Interesting about the unlimited demand at $38. An investment banker once explained to me that the ideal price for an IPO is about 10-15% less then demand. The idea is to max the amount to the co (and the fees too) while placating the IPO investors. If the opening price dips below IPO price, a great number of the IPO guys will have their fingers on the 'sell' trigger. Waiting for a recovery to get out. And that's a big supply hurdle to overcome before the stock can truly go up. If you keep 'em in the money from the get go, they're more likely to hold. But no matter how you look at it....with $22B in volume today, somebody got paid.
I laughed when a co-worker was fist pumping when he bought at opening around $42. He said I was a fool and he would make at least a 30% return before closing today. Ha Interesting to watch this stock over the next few weeks
Well now that it has closed around 38 what do you guys think in terms of buying and holding long term? Considering how much value is already put into the stock is there really room for growth that is realistic?
The major indices are down. Wait for the market to bottom out like it did last year and buy then after. Facebook has much potential.
MS has a lot of stuff tied into social media. They're probably hoping to ride the bubble. Still, questionable.
http://www.reuters.com/article/2012/05/19/us-facebook-morgan-stanley-idUSBRE84I01620120519 So Morgan Stanley got $67 million in fees for the underwriting process itself. If they were the only underwriter buying all the $38 shares (no idea if others were participating too) to prop up the price, then they bought up approximately $2 billion in Facebook stock or 52 million shares according to this article.
Either as a stock or a merger, it will probably seem like a credible buy to someone at some point. How much cash does Microsoft have?
Deleted my facebook last week. Take that! Does most their revenue really come from Zynga or whatever it's called? I assumed the major cash flow was from selling our personal information to companies.
They make money off of Facebook credits as well as deeply targetted advertising. They don't sell your personal info to anyone, though.
I worded it poorly but that is what I mean with their advertising. It goes past your listed interests on your page. It will log every page you visit on facebook and relevant advertising will appear. Also it will advertise according to the text in your comments with friends. If you were to talk about a cat with someone, cat adoption ads would appear.
Yeah - that's exactly what they do. But the Cat Adoption agency wouldn't actually know that they are advertising specifically to you - they would just tell Facebook "target people who like cats" and then Facebook would do that internally. So your info basically stays within Facebook, at least. This is similar to what Google does with Gmail as well.
I just wonder how secure our information is. I know the government wants to use Web 2.0 to get a better idea of what the people want. An attempt to increase transparency i guess. I think Facebook is too popular now to fail like Myspace did. My parents aunts uncles grandmother all use Facebook and I doubt they will change, and they are the ones with money the advertisers want. A new fad may come out and the younger crowd might switch, but I think Facebook has the baby boomers hooked for the long run.
I agree - Myspace never hooked people. You didn't have to be a member to see anyone's Myspace page, so there was no sense of community. Facebook did a lot of things right in terms of the interactive side to make it difficult to move to another ecosystem, so I think they are well set for the long run in terms of userbase and growth. And as a result, they and Google are the only two places in the world where an advertiser can target any and every demographic in any way they want - because those are the only two places that have access to a billion people and the ability to break them down by virtually any categorization. So as a company, I think they are phenomenally positioned to be the dominant player for the foreseeable future in social networking - and they should be really profitable and have solid demand for ads. But whether they can generate enough revenues to justify their insane valuation and projected growth is a different question, in my mind.
It will be interesting to see how they plan on growing revenue when it will be very difficult to get significant growth in users. One area they have really struggled is mobile. They have to develop better apps and figure out a way to make money in that space.
