5 ms·

Facebook Targeting IPO for Between April and June

32 points by law 15y ago

npollock 15y ago
They're probably hoping that everyone will have forgotten about the Groupon IPO by then. Groupon is trading around the $15 mark, or exactly half of it's opening day high, $31.14. It's well below the IPO price of $20, and it's looking like the biggest tech embarrassment of the year.
- law 15y ago
  Also, they're probably hoping that people will have forgotten about the EU's disdain for Facebook's entire profit model[1], which could wreak havoc on their viability in the market. Facebook really needs to step up its game by developing some technology or business method equally as disruptive as they were to the social networking industry in 2004. I would imagine this could take the form of quasi-gamification, where the information people disclose and allow Facebook to use is treated as de facto currency for how they can interact with the site. In that regard, users would receive the service in exchange for something of value to Facebook--information. Their current Statement of Rights and Responsibilities requires users to grant Facebook a "non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook."[2] To me, this is unconscionable, since the service you receive remains constant, while what you 'pay' (the consideration) varies with your level of usage. While one could reasonably argue that the quality of service you receive increases with respect to your level of interaction (i.e., you can't chat with friends until you connect with friends), there's a certain level of unforeseeability inherent in Facebook's intended use at the time you disclose that information (such as making a friend request, wall post, liking a page, etc.) There are some even more troubling issues, as well. Interacting with third-party services via the application platform (by installing apps) gives those services access to your information. Once they have it, you're bound by their terms of use and privacy policies. I'd love to see the exhaustion rule/first-sale doctrine[3] discussed vis-a-vis data privacy, since I'm unsure whether it would apply to "data." We saw this discussed tangentially by the web sites attempting to create marketplaces to sell used MP3s[4]--the first-sale doctrine allows you to resell used books, used CDs, etc., but can it allow service providers to sell its copy of "used" data? What about the putative buyers of "used" data--are they bound by Facebook's Special Provisions Applicable to Developers/Operators of Applications and Websites? All of these are questions with answers that could have an extremely disruptive impact on Facebook's entire profit model. [1] http://www.telegraph.co.uk/technology/facebook/8917836/Facebook-faces-a-crackdown-on-selling-users-secrets-to-advertisers.html http://www.telegraph.co.uk/technology/facebook/8917836/Faceb... [2] https://www.facebook.com/terms.php https://www.facebook.com/terms.php [3] http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine [4] http://www.techdirt.com/articles/20110218/12432213167/yet-another-company-says-it-can-help-you-sell-used-mp3s.shtml http://www.techdirt.com/articles/20110218/12432213167/yet-an...
- Tossrock 15y ago
  Did anyone not see that coming? I mean seriously, the whole creative accounting thing should have scared anyone with a brain off the IPO. If their unsustainable business model hadn't already.
- jphackworth 15y ago
  I wish my startup was so embarassed as to have merely a market cap of $9.7 billion.
- Alex3917 15y ago
  "They're probably hoping that everyone will have forgotten about the Groupon IPO by then." If the lockup period ends mid December and the stock tanks then this is only 3 months for the markets to forget. Doesn't seem long enough to me, though it may not make sense to wait anymore either.
- hbar 15y ago
  GRPN is an embarrassment depending on whom you ask. The founders know exactly what they're doing -- they cashed out long ago.
- qq66 15y ago
  Facebook and Groupon have basically nothing in common.
RShackleford 15y ago
i am not going to pay a cent for such a ridiculous firm.
Tossrock 15y ago
Valuing 25:1 against yearly revenue seems a bit high. I mean, I'm sure it'll still ride a rocket the moment it goes public, but I think it'll peter out sooner than most long term investors would like.
- rdl 15y ago
  I'm not even that sold on social media in general, but I'm comfortable with Facebook as a company due to three main factors: 1) Great leadership (Mark obviously, but a lot of the other people around him, all the way down to Manager level, are great; the drop 1-2 levels to join FB thing seems to have paid off) 2) Attract great team (it seems to be the strongest recruiting organization for a company its size, and overall I'd say FB engineering hires are among the best) 3) Successful track record of innovating and turning even fairly mundane problems into technology showcases Even if this whole "social media" thing peters out in a few years, I think Facebook will continue to innovate and remain a dominant player in whatever comes next.
deleted 15y ago
[deleted]
andrewhillman 15y ago
I hope they do the IPO in a creative way like google did w/ dutch auction. I have a feeling they will. I am sure they have put a lot of thought into how they want to handle it.
blantonl 15y ago
When you go public you are opening up the kimono to the public. It appears that Facebook feels they are ready for that public financial scrutiny. It will be fascinating to see how Facebook generates revenue, spends money, and maintains net income. I'm really looking forward to this IPO, solely for those reasons.
- kooshball 15y ago
  AFAIK, they already went over the 500 shareholders limit so they have to open the books whether they IPO or not.
goodweeds 15y ago
As a long-time resident of San Francisco I'm hoping we have some sort of 2008-esque financial holocaust this summer to offset the damage facebook's ipo will do to the housing market.
sek 15y ago
They know they are overvalued and the stock will go down from there. Why? Because the IPO ist gigantic, could be one of the biggest in history. Google did start with just 1,9B. They were thinking the opposite. In order not to be ripped of, they tried to evaluate a base to raise money when needed. The sad thing is, it will work. Facebook is overhyped in the media and the little guy believes it will be a Google story. It is still a very risky business and they can lose a lot of money.
- sek 15y ago
  When i think about the volume, maybe it won't be that bad. A demand based increase will be unlikely and there could be a lot of institutional portfolio investments. I rather see this money at Facebook to be independent, what also means less uncertainty for the users and their data.

32 points by law 15y ago

They're probably hoping that everyone will have forgotten about the Groupon IPO by then. Groupon is trading around the $15 mark, or exactly half of it's opening day high, $31.14. It's well below the IPO price of $20, and it's looking like the biggest tech embarrassment of the year.

law 15y ago
Also, they're probably hoping that people will have forgotten about the EU's disdain for Facebook's entire profit model[1], which could wreak havoc on their viability in the market. Facebook really needs to step up its game by developing some technology or business method equally as disruptive as they were to the social networking industry in 2004. I would imagine this could take the form of quasi-gamification, where the information people disclose and allow Facebook to use is treated as de facto currency for how they can interact with the site. In that regard, users would receive the service in exchange for something of value to Facebook--information. Their current Statement of Rights and Responsibilities requires users to grant Facebook a "non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook."[2] To me, this is unconscionable, since the service you receive remains constant, while what you 'pay' (the consideration) varies with your level of usage. While one could reasonably argue that the quality of service you receive increases with respect to your level of interaction (i.e., you can't chat with friends until you connect with friends), there's a certain level of unforeseeability inherent in Facebook's intended use at the time you disclose that information (such as making a friend request, wall post, liking a page, etc.) There are some even more troubling issues, as well. Interacting with third-party services via the application platform (by installing apps) gives those services access to your information. Once they have it, you're bound by their terms of use and privacy policies. I'd love to see the exhaustion rule/first-sale doctrine[3] discussed vis-a-vis data privacy, since I'm unsure whether it would apply to "data." We saw this discussed tangentially by the web sites attempting to create marketplaces to sell used MP3s[4]--the first-sale doctrine allows you to resell used books, used CDs, etc., but can it allow service providers to sell its copy of "used" data? What about the putative buyers of "used" data--are they bound by Facebook's Special Provisions Applicable to Developers/Operators of Applications and Websites? All of these are questions with answers that could have an extremely disruptive impact on Facebook's entire profit model. [1] http://www.telegraph.co.uk/technology/facebook/8917836/Facebook-faces-a-crackdown-on-selling-users-secrets-to-advertisers.html http://www.telegraph.co.uk/technology/facebook/8917836/Faceb... [2] https://www.facebook.com/terms.php https://www.facebook.com/terms.php [3] http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine [4] http://www.techdirt.com/articles/20110218/12432213167/yet-another-company-says-it-can-help-you-sell-used-mp3s.shtml http://www.techdirt.com/articles/20110218/12432213167/yet-an...
Tossrock 15y ago
Did anyone not see that coming? I mean seriously, the whole creative accounting thing should have scared anyone with a brain off the IPO. If their unsustainable business model hadn't already.
jphackworth 15y ago
I wish my startup was so embarassed as to have merely a market cap of $9.7 billion.
Alex3917 15y ago
"They're probably hoping that everyone will have forgotten about the Groupon IPO by then." If the lockup period ends mid December and the stock tanks then this is only 3 months for the markets to forget. Doesn't seem long enough to me, though it may not make sense to wait anymore either.
hbar 15y ago
GRPN is an embarrassment depending on whom you ask. The founders know exactly what they're doing -- they cashed out long ago.
qq66 15y ago
Facebook and Groupon have basically nothing in common.

RShackleford 15y ago

i am not going to pay a cent for such a ridiculous firm.

Tossrock 15y ago

Valuing 25:1 against yearly revenue seems a bit high. I mean, I'm sure it'll still ride a rocket the moment it goes public, but I think it'll peter out sooner than most long term investors would like.

rdl 15y ago
I'm not even that sold on social media in general, but I'm comfortable with Facebook as a company due to three main factors: 1) Great leadership (Mark obviously, but a lot of the other people around him, all the way down to Manager level, are great; the drop 1-2 levels to join FB thing seems to have paid off) 2) Attract great team (it seems to be the strongest recruiting organization for a company its size, and overall I'd say FB engineering hires are among the best) 3) Successful track record of innovating and turning even fairly mundane problems into technology showcases Even if this whole "social media" thing peters out in a few years, I think Facebook will continue to innovate and remain a dominant player in whatever comes next.

deleted 15y ago

[deleted]

andrewhillman 15y ago

I hope they do the IPO in a creative way like google did w/ dutch auction. I have a feeling they will. I am sure they have put a lot of thought into how they want to handle it.

blantonl 15y ago

When you go public you are opening up the kimono to the public. It appears that Facebook feels they are ready for that public financial scrutiny. It will be fascinating to see how Facebook generates revenue, spends money, and maintains net income. I'm really looking forward to this IPO, solely for those reasons.

kooshball 15y ago
AFAIK, they already went over the 500 shareholders limit so they have to open the books whether they IPO or not.

goodweeds 15y ago

As a long-time resident of San Francisco I'm hoping we have some sort of 2008-esque financial holocaust this summer to offset the damage facebook's ipo will do to the housing market.

sek 15y ago

They know they are overvalued and the stock will go down from there. Why? Because the IPO ist gigantic, could be one of the biggest in history. Google did start with just 1,9B. They were thinking the opposite. In order not to be ripped of, they tried to evaluate a base to raise money when needed. The sad thing is, it will work. Facebook is overhyped in the media and the little guy believes it will be a Google story. It is still a very risky business and they can lose a lot of money.

sek 15y ago
When i think about the volume, maybe it won't be that bad. A demand based increase will be unlikely and there could be a lot of institutional portfolio investments. I rather see this money at Facebook to be independent, what also means less uncertainty for the users and their data.