough first day.
The stock saw a quick burst in early trading, opening at 11:30 a.m. ET at $42.05, but within 20 minutes dropped back to its IPO price of $38 a share. The debut was shockingly weak, given all the excitement around the IPO.
The stock recovered slightly by 12:20 p.m. to about $40. That placed the company's value higher than those of McDonald's (MCD +1.19%), Citigroup (C -0.44%) and Amazon (AMZN -1.02%). We'll update the price all day, so check back often for the latest action.
One of Facebook's largest customers, Zynga (ZNGA -13.30%), saw shares plunge so sharply that trading was halted. Zynga shares fell by more than 13% in morning trading. Other social-media stocks were also selling off. Yelp (YELP -5.97%) was down by nearly 7% to $19.80, and LinkedIn (LNKD -1.06%) fell by nearly 3% to $102.18.
money.msn.com/technology-investment/article.aspx?post=f931548b-9920-46d4-ae36-3d1256759102
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Post by sparkle on May 19, 2012 7:56:51 GMT -5
All i can say is that i have met so many interesting and wonderful people through facebook. I have reconnected with relatives and long lost friends. I think the positives out weigh the negatives.  Just sayin... Could never get the hang of MySpace 
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Post by Forever Sunshine on May 19, 2012 8:17:02 GMT -5
Wait until they start running banner ads or charging for certain pages on there. It's gonna happen eventually! ;D
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Post by Miss Who on May 19, 2012 18:52:23 GMT -5
Wait until they start running banner ads or charging for certain pages on there. It's gonna happen eventually! ;D
I can see many facebook user pulling out of face book when that happens. We've been using it for free all this time, we wont want to start paying now. |
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Post by Forever Sunshine on May 21, 2012 11:26:35 GMT -5
Facebook sinks as much as 14%
Morgan Stanley propped up Friday's IPO, but the lead underwriter couldn't fake the stock price forever.
The talk on Wall Street all weekend was the Facebook (FB -11.72%) IPO -- but not for the many reasons people would think. Yes, the company pulled off a $16 billion offering to mark the largest tech IPO in history. And yes, the boy wonder Mark Zuckerberg got married Saturday.
No, the big buzz was about how badly Facebook shares would tumble Monday morning after what some people called a propped-up IPO. And tumble they have, down as much as 14% in early trading.
Surprised at the declines? You shouldn't be. Here's the dirty secret about the Facebook IPO and why many Wall Street insiders expected Monday's double-digit drop:
First, a brief overview of initial public offerings: Basically, when a stock goes public, it does not throw shares willy-nilly to the masses. Rather, it uses an underwriter as a middleman, parceling out shares to lucky investors and orchestrating the process for a fee.
money.msn.com/top-stocks/post.aspx?post=4b1a27fe-7f75-4512-ae71-ee785200d680
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Post by Forever Sunshine on May 22, 2012 15:22:16 GMT -5
Facebook drops again as SEC calls for review
Facebook's shares fell again on Tuesday as questions mounted over the company's long-term prospects and the top U.S. securities regulator called for a review of the problems surrounding its initial public offering last week.
The comments urging a review, by Securities and Exchange Commission Chairman Mary Schapiro, added pressure on the company, its underwriters and the Nasdaq, all of which have taken blame for the stock's troubled opening and subsequent sharp decline.
After Friday's nearly flat close and Monday's 11 percent plunge, the stock dropped as much as 9 percent in early trading on Tuesday before reversing some of the decline.
Facebook shares were down 5.5 percent at $32.16 in mid-afternoon trading. At that price the company has shed more than $14 billion in market capitalization from its $38-per-share offering price last week.
Volume was again heavy, with 73 million shares changing hands. That followed turnover of 168 million shares Monday and 581 million on IPO day.
money.msn.com/technology-investment/news.aspx?feed=OBR&date=20120522&id=15139630
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Post by Forever Sunshine on May 22, 2012 23:47:34 GMT -5
Did Morgan Stanley botch the Facebook IPO?
Was the Facebook (FB -8.90%) initial public offering bungled by the banks? Between the chaos that surrounded the first day of trading its shares on Nasdaq last Friday, followed by Monday's nosedive in the value of those shares beneath the $38 IPO price -- there's plenty of egg on everyone's face.
Blaming Nasdaq OMX Group (NDAQ -2.02%) for the exchange's technological snafus is legitimate (sure, those pesky high-frequency traders really mess things up, but Nasdaq should have been prepared for that; it's hardly classified information). But blaming the banks that underwrote the deal, while it might make investors feel good, really isn't legitimate.
Of course, the banks pushed the envelope and tried to whip up demand for the stock among potential investors -- that's what Facebook and its owners hired them to do. Of course they did their duty to their client by raising the price range when it appeared they could place even more shares with new investors at an even higher value, thus maximizing the proceeds of the deal.
money.msn.com/top-stocks/post.aspx?post=c52963ab-e8b9-42a7-8a32-818b56212b98
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Post by Forever Sunshine on May 24, 2012 22:54:22 GMT -5
So who's buying Facebook now?
Facebook (FB +3.22%) shares are surprisingly stable lately after last week's initial public offering. The stock had a couple of disastrous days, but since Tuesday has hovered around $32. Shares closed Thursday afternoon at $33.03.
Investors are clearly losing interest. Trading volume dropped to less than 49 million Thursday, down from 102 million on Tuesday and 168 million on Monday (volume topped a staggering 579 million on Friday).
But the stabilizing price tells us that someone's buying the stock lately. They may not want to admit it, but they're buying.
money.msn.com/investing/latest.aspx?post=31b90176-c07c-4fc6-bb00-c4692fa9ccd6
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Post by Forever Sunshine on May 29, 2012 21:17:06 GMT -5
Facebook shares plunge on options action
The stock opened for options trading Tuesday, and the bearish response helped shares fall below $29 for the first time.
Facebook (FB -9.62%) shares plunged nearly 10% Tuesday on the absence of any real news and fell below $29 a share for the first time. Why did the stock get whacked?
The answer is in the options market, where Facebook made its debut Tuesday. Options traders make all kinds of bets on the future of a stock, and if they make the right combination of guesses, they get paid very handsomely. If they bet wrong -- which does happen the majority of the time -- they lose some money, but it's often less risky than buying the stock outright.
Options trading can get pretty complicated under different strategies. People are trading the right to buy and sell shares of stock at different price levels, and use a number of scenarios depending on the circumstances.
So what did options traders think about Facebook, which has fallen 24% from its IPO price to close Tuesday at $28.84? Here are a few messages the options market sent out Tuesday:
1. This is a short-term play. You could buy options that don't expire until January 2014 -- but few traders wanted to stick around for that long. Some did make bets that Facebook would hit $65 a share by January 2014, however.
But most traders were in for a short-term hit. The largest option trades bet that the stock would slide to $25 by mid-July, The Wall Street Journal reported.
2. Traders were bearish. Most traders were selling call options to finance put options in Facebook, Reuters reported. Selling call options grants another investor the right to buy your Facebook shares at a strike price. Buying put options gives you the right to sell your Facebook shares at a strike price.
money.msn.com/stock-broker-guided/article.aspx?post=037767c5-63d0-413d-bee9-6b99ef7af3cb
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