4 ms·

I plan to buy it if it falls to 4 dollars or less.

by 16s 14y ago

brandoncapecci 14y ago
I originally said the same at at $10, which it's on track to hit. Sentiment is making me reconsider...
- 16s 14y ago
  It may bounce back or firm-up. Hard to say. They have a lot of great minds.
  - veyron 14y ago
    great minds != great stock Bell Labs had great minds, but that didn't mean that the legal entity managed their innovations well ...
    - brandoncapecci 14y ago
      Very true. Some large tech companies now still have pretty horrendous stocks. Microsoft has been flat for like a decade and it's still an industry leader which is counterintuative to people who don't know that much about the market. I'm sure he meant that they could, in theory, utilize their brilliance towards kickstarting something business oriented to reverse the sentiment. For whatever reason though, Mark seems more interested in Frank Gehry's NASA hanger than actually making money. It's a big fucking revelation to him that people in finance actually care about financials. Who knew? The whole situation really makes me think how much the current funding model as just a glorified legal ponzi scheme: More users, more funding, more users, more funding, IPO & profit. I'd say most of the better business minds were the investors and the prudent ones have already sold. I'm convinced Eduardo Saverin is really the genius of the entire group. He sold shares right before the IPO, renounced his US citizenship, and moved to Singapore. He may have been screwed over by Facebook before but he gets the last laugh now that he sold his shares for double what their worth and got to avoid some taxes while doing it :) In contrast, Mark choose to be more of a Sean Parker - a great creator of free products and, thus far, a fairly lousy businessperson. Companies like Spotify are amazing for users yet that doesn't stop them from losing millions each month in licensing. These companies dig themselves into holes from the very beginning and simply pray the financial problem fixes itself. My opinion and seemingly that of investors is that there is no indication that it will until the model itself is changed. Recent IPOs all tell the same story: that businesses not built with long term viable business models have trouble performing well on the market. Until "free" can work like Google enables it to in more companies, nobody is willing to bet on the hole not getting deeper without the likelihood of a larger round to keep these failing companies afloat.
WiseWeasel 14y ago
I bet it won't fall that low. $4 would be valuing the company at about 10x their 2011 income of $1B, which is extremely low for a company expected to grow. I wouldn't expect to see a valuation under 20x, or about $7-8 per share. My guess is ~$10 per share is the floor on this one. http://www.forbes.com/sites/tomiogeron/2012/02/01/facebooks-5-billion-ipo-filing-3-7-billion-in-2011-revenue/ http://www.forbes.com/sites/tomiogeron/2012/02/01/facebooks-...
- cube13 14y ago
  Is Facebook really expected to grow that much? Even counting the 13% or so fake accounts, they have around 800 million active accounts. That's a bit over 10% of the world's population. They can't really get the growth that's expected with their P/E, especially because of the difficulties that they're having with getting higher returns/user. They can't grow their userbase by that much either.
  - rrreese 14y ago
    FB can grow either by increasing it user base as you suggest, or by monetizing it's users better. So if it say increases usage by 5x and monetization by 5x you are looking at a 25x multiplier. Will this happen, I have no idea.
    - mikeryan 14y ago
      Unfortunately for Facebook, this is fighting a few trends. users numbers have gone down in the US and Britain [1] and mobile usage is going up [2], and Facebook is having a much harder time monetizing mobile over the web. I agree with your general premise however, that Facebook's primary growth won't be on the user base, but needs to be on the revenue per subscriber numbers. This is going to really test one of the Valley's most recent premises, that building a massive user base will also create a massive business (Twitter, Instagram I'm looking at you...) [1] http://www.telegraph.co.uk/technology/facebook/8573340/Facebook-usage-drops-in-Britain-and-US.html http://www.telegraph.co.uk/technology/facebook/8573340/Faceb... [2] http://www.forbes.com/sites/ericsavitz/2012/05/09/facebook-tweak-s-1-adds-language-on-risks-in-growth-in-mobile-useage/ http://www.forbes.com/sites/ericsavitz/2012/05/09/facebook-t...

I plan to buy it if it falls to 4 dollars or less.

by 16s 14y ago

I plan to buy it if it falls to 4 dollars or less.

brandoncapecci 14y ago

I originally said the same at at $10, which it's on track to hit. Sentiment is making me reconsider...

16s 14y ago
It may bounce back or firm-up. Hard to say. They have a lot of great minds.
- veyron 14y ago
  great minds != great stock Bell Labs had great minds, but that didn't mean that the legal entity managed their innovations well ...
  - brandoncapecci 14y ago
    Very true. Some large tech companies now still have pretty horrendous stocks. Microsoft has been flat for like a decade and it's still an industry leader which is counterintuative to people who don't know that much about the market. I'm sure he meant that they could, in theory, utilize their brilliance towards kickstarting something business oriented to reverse the sentiment. For whatever reason though, Mark seems more interested in Frank Gehry's NASA hanger than actually making money. It's a big fucking revelation to him that people in finance actually care about financials. Who knew? The whole situation really makes me think how much the current funding model as just a glorified legal ponzi scheme: More users, more funding, more users, more funding, IPO & profit. I'd say most of the better business minds were the investors and the prudent ones have already sold. I'm convinced Eduardo Saverin is really the genius of the entire group. He sold shares right before the IPO, renounced his US citizenship, and moved to Singapore. He may have been screwed over by Facebook before but he gets the last laugh now that he sold his shares for double what their worth and got to avoid some taxes while doing it :) In contrast, Mark choose to be more of a Sean Parker - a great creator of free products and, thus far, a fairly lousy businessperson. Companies like Spotify are amazing for users yet that doesn't stop them from losing millions each month in licensing. These companies dig themselves into holes from the very beginning and simply pray the financial problem fixes itself. My opinion and seemingly that of investors is that there is no indication that it will until the model itself is changed. Recent IPOs all tell the same story: that businesses not built with long term viable business models have trouble performing well on the market. Until "free" can work like Google enables it to in more companies, nobody is willing to bet on the hole not getting deeper without the likelihood of a larger round to keep these failing companies afloat.

WiseWeasel 14y ago

I bet it won't fall that low. $4 would be valuing the company at about 10x their 2011 income of $1B, which is extremely low for a company expected to grow. I wouldn't expect to see a valuation under 20x, or about $7-8 per share. My guess is ~$10 per share is the floor on this one. http://www.forbes.com/sites/tomiogeron/2012/02/01/facebooks-5-billion-ipo-filing-3-7-billion-in-2011-revenue/ http://www.forbes.com/sites/tomiogeron/2012/02/01/facebooks-...

cube13 14y ago
Is Facebook really expected to grow that much? Even counting the 13% or so fake accounts, they have around 800 million active accounts. That's a bit over 10% of the world's population. They can't really get the growth that's expected with their P/E, especially because of the difficulties that they're having with getting higher returns/user. They can't grow their userbase by that much either.
- rrreese 14y ago
  FB can grow either by increasing it user base as you suggest, or by monetizing it's users better. So if it say increases usage by 5x and monetization by 5x you are looking at a 25x multiplier. Will this happen, I have no idea.
  - mikeryan 14y ago
    Unfortunately for Facebook, this is fighting a few trends. users numbers have gone down in the US and Britain [1] and mobile usage is going up [2], and Facebook is having a much harder time monetizing mobile over the web. I agree with your general premise however, that Facebook's primary growth won't be on the user base, but needs to be on the revenue per subscriber numbers. This is going to really test one of the Valley's most recent premises, that building a massive user base will also create a massive business (Twitter, Instagram I'm looking at you...) [1] http://www.telegraph.co.uk/technology/facebook/8573340/Facebook-usage-drops-in-Britain-and-US.html http://www.telegraph.co.uk/technology/facebook/8573340/Faceb... [2] http://www.forbes.com/sites/ericsavitz/2012/05/09/facebook-tweak-s-1-adds-language-on-risks-in-growth-in-mobile-useage/ http://www.forbes.com/sites/ericsavitz/2012/05/09/facebook-t...