FaceBook - head of another DotCom crash?
Discussion
130R said:
I don't know, I bet you would take Google's IPO in 2004 now ... (another one the "experts" doubted). Might seem overpriced but they do have a huge amount of potentially very lucrative data.
Possibly, but Google and it's ilk weren't mature at the time. And it is now the defacto Internet search engine used for everything including searching for product to buy. From an advertisers pov I think that is very different to the FB proposition. And I see Google constantly twisting and turning and finding new ways to improve itself - it's evolving really well IMO and it's hard to see competitors leading a sustained charge.Plus FB is not "the new kid on the block" any more. It's a known quantity. Does it have plans to extend its reach or will it succumb to fashion? And is it really as dominant as a 1bn user figure might suggest.
I appreciate I'm anti social media
A sign I'm getting old I guess. But if FB went out of action for a week I suspect the wider impact would be minimal. If Google went down for a week it would cause major issues for web based businesses and Internet usage in general I think. Yes, alternatives exist. But they're nowhere near as ubiquitous as they're nowhere near as good.I’m no investment genius but I must say that I would be concerned to invest in a business who’s success or failure relies massively on the most fickle and changeable demographic know to man and who are in the main reliant on their income from Mum and Dad.
Reading that article from the Huffington Post I see a lot of my own uneducated thoughts being verified by those with a much better knowledge of the topic.
I also remember when Friends Reunited, Myspace, Bebo et al were about to take over the World.
Sure FB is ingrained in a lot of people’s everyday lives today but the Next Big Thing could see that disappear in a matter of 12 months or less and FB become as ‘out of fashion’ as texting...
Reading that article from the Huffington Post I see a lot of my own uneducated thoughts being verified by those with a much better knowledge of the topic.
I also remember when Friends Reunited, Myspace, Bebo et al were about to take over the World.
Sure FB is ingrained in a lot of people’s everyday lives today but the Next Big Thing could see that disappear in a matter of 12 months or less and FB become as ‘out of fashion’ as texting...
Isn't the entire point of an IPO to raise investment money that they then, you know, invest into the company? Yet if you read the prospectus they say they have no plans to do any such thing with the money.
Facebook said:
The principal purposes of our initial public offering are to create a public market for our Class A common stock and thereby enable future access to the public equity markets by us and our employees, obtain additional capital, and facilitate an orderly distribution of shares for the selling stockholders. We intend to use the net proceeds to us from our initial public offering for working capital and other general corporate purposes; however, we do not currently have any specific uses of the net proceeds planned. We may use a portion of the net proceeds to us to satisfy a portion of the anticipated tax withholding and remittance obligations related to the initial settlement of our outstanding RSUs, which will become due approximately six months following the completion of our initial public offering. Additionally, we may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies, or other assets. However, we have no commitments with respect to any such acquisitions or investments at this time.
Pending other uses, we intend to invest the proceeds to us in investment-grade, interest-bearing securities such as money market funds, certificates of deposit, or direct or guaranteed obligations of the U.S. government, or hold as cash. We cannot predict whether the proceeds invested will yield a favorable return. Our management will have broad discretion in the application of the net proceeds we receive from our initial public offering, and investors will be relying on the judgment of our management regarding the application of the net proceeds.
We will not receive any proceeds from the sale of shares of Class A common stock by the selling stockholders. Mark Zuckerberg, our founder, Chairman, and CEO, will offer and sell shares in our initial public offering. We expect that substantially all of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur upon his exercise of an outstanding stock option to purchase 120,000,000 shares of our Class B common stock.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. In addition, the terms of our credit facility contain restrictions on our ability to pay dividends.
Pending other uses, we intend to invest the proceeds to us in investment-grade, interest-bearing securities such as money market funds, certificates of deposit, or direct or guaranteed obligations of the U.S. government, or hold as cash. We cannot predict whether the proceeds invested will yield a favorable return. Our management will have broad discretion in the application of the net proceeds we receive from our initial public offering, and investors will be relying on the judgment of our management regarding the application of the net proceeds.
We will not receive any proceeds from the sale of shares of Class A common stock by the selling stockholders. Mark Zuckerberg, our founder, Chairman, and CEO, will offer and sell shares in our initial public offering. We expect that substantially all of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur upon his exercise of an outstanding stock option to purchase 120,000,000 shares of our Class B common stock.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. In addition, the terms of our credit facility contain restrictions on our ability to pay dividends.
Edited by Oakey on Tuesday 15th May 10:17
- I think Facebook is over priced.
- I think it will go down in value.
- I would not like to try to guess when this will happen.
Oakey said:
Isn't the entire point of an IPO to raise investment money that they then, you know, invest into the company? Yet if you read the prospectus they say they have no plans to do any such thing with the money.
Reads to me as they're raising it for working capital, to pay some tax bills and to build a war chest for acquisitions, although none have been formally identified.Deva Link said:
Saw a report today that says General Motors will stop buying ads on Facebook as research has shown they have no effect.
They will continue to use free Facebook postings to promote themselves though.
This goes into the "no sThey will continue to use free Facebook postings to promote themselves though.
t Sherlock" camp. 8yr old girls, spotty 14yr olds and gangstas tend not to buy too many Zafiras (That said, maybe in 10yrs' time we'll see a sudden spike in Vauxhall sales and all will be forgiven).
PS "We're IPOing so we can pay our tax bill. No plans to do owt else with the money". Taking the piss on their sales pitch
tank slapper said:
I read an article about this yesterday which made some good points: http://www.huffingtonpost.com/john-f-ince/facebook...
This pretty much sums up my view. I'm not on FB but as far as I can tell the vast majority of the 600m users are people with too much free time (ie. low income) or from countries with little disposable income.LinkedIn on the other hand will target much more lucrative users at a fraction of the operating costs.
If I could short-sell Facebook over the next 5 years I would.
theaxe said:
This pretty much sums up my view. I'm not on FB but as far as I can tell the vast majority of the 600m users are people with too much free time (ie. low income) or from countries with little disposable income.
I can believe that, there's a girl I know of that has done a total of 6 months of employment since leaving school some 14yrs ago. 5 kids to 2-3 different fathers and posts every facet of her life on there. youngsyr said:
Oakey said:
Isn't the entire point of an IPO to raise investment money that they then, you know, invest into the company? Yet if you read the prospectus they say they have no plans to do any such thing with the money.
Reads to me as they're raising it for working capital, to pay some tax bills and to build a war chest for acquisitions, although none have been formally identified.Being listed on the stockmarkets will also make it easier for employees to trade their shares as previously they weren't allowed to sell them on private exchanges.
Last year fb made $1bn, half of which was from the sale of virtual farm animals. Whilst any business that makes $500m selling nonsense to the hard of thinking is absolutely genius how in hell is it worth $100-150bn? Seems you need to look past facebook to what they could possibly do in the future but for some reason haven't done yet and discount all those lovely cashflows as if they already happened... hmm
fbrs said:
Last year fb made $1bn, half of which was from the sale of virtual farm animals. Whilst any business that makes $500m selling nonsense to the hard of thinking is absolutely genius how in hell is it worth $100-150bn? Seems you need to look past facebook to what they could possibly do in the future but for some reason haven't done yet and discount all those lovely cashflows as if they already happened... hmm
You have to wonder why the founders don't just take the money and run? Perhaps they will!They'd be set for generations.
Deva Link said:
You have to wonder why the founders don't just take the money and run? Perhaps they will!
Why do you think they've not floated until now? So the founders could milk the growth phase for all it's worth rather than making money for people outside the company in the early phases.There was a BBC doc about the IPO on Monday(which used 80% of the footage from the last facebook special) and that's what the bbc bird was told.
Edited by Marf on Wednesday 16th May 16:22
Edited by Marf on Wednesday 16th May 16:23
Murph7355 said:
This goes into the "no st Sherlock" camp. 8yr old girls, spotty 14yr olds and gangstas tend not to buy too many Zafiras
Don't forget, the whole point of facebook ads is that it's heavily targeted.t Sherlock" camp. 8yr old girls, spotty 14yr olds and gangstas tend not to buy too many Zafiras I like cars, photography and bicyles so I see ads for all those things. I never see an ad for One-Direction or My Little Pony. whereas 8yr old girls (and it's known they're 8, don't forget) will never see an ad for cars.
I have a group for my band, and we can even target our messages to our userbase by age, location, interests, relationship status etc., let alone the ads
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