Neither Facebook or Yahoo/Bing can compete with Google. I heard a rumor Facebook and Yahoo/Bing were looking to team-up for a search engine. THAT might be the game changer. Aside from that Facebook seems pretty worthless to me unless they starting selling their leads or getting their ad engine to actually perform.
Really? BTW, I still haven't gone timeline! Even though every time I get on it tries to trick me into getting it.
FB numbers just mind numbingly crazy.....Zuck to get a check for $1.5B today - cash money; poor Napster guy Parker only $38M http://finance.fortune.cnn.com/2012/05/17/facebook-ipo-who-got-richer/ And...so far over $12B in volume traded. Will be much higher by day's end. Wall Street partying like it's 1999.
Its crazy. According to this, if I'm reading this right... the employees are now millionaires. http://money.cnn.com/galleries/2012/technology/1205/gallery.facebook-ipo-billionaires/index.html
lots of wealthy folks now. Oh to be a BMW dealer in Palo Alto. David Cho -- who took shares instead of $60K for a mural now with an estimated $200m. Winkenboss twins who (according to the movie) didn't do much except have an idea, and a lawyer -- $228m Average employee take at $4.1m (obviously very unevenly distributed...). absent from that list was co founder Eduardo Saverin who had an 'undisclosed' settlement. And a big windfall for the state of California making Jerry Brown very happy. Maybe they'll reopen the parks?????
and it seems Microsoft's two best moves of late have been investing in Apple and Facebook. It's like a giant venture fund sidelining as a software developer.
Heh. Facebook back down to its initial offering price of $38. Some analysts were expecting it to rise almost 50% today. Oops. Here's an amusing satirical letter from Zuckerberg to potential investors. It pretty much sums up why I'd never invest in Facebook.
Looking at the bid/ask numbers, there was basically unlimited demand at exactly $38, meaning that the underwriters were basically gobbling up shares to hold the price from falling below $38. It will be interesting to see where the stock goes from here - if it falls going forward, the underwriters are going to be stuck with potentially big losses. On the good side, Facebook the company came out of it well - unlike many tech IPOs, they weren't screwed by their underwriters and they got "fair value" or maybe excess value for their shares.
They shouldn't have raised the IPO price. My assumption is that it was greed on the part of the banks.
The banks benefit the most by having a low IPO price, because they and their favorite clients get the shares at that price and then can sell it at the inflated price. So here, by raising the IPO price, Facebook gets some short term bad publicity, but they raise more money from the IPO itself. The banks, meanwhile, are stuck taking on all the risk since they had to gobble up all the excess shares that people kept selling at $38. The banks made fortunes on IPOs like LinkedIn and screwed over those companies in the process. I think this one was handled much better, at least from the perspective of the financial benefit to the company itself.
It's as real as the top article on their homepage: Greece No Longer a Nation; Announces Plan to Become Social Network
As far as I remember from the IPO I worked on, the bank's fees were based on the amount of money the company raised in the IPO. So, with a higher IPO price, they got more in fees.
The direct fees, yes - but that's actually a fairly small part of the total benefit the banks get (and Morgan Stanley actually offered to take a smaller fee for the honor of being the lead bank in this). The real benefit with these hyped tech IPOs comes from the spike in the stock. For example, in addition to all the bonuses they get to give to their favorite clients, the banks get 50 million shares of overallotment of FB stock to "stabilize" the IPO over the first 30 days - basically, to use at their discretion. So if FB trades up to $50, they can sell that 50 million shares for a nice $600 million profit. Basically, most of the benefit to the banks with hyped IPOs is from the secondary pieces rather than the fees themselves.
Agreed - I'm not sure if this was a one day thing for them just to make sure it held positive today, or if they'll continue that next week. But assuming it was a one day thing, we should get a much better sense of the real demand on Monday. The other aspect here is that in 3 months, the float goes up by something like 50% when various holders get out of the lockup period, and then I believe it goes up another big chunk in 6 months. So there could be a lot of supply coming on the market from people looking to cash out their profits (which would be a wise thing to do).
