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  1. Roll the dice.. and live
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    Facebook IPO Blues...


    So my friends how many of you out there have already lost money after buying FB shares? I could not beleive the valuation of that IPO my guess is the shares will continue to fall as they do not have a revenue model that justifies anything like that company value...
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    EGOL
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    I also think that the price will fall more. It fell today under very heavy volume. The current price is at $90/user.

    And, when lock-up period is over for insiders there might be a lot of selling... read about it in second half of this article...
    http://news.cnet.com/8301-1023_3-57438348-93/why-facebooks-stock-is-tanking/?google_editors_picks=true
    Last edited by EGOL; May 21st, 2012 at 08:21 PM.
    * "It's not the size of the dog in the fight that matters, it's the size of the fight in the dog." Mark Twain
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    I just love how the tracking in the link EGOL posted is "Google Editor's Picks"

    I've always wondered why Facebook's value was so high anyhow. Yeah, a lot of people use it, but does that really make it so valuable?

    Hey SEO_AM, are you able to pull figures on it yet?

    Comments on this post

    • EGOL agrees : I wanna hear what SEO_AM has to say about this. :-)
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  7. SEO Since 97
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    It's like wheres the value, I too think it's going to dive..it may make history twice...the biggest and the fastest to fall.
    I think it way over inflated...reminds me of the dot com boom.
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  9. B afraid.. B very afraid!
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    Originally Posted by jsteele823
    Hey SEO_AM, are you able to pull figures on it yet?
    What a scam! Everybody tried to apply the Google advertising model to Facebook. They are two different animals serving two different mind sets.

    A typical Google user is SEARCHING for information while a typical Facebook user is CHATTING or exercising self-love bordering on exhibitionism.

    A searcher will click on ads that help to inform the user, while a chatter will be blind to any ads thrown in front of them.

    The difference in users being true... Google enjoys TEN TIMES the click rate as Facebook. To match Google revenues Facebook would have to have TEN TIMES the Google users.

    Bottomline: Facebook will likely have a bitch of a time monetizing their user base. This could be fatal.

    Edit: Once Facebook files their first quarters results (10Q), I will run an in depth financial analysis comparing FB to GOOG. The operating comparisons should be very interesting.

    Edit #2: Facebook has already lost General Motors as an advertiser. GM was VERY disappointed in Facebook's performance. Writing on the wall?

    Comments on this post

    • EGOL agrees : Wow! Thanks for this.... glad I didn't buy any. Makes total sense.
    • prasunsen agrees : When I saw that musicians and actors will form companies to invest in FB it was clear it's a bubble
    Last edited by SEO_AM; May 21st, 2012 at 11:10 PM.
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  11. SEO Since 97
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    Originally Posted by SEO_AM

    Edit #2: Facebook has already lost General Motors as an advertiser. GM was VERY disappointed in Facebook's performance. Writing on the wall?
    When I saw that I had to ask myself...Self who at GM thought it was a good idea to advertise there in the first place...what a moron...People don't go to FB to buy cars, never have and never will. It make me wonder how some of these marketing people think spending that kind of money there.
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  13. Roll the dice.. and live
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    Originally Posted by SEO_AM
    What a scam! Everybody tried to apply the Google advertising model to Facebook. They are two different animals serving two different mind sets.

    A typical Google user is SEARCHING for information while a typical Facebook user is CHATTING or exercising self-love bordering on exhibitionism.

    A searcher will click on ads that help to inform the user, while a chatter will be blind to any ads thrown in front of them.

    The difference in users being true... Google enjoys TEN TIMES the click rate as Facebook. To match Google revenues Facebook would have to have TEN TIMES the Google users.

    Bottomline: Facebook will likely have a bitch of a time monetizing their user base. This could be fatal.

    Edit: Once Facebook files their first quarters results (10Q), I will run an in depth financial analysis comparing FB to GOOG. The operating comparisons should be very interesting.

    Edit #2: Facebook has already lost General Motors as an advertiser. GM was VERY disappointed in Facebook's performance. Writing on the wall?
    On top of this... When the lock-up period ends and all those new millionaires try to sell their stock to realize their wealth one wonders who the buyers will be... A lot of people I think will loose a lot of money…

    Comments on this post

    • SEO_AM agrees : I bet most had very low option prices. If so, they will be thousandaires NOT millionaires unless the monetizing key is found.
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    Originally Posted by gazzahk
    On top of this... When the lock-up period ends and all those new millionaires try to sell their stock to realize their wealth one wonders who the buyers will be... A lot of people I think will loose a lot of money…
    Makes me happy I didn't by an shares, but its worth watching because I don't think FB will be going any time soon so maybe shares will go up again in time?

    You never know, the new move between FB and Bing could give them that extra boost again, but I guess only time will tell. I think I will defo be keeping an eye on it just on the off chance that shares do start to increase, just because it would be interesting to see what happens.
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    EGOL
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    Originally Posted by SEO_AM
    The difference in users being true... Google enjoys TEN TIMES the click rate as Facebook. To match Google revenues Facebook would have to have TEN TIMES the Google users.
    OK... so google has 10x the clickrate. Facebook has 10x the pageviews per visitor (just guessing).

    However, conversion rates of the visitors are what will drive value for the advertiser and determine the cost per click that they are willing to pay.

    I think that their conversion rate will be really low - a fraction of what google-referred visitors will be. 1/5 (just guessing).

    So, would you be a buyer at $8?

    That's my guess at valuation - unless FB initiates a membership fee or paid premium services. Then $90/visitor might not be so high?
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  19. B afraid.. B very afraid!
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    Originally Posted by EGOL
    ...unless FB initiates a membership fee or paid premium services. Then $90/visitor might not be so high?
    How many people would be a subscriber and pay for the privlege of using Facebook? How many sites are there today that have hundreds of millions of users that successfully collects subscriptions?

    The true facebook valuation is still high for an IPO. My guess is around $5-$7 billion, but nothing like the $100 billion placed on it by the underwriters. The underwriters on the day of IPO were actually jumping in and buying stock to make sure it did not drop below the IPO offering price of $38/share. I bet it would have dropped like a rock to $30-$32/share if they did not do any underpinning of the stock. That would have been a disaster. As it is... Wall Street got ripped off.

    Facebook could (maybe) find a way to monetize that I/we just cannot envision right now. If they do, their valuation increase would be substantial. I wish them luck.

    Comments on this post

    • gazzahk agrees : He he maybee they could open a big online casino/bookie.... I agree completley with you...
    • Test-ok agrees : Yep..it's being inflated...I see it crashing
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    EGOL
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    Originally Posted by SEO_AM
    The underwriters on the day of IPO were actually jumping in and buying stock to make sure it did not drop below the IPO offering price of $38/share.
    That should not be allowed. It forced noobs to pay more!

    Originally Posted by SEO_AM
    I bet it would have dropped like a rock to $30-$32/share if they did not do any underpinning of the stock.
    I just got a quote and it is under $32. I will buy at $8.
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  23. B afraid.. B very afraid!
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    Morgan Stanley, lead underwriter, and others might be looking at some serious legal problems. This thing is so overinflated and false that it stinks from any distance.

    Edit: As predicted, the lawsuits from investors are being filed.
    Last edited by SEO_AM; May 23rd, 2012 at 12:19 PM.
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    My rule for buying stock is not to by anything I don't use and don't buy anything I use that I don't absolutely love (My Apple stock comes to mind). I have a FB page and use it to keep up with family and post pics. Never use for biz. Never "like" client's pages and never get involved in any of the other pages because i don't mix biz and pleasure. I'm sure lots of people do the same thing. For that reason, I don't think FB will fly. I see it tanking. Big time bubble. Hope his wife cashed out on the honeymoon.
    Frankly, I wonder who Frank is and why he has his own adverb.
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  27. B afraid.. B very afraid!
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    Even if FB totally tanks, Mark will still realize a minimum of hundreds of millions and likely several billion. I have no tears for him... He stole the idea and made a fortune with it.
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  29. Roll the dice.. and live
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    Originally Posted by SEO_AM
    JPMorgan, lead underwriter, and others might be looking at some serious legal problems. This thing is so overinflated and false that it stinks from any distance.
    Looks like the s**t is starting to hit the fan...

    http://money.cnn.com/2012/05/22/markets/facebook-ipo-morgan-stanley/index.htm?cnn=yes&hpt=hp_bn1
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