Agreed...this is stupid...you bought FB because you had an expectation that it didn't realize, you speculated...
Flaming bust. When some guys wrote early on it was destined for about $20-$22 per share, I thought they were just being sensational.
I am impressed that investors this time around are quickly evaluating companies' actual profit potential. GRPN and ZNGA were two other companies that no one should have invested in if they actually looked at the business model instead of the hype of the name. I'm a bit surprised by LNKD, as I would have put them in the same category, but I don't use LinkedIn enough to know their revenue potential. That said, unlike GroupOn and Zynga, which I think are ultimately flawed as companies, Facebook will be fine as a business - its problems are entirely about an unrealistic stock price.
I probably already said this, but FB is boring -- it was fun for a while, but now it's like checking email with lots of photos. I use it -but who thought this was a $100 billion dollar company?
What do you think Groupon could have done to create larger barriers to entry? I love this concept and was disappointed to see them falter so fast.
I'm not sure there is a real solution - the model is just too simple. Anyone with web knowledge could duplicate their entire site and backend infrastructure within a week. The only edge they had was being first on the scene and having the marketing / namebrand edge. But there's just no reason for customer loyalty in this space - you can get offers from all the companies, so there's no reason I need to support Groupon over LivingSocial, for example, when I can just sign up to both. But I think the bigger problem with the whole concept is that it's generally not a good repeat value proposition for restaurants, which is their main client base and the most popular of their offers. The way they pitch it sounds great (free marketing, we pay you), but as people do the math, they realize they are selling stuff at 75% off and generally taking a loss. It only pays off if you develop repeat customers, but the people who use Groupon are mostly interested in great deals and less likely to come back and pay twice as much. I think Groupon is great for startup restaurants who don't mind losses in exchange for getting their brand out there. And it's great for service industries - dentists, spas, massage places, acupuncture, etc. Because you can discount labor without taking a loss and you're much more likely to develop brand loyalty. If you go to the dentist once using a Groupon, you'll probably stay with them instead of picking another dentist in 6 months. But this is a much smaller market for Groupon, and I think people lose interest because they want restaurant deals. I have other issues with Groupon's finances and lack of profits (they should be obscenely profitable and aren't), but that's more company-specific than about the whole daily deal market in general. I think there's a market for these deals, but ultimately it will be fractured with so many big players like Google and Facebook trying to get involved. At its core, it's a coupon company no different than ValPak and similar marketing agencies, just with a unique twist. But we'd never consider valuing those types of companies in the multiple billions of dollars.
Groupon also has the issue of being heavily dependent on their sales force on the ground. This is how they attract new business, and the cost to keep a sales force of that size gets expensive. This limits their ability to scale as well.
What do you guys think the bottom is for FB? $15? At that point, would it be worth taking a look at it as a growth stock?
is the clutchfans contrarian indicator starting to fire? it's usually 1 to 2 days early, but it might be a decent time to look long on FB. i'd really like a rip down to $18 to sell some puts and look to buy calls or get long stock.
