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I'm glad people who don't understand technology are the "ex[erts" in creating the "value" of FB. Here's what you should know if you are going to invest. 1.Facebook is not an advertising company. 1a.They are a technology company.2. The P/E in the triple digits should not be as alarming as the old cronies would suggest. 2a. There model is basically in "toddler" stage. Their ability to double earnings YOY for 3-5 years is not likely, but also not completely out of reach.3.The monetization of mobile users is unknown.3a. For now, sure. But I'd bet on the brightest and best silicon valley, Harvard, MIT, etc.. "geeks" to figure out the software and/or processes to track this down to the percentage of a penny within 18 months. 4.The Zuckerberg hoodie effect4a. Get over it- he might not be the typical CEO mold, but that is a GOOD thing. He is the Steve Jobs/Bill Gates of this generation. Zuck is basically a combination of Gates (innovation), Jobs (master marketer), & Bezos (Leading HIS business trumps everything else).... To the naysayers... Please post about this now so I can bury you in "i told you so's" in 5 years. What's to come- (think technology, not advertising).Facebook Email platform (connect business life to personal life)Facebook cloud (archive all pictures, videos, conversations w friends via FOR PAY cloud service)Facebook commerce- want to buy something from that company you "like". Buy it with Facebook credits that you purchase. You will get a discount, while the company (even GM) will be charged for transactions.Facebook application services- can't begin to imagine what those brains are creating/acquiring on the app front. Facebook games- good bye ZNGA. They will either get taxed to death, surpassed, or just acquired by FB. Facebook analytics- capturing trends, habits, & profile information of users at this mass (1B and growing) can not be overlooked. The possibilities are endless.The list can go on... but at the end of the day FB's $3-5B in ad revenues right now will be a drop in the overall bucket 5 years from now.
The company's growth would have to exceed 40 percent per year for 10 straight years to deserve its current valuation ($100 billion IPO). The things you mentioned were the same things investors were saying in the late 90's about every single tech stock - every new IPO at the time somehow had unlimited growth potential and for that reason deserved a ridiculous valuation.
The truth is even if every single person on earth used Facebook - the company still wouldn't be able to earn enough to justify the valuation. The fair value for a company like this (taking into account growth) is around $15 - $20 billion.
just wait until they combine with netflix or another company and start a facebook premium membership account for only 1 us dollar a month if only 1 billion of its 2, 3 or 4 billion or how ever many fb users there are now (700 million in china alone; in a country that blocks fb) decide to upgrade to the very low cost of 1usd per month fb premium subscription account that looks like an easy 1 billion usd per month positive cash flow call me crazy but sooner or later fb will have some kind of subscription service look at it that way and forget the advertising revenue
@BuffJr.. you are #1 on my I told you so list in June 2018 :).... You are the exact stance that I disagree with in my post, and based on your commen comparing Facebook to "every tech stock" from the 90's & the ridiculous idea of 40% YOY growth for 10 yrs that you are not that familiar with technology as whole. Which is fine, the world needs number crunchers as much as they need tech speculators.... But one thing that even a number cruncher needs to understand is that there has NEVER been a company that compares to facebook (not sure if that is good or bad yet..haha). There is no direct comparison to work from, which is why people are scrambling to make sense of any sort of valuation... At the end of the day I compare it to GOOG, MSFT, AAPL, AMZN,EBAY,YHOO,NFLX, LKND, and some others if I want to stretch. These are basically all of the current and/or future titans of innovative user based technology. So the question you have to ask is, what businesses in the list above can facebook steal? make profit from? acquire? etc... The next question is. 5 years from now, which of these companies is the most likely to double in market cap. Does AAPL get to $1trillion before FB gets to $200B?
FYI- I'm long on most of these tech stocks ( all but NFLX), but Facebook might have the most overall upside at this point... It's no surprise that MSFT, Goog, AMZN, LKDN were all HUGE early investors in FB. They know how much of a threat Zuck and his gang can become....
But good luck my friend
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It is not a technology company, not in the same matter as google. They currently are a marketing company with a foundation that can be used to deversify if they allow it to happen. I currently belive this stock will need to come back to earth around 15 to 20 or have profits to match the current asking price.
This stock has tons of downsides with few upsides and tons of risk. I also think as long as mark keeps over 50 percent of the company the growth will continue to stagnate.
Not an advertising company? If you make all your money through advertisements, you are an advertising company ... plain and simple. Facebook, much like Google just makes technology products to make that advertising possible. I tend to classify a company based on how it generates income, not what products it has.
I can't name an innovative tech that FB has created, outside of FB, which is a myspace clone. People go nuts when FB changes a pixel in their layout... how are they going to react when they have to start to pay for things? Or see more ads? I can't say this enough: LOWEST CLICK THROUGH RATE ON THE INTERNET FOR ADS. They suck at the one thing that makes them money. User base is saturated.
Also all the services you listed that FB could potentially monatonize: someone else already does all of them for free. Not to mention the upfront capital required for these cloud based services is astronomical.
No one will EVER pay for anything on FB besides ads. End of story.
Gates innovation? lolwut?
Let's not forget we are talking BILLIONS for a company that produces NOTHING. Oh sheeple....
Has anyone read about the revised revenue and earnings estimates that are just now being released?
Here is the link:
http://finance.yahoo.com/blogs/daily-ticker/facebook-bankers-secretly-cut-facebook-revenue-estimates-middle-133648905.html
I usually don't pay attention to other people estimates (because I do my own research); however, what happened in this particular situation is illegal.
If Facebook is a technology company and not an advertising company, then they are way, way behind the game. Google has a long head-start and much better business and work environment practices in place to spur the kinds of innovation and creativity that are needed to drive a technology company.
Google has produced results. Facebook has produced a parade of "features" that are almost universally met with the outcry and rage of their user base every time they are introduced. Did you hear of anyone screaming about how much Google sucked when they introduced "Froogle" or Instant Search? Facebook has an uphill battle. 1 Billion users isn't going to make that any easier.
This is eerily similar to what was said about AOL....'People don't understand how the internet works'.....unfortunately we do understand how it works..generally downward without consistent revenue...which FB doesn't have. 50 000 'likes' on a FB ad doesn't equal as many customers, and nobody knows how many customers it actually will bring in
Aside from providing a social networking platform what other "tech" does FB provide that has the potential to be monetized? FB is a closed system that requires active user participation and attendance to provide their medium to deliver advertisements. It's no different than television in that respect. It's also why FB spent a billion dollars on Instagram. Instagram provides users a platform to link their cell phone photographic proclivities with their FB account. The only reason this matters is a large percentage of FB users utilize FB to "picture stalk" friends, relatives and strangers. This also points to a massive issue FB is facing with regards to monetizing its client base, users don't see FB as a medium for information delivery, unlike google or bing. To get users to begin to see FB as something other than a social platform is going to require a massive paradigm shift in the way most folks go about gathering product info, which is why Google still holds a signficant advantage over FB in the cyberspace advertising. When you want to buy a new vacuum you don't go to FB to see what your friends are doing, you Google vacuum and check prices and compare models.
Last but certainly not least, FB generates a large part of its traffic from its users updating pictures and "status" information on the "interesting" parts of their lives. Unfortunately, it has become common practice for employers to request access to your FB account and without legal safeguards, this has significant potential to reduce the amount of "interesting" traffic posted on FB. No one cares to see the update on how someone brushed their teeth, clipped their fingernails, or made scrambled eggs. The mundanities of life are only "interesting" if "celebrities" are doing them. Hence, we have Twitter.
In the end, FB has to figure out someway to effectively deliver targeted advertising to its user base without alienating or creeping them out by providing too personal an advertising experience. Using the TV corollary again, FB is a leisure time activity for most people and Americans and a good number of western countries have shown an inclination to pay a premium for services like Netflix (what price hike?), TiVo, Hulu Premium, etc, that allow them to enjoy their "leisure" without the unwanted interruption of advertisements. This is why the Sponsored Kindle still trails the unsponsored Kindle in sales despite a decent discount on the adware version.
My twoish cents.
There is a certain reality that needs to be addressed. FB may have X million registered users, but how many actually do use it? I know a handful of people with FB accounts that have long since abandoned the site without deleting their accounts.
What does that mean in real dollars and cents? Simple, if the user numbers are inflated, advertisers are not getting as much bang for their bucks, and that will soon be discovered and reacted to.
Then if FB actually does start to charge for usage [major shareholders may push for this], I think we can all extrapolate that real user numbers will diminish even more.
This IPO drama was not all that surprising. It only validated a lot of savvy folks' belief that FB was, and still is, over-valued.
Every friend I have has a Facebook account and updates daily, some spend upwards of two hours a day on the service. Most investors on this website are not Facebook's demographic and don't have friends who update daily. Talk to young people about facebook, the website currently has a monopoly and a world of potential (search engines, video, music, commerce......)
Probably not helpful (from WSJ at about 3:30 EST):
Three Facebook Inc. investors filed a civil lawsuit Wednesday in Manhattan federal court, alleging the company and its underwriters failed to properly disclose changes to analysts' forecasts made at the underwriting banks.
Investors filed suit against Facebook and its underwriters, alleging that changes in analysts' forecasts weren't properly disclosed. David Benoit reports on Markets Hub. Photo: Bloomberg.
The suit follows reports that analysts at Morgan Stanley and Goldman Sachs Group Inc. cut their revenue forecasts on Facebook amid the investor roadshow, a change that wasn't widely disseminated.
Wednesday's investor suit, which is seeking class-action status, alleges changes made to Facebook's offering document a week before the IPO priced didn't accurately portray the impact on Facebook's revenue growth.
Search engines? Facebook can’t beat Google in that department. Video, Music, Commerce? In these fields too there are much better and more experienced companies. What are you going to say next? Oil Exploration? Lol don't make me laugh! 20 years from now nobody is even going to remember that Facebook ever existed. The truth is - social media is just a fad and like all fads - it will eventually fade and be replaced by something new.
fb is going the way of myspace Suckerberg knows it, hence IPO. What a waist of time, for loosers without s life.
With Google you knew what you were buying into. A search engine with plenty room to grow. With FB you are buying hype. And paying a premium for it. It was a definite redflag when the MMs were throwing millions of stock at the average retailer.
Zuckerberg simply doesn't know how to effectively monetize it, nor does he care. He will sell a couple billion dollars worth to keep his life set and then simply do whatever he wants to do with the company.
Big Brother is watching and I am not referring to the Government.
What do you expect? This company is controlled by a person who has no idea how to run a business. Do you really want a CEO who can't even read financial statements? This guy is just a kid who got lucky (like winning the lottery) when he created Facebook. He is no businessman that's for sure! In the long run this company will fade out of existence and will be replaced something new and better.
Facebook is a joke! I guarantee that nobody will be using it 10 or 20 years from now. Just like nobody is using MySpace or Friendster today.
I am with you Captain. As a twenty year old in college, I literally know one person in my age group who doesn't have a FB account, and he's a weird "off the grid" type. There has never been anything like FB. Myspace and Friendster were gimmicky and badly managed. There are simply too many users on FB today for anyone to ever dethrone the company and with such a massive base, who knows what opportunities they have for monetization. I mean what other company has access to almost a billion clients, at least half of which connect with the website daily? I for one cannot even remember what it was like to have a social life prior to FB (I guess people called each other more often?). This company has infinite potential, there are still billions of people left to join and the the third world to develop. Facebook could become bigger than anyone could imagine.
I just don't get some of you people. Facebook is getting old and that's a fact! As soon as something new comes out Facebook will start losing users. People keep thinking that this joke of a company will be the next Google. I simply have got to disagree!
So what opportunities does this company have for monetization? More ads (that nobody clicks on)? This company already has close to 1 billion users - about 14% of the world population. Everybody that wanted a Facebook has one. People living in third world countries probably will never make a Facebook account because they have more important things to worry about - like trying not to starve. Even if somehow every person on earth used Facebook this stock would still be grossly overvalued. Overall, this is one of the most hyped, most overvalued, and most pointless IPO's of all time. I truly feel sorry for those who were fooled into investing in this trash stock.
My space and friendster disappeared BECAUSE of facebook. Don't overlook that. I understand the whole valuation issue, lack of knowledge on the direction of the company, but while people are busy being blindsided by the media shares were sold at $38 -$45 and will be repurchased at a lower price later. Genius playing the masses and the market, laughing all the while. This company is a movement. We can only wait and see. I can't remember what happened, but the only form of communication available was FB. Some governments have to scare(manipulate) folks into giving up their privacy and people just volunteer it everyday to FB. I used to be a FB hater until I broke down and opened an account. It really is something awesome. Even my dad uses FB. I am not saying that the current price is warranted but I do believe the stock price will catch up with itself in the long term and greater.
Facebook should acquire Twitter. The newly merged company would be called... Twitterface!! tadaaa : )
Actually, FB is worth $200B+, based on the eyeballs method of valuation ;-)
I read somewhere that some analysts were giving FB a fair value of $300 billion! LOL these are the same analysts that told everybody to buy at the height of the tech bubble in the late 90's and early 00's. Why Facebook deserves a higher valuation that Coca-Cola (one of the greatest companies in history) is beyond me.
Times like this remind me of what Ben Graham once said about the market - "In the short run the market is a voting machine, in the long run it’s a weighing machine."
Normal value models don't work with an immature company. So any P/E, growth rate, Rev, etc.. metric you are using can be thrown out the window. People comparing it to Myspace, friendster, AOL, etc.. don't understand technology. Look back at Google, Microsoft, Apple, Amazon,etc... Look where they started and where they are now. Google- started with search engine.. now dominates search & advertising, has a mobile platform, overtook IE with Chrome, offer cloud application suites, video services via youtube... the list goes on. Same with the others... If you don't realize that the access to these users is the single most valueable asset that FB owns then you don't "get it" and you never will. If you think it will be a fad, then why haven't users jumped to Google plus, Apples "ping", or any of the other half assed late to the party social media rip offs?
Now that the P/E is down to near 50 i believe this stock is basically a steal. It may go down short term and I kind of hope it does (despite owning at IPO price and some more at $32). I'll continue to buy in small bunches as it dips. Longterm it will be laughable at how many analysts were dead wrong about this company...
If normal value models don't work (by the way that's what analysts said about every tech stock during the bubble of the late 90's) then how do you value this business?
Every company should be valued the same - in the end the intrinsic value of any business is the sum of all of its future cash flows discounted at a reasonable interest rate.
Zuckerberg is being sued for selling around a billion dollars’ worth of Facebook stock. I don't blame him for selling (the stock is grossly overvalued); however, what he has done is illegal. I can't believe there are still people praising this stock and saying that it’s cheap when even the company's CEO thinks it’s overvalued. This is one of the biggest IPO scams of all time!
You can't believe how people are still praising this stock- just like I can't believe you are taking a TMZ report of a lawsuit from a bunch of opportunistic scumbag lawyers has anything to do with this company and/or stock. That story is a joke, and the fact that you give it any merit speaks volumes of your ability to filter relevant information.... Do you realize that billionaires get sued daily, they just don't make the media because know one cares about it and it usually leads to nothing or some settlement if the suit has any merit what so ever... TMZ is looking for click bait so they can get more links and page views.... and if they are lucky maybe some more "likes" on their FB page from the trash they put out.
You cannot deny that this IPO was grossly overvalued. Most of the insiders sold right after the IPO because they knew that growth estimates were revised. The truth is there has been lots of insider trading associated with this IPO and those who are guilty of it should be punished!
The report on Zuckerberg selling FB stock is a rumor, however, most rumors have a basis in fact.
Wait until the big investors that bought before the IPO was released to the public are released from being locked down and dump their shares! FB is a great stock to own if you wait until it is about $12 share. The Captain is off course with this one and sinking fast!
$12 is still too much to pay for a fad/company that earns less than $1 billion in free cash flow and whose growth has slowed significantly.
FB is also making lots of acquisitions (and overpaying for them) to continue growing. However, anyone who is a true business analyst will know that growth through acquisitions is the worst kind of growth and usually always turns out bad in the end.
A few clarifying thoughts -- Facebook was forced to go public because it had too high of a % of private investment. This was far from an insider dump. That is a huge misconception that continues to get thrown out in many Facebook blurbs.
Growth through acquisition is very common in the tech field. ALL of the large techs have had major acquisitions that have fueled their growth, including tech darlings Apple and Google, and especially long-term heavyweights IBM, Oracle and others. In some ways, tech is almost like bio-tech that way. Small companies are usually absorbed by the larger ones if they bring enough to the table. It's the rare fish that is able to stay solo long enough to become a big fish.
The IPO was grossly over-valued. That has absolutely nothing to do with the current stock, which sits at $26, not $38.
Right now, I'm seeing a lot of buzz about how to short Facebook, and how it's the easiest money out there. Dumb money is entering the FB shorting space. The bottom is near.
The stock is still grossly overvalued even at $26 per share. The company would have to achieve some crazy long-term growth to justify the current valuation. Now, I would never say it’s impossible for a company to have double digit growth rates for 5, 10 or even 20 years, however, the likelihood of FB achieving this kind of growth is very slim. Not only would FB have to somehow manage to get every person on earth to use FB, the company would also have to branch out into other businesses like search engines, etc.... What I have learned by studying the history of the stock market is that most stocks that have extremely high expectations (such as FB) tend to under-perform in the long run.
Facebook doesn't need dramatic user growth to achieve dramatic earnings growth. You are keeping revenue per user constant which is an incredibly pessimistic perspective, considering that monetization is a relatively recent part of the Facebook growth plan. In fact, they don't need ANY user growth to achieve dramatic earnings growth. They just need to monetize what they have. Period. That said, I do not think that Facebook is close to saturation from a user perspective, either. There are a lot of reluctant holdouts waiting for it blow over.
Better to have high expectations than to have no future....ie....Groupon, Angie's List....et al. Facebook was overhyped, but the hype has gone overboard in the other direction, predicting ultimate failure of the organization entirely, which I find extremely unlikely.
just wanted to make several comments:
1. MS did their clients well with this IPO... IPO's should not double on the day of... they should maximize the money for thier clients which are not retail investors in this case.
2. Everyone talking about GOOG being better, so hows that google+ moving along for you guys? FB environment that easy to recreate, anyone can do it? you have the probably one of the best software companies in GOOG and they can't seem to do it...
3. Zuck needs to have full control, so things move in the direction of his vision, his vision has seemed to be pretty good so far...
4. FB is online realestate for ones identity, you like LNKD? watch FB has all the tools to move into this space and do it better (and probably for free)
5. haven't seen it so much here but tired of these sheep that blast FB for milking the market with this IPO, they damn straight should. SEC forces them to come out and be public for some stupid 500 private investors rule they should be able to take maximum advantage of it...
now would i buy FB? hahaha not at this moment... but i dont think they are dissappearing anytime soon.
Getting closer and closer to the start price.
Fearless prediction- sticking with my assumption that this stock's volitility is largely influenced by traders at this point.
3-6 months- will reach $33-35 (or above)
Near calendar year end2012/into Q1 calendar year 2013 will take a setback to around $30-32
Q2-Q3 calendar year 2013 will spike (there will be positive news and interest that will clear up Rev & Opp beyond original IPO news).. should drive stock price well ABOVE IPO price... Watch and learn kids.
If you have the guts and cash to get in during the high $20's and low $30's I would recommend doing so.
Good Luck
Seems like you're more of a speculator than an investor. Buying a great business (stock) at an attractive price and holding it for a very long time (compounding is your friend) is the best investment strategy. I guarantee you that in the long run I can absolutely crush most investors returns by doing very little actual trading.
You may very well be right, but I just can't get past the fact that you use the same reasoning
that was used for EFAX, ETOYS and many other E-something and I-something companies.
-
It was only a few years ago when every teenager spent all day on myspace
my fear with FB is that something else will come along
Facebook data-mining gold mine: I haven't seen much written about the real "gold mine" of Facebook and that is its user database. With over 900 million users and growing Facebook has collected a significant portion of the human population linked to names, email, addresses, faces, and their own social networks. There are a lot of interesting things you can do with such a database.
Another line of analysis is that of Facebook as a Customer Relationship Management system (CRM). Banks, for example could benefit from a close integration via Facebook with their customers by connecting automated analytics of customers through their Facebook page (cynics would say "spying on customers") to better understand their needs.
For example, most parents of teenagers also have Facebook to connect with their teenagers so analyse both. You observe that a customer's son is graduating from high-school in 2 years and that their son regularly posts pictures and articles about Ford Mustangs. The bank can use whatever interface they choose, the bank's own website accessed by a customer or a Facebook Banking App, and then not only offers them a customized loan to buy their son a Mustang as a graduation present, but in cooperation with car dealerships, links a loan offer to specific Mustangs for sale at that time in their local region that the automated CRM system has determined fall within those types of Mustangs that the teenage son would like most. At the same time they determine the teenager is college bound so they offer financial consulting, loans, and scholarship help to the parents and teenager find ways to finance their son's college education, and connect them with University student aid offices, who are also part of the Facebook CRM system, and offer students customized financial aid estimates - and all this FULLY-AUTOMATED.
At some point humans come into the game, but all of this could be done right now. Companies are doing it for free with Facebook pages and posting kittens to entertain their customers. Facebook does not benefit financially from this, and let's be honest, teenage girls think the kittens are cute, but seriously. Facebook is like the Higgs Boson (the "God Particle") of interconnections between various aspects of our lives. The data about our "likes" and by omission dislikes is invaluable for CRM systems. Facebook could be its own CRM or fully integrate with the leading CRM companies like Salesforce.com, SAP, Oracle, etc.
The catch is that this all hinges on privacy rights. Facebook and CRM companies must be granted full and legal access to personal data. But it shouldn't be a problem when it is explicitly state that all data-mining of Facebook's database is for the purpose of giving customers useful and educated choices BEFORE they even know or need to make a major decision like which car to buy your son, which college to attend, where are good vacation spots (that you clicked like on pictures on Facebook), what potential crisis situations are you facing in your region and how you can change your lifestyle to be prepared, etc. etc.
I'm in the camp that says in 5 years investors in Facebook won't be disappointed. Facebook may not be the "Face" of the popular social network platform, but it will definitely be the database driving it. I think data-mining in Facebook's database could prove to be a gold mine.
The truth shall set you free this afternoon after close of market. Enough said.
time to avg down again captain no bagger? lol
love all these FB slappies.
I'll take a first trading postion around 6 bucks.
Ouch, man.
21 bucks and falling!!! lol
How low can u go!
Funny how that captainnobagger or what ever he calls himself
is suspiously quite now. hmmm lol
I'd argue that Facebook *is* an advertising company, and if that the other services you mention (email, cloud hosting, commerce) are already dominated by other companies. (Google, Dropbox, Amazon). They aren't guaranteed success with their new services, in fact, I think they're going to have a difficult uphill battle convincing their users to adopt other services.
In response to your "Facebook is a Tech Company" argument, I'm sure Facebook is dealing with some pretty monumental software and computer engineering tasks, but I still don't see them as innovators in the same ranks as Apple, Google, IBM, Intel, and countless other tech companies. Facebook is big because they were "cool" for a while. They had a better user experience than MySpace (which isn't saying much) and they had that college-age niche locked down. Facebook's ability to maintain the stability of their service during their explosive growth is impressive, but where's the innovation? I think most of their innovation has been in managing the massive amounts of traffic they receive. Not a whole lot of innovation has gone into new products or services. I don't know that they're capable of innovating in that way. Unless they can prove me wrong, I'm short FB.
Whattya know....I passed CaptainFiveBaggr in the CAPScore rankings and I owe it all to Facebook!
Thanks, Mark Zuckerberg!!
And thank you, too, CaptainFiveBaggr. :)
I guess I just don't understand technology quite like you do, but apparently you don't understand capital markets quite like the rest of us.
This is just the latest example of how the line between tech entrepreneur and capital markets charlatan can be a very fine one indeed.
But Zuckerberg is insanely rich now (even with the depressed stock price) and that makes him virtually unprosecuteable for securities fraud and so the charade continues.
Will you please join me in welcoming Mark Zuckerberg to the ranks of the illigitimate new American Royalty...
All Hail Lord Zuckerberg and his band of merry men!! LOL
FB is overvalued. I suspect, like others here, that it's worth ~$12/share (and they currently have ~$4/share in cash).
Even if FB's claimed number of actual users is correct, at ~900M (and there's some doubt about that), it still needs to monetize them to make it a worthwhile *investment*. Sure, it may be *fun* for users, but that doesn't necessarily make it a good business.
As to growth, FB has almost saturated the U.S. already. And other countries, particularly the big prizes of India and China, may prefer their own homegrown companies rather than FB (ala Baidu in China rather than Google). Cultural divides like that may be hard for one American company to overcome. And if you reduce overseas growth potential, FB is in even more trouble, of course.
Finally, the analysts' ratings don't impress me at all. Most often they're cheerleaders for any stock. Remember: Those same firms' analysts, in many cases, rated Enron a buy almost until the day it collapsed!
"@BuffJr.. you are #1 on my I told you so list in June 2018 :)...."
This is just hilarious. Who else is on that list? The actual Warren Buffet?
I think FB will be a penny stock by 2018.
Here are my reasons why I believe that FB will be a poor investment over the long run.
1.) Grossly overvalued
2.) Business is a fad
3.) Growth is slowing down significantly
4.) Almost 10% of FB users are just fake accounts
5.) Increasing competition in this industry
6.) FB is trying to expand into other areas by overpaying for acquisitions (this almost never turns out well)
I could keep going on and on, however, I think most people get the point by now. FB is an awful business!
back from the dead... Sorry for not responding. I was not hiding, just working. So I was WAYYY off on my price points and cost myself a decent amount of money. I'm still super long and am still buying shares at almost every 20% dip interval there is. Could kill me in the long run, but I guess thats why they call it investing. I'm invested in FB.... I still hold true to my points in the initial post and will bring two topics to your attention for long term investors........... "Facebook games- good bye ZNGA. They will either get taxed to death, surpassed, or just acquired by FB"... How is ZNGA doing since FB changed their platform? Let me tell you. $7.16 at time of post and $3 now........... Next item.... "Facebook Email platform (connect business life to personal life)"....... did anyone realize FB automatically switched your "preferred" email address to theirs vs hotmail/yahoo/google/work/etc.. This is the beginning of this process. It will take years before people are using facebook email platform, but no doubt its coming. and more importantly its profitable..... I'll continue to monitor and post about their upcoming advancements with apps/cloud services... just wait. Patientently wait...
Captain,
I simply don't get you. There are so many better investments out there, why waste your time with this terrible company?
Even if FB does succeed over the long run, you can make at the most a 200% to 300% return (over a 10 to 20 year time frame, which is not very good). In other words, you will get a tiny return for taking on a huge amount of risk.
Personally, if I wanted to buy a stock with such a huge valuation as FB I would just buy Amazon (which I think most would agree is a much better long term business).
FB is not ever worth the cash on its balance sheet because they will eventually burn through it by overpaying for acquisitions.
follow the wise Ben Graham and try his standards of investing. He would pull his hair out at FB's IPO and so-called "investors" valuing it so high. Let's see a 10-year strong dividend, an EARNED market cap of $2bil +, and some growth stability. FB wants to keep itself breathing by overspending on acquisitions. That's like drowning and desperately reaching for everyone else's floaty to keep you alive.
Facebook is a Myspace copy, only less interesting. And to those who called Myspace gimmicky and claimed FB isn't, well what's more gimmicky than picture stalking and Farmville advertising? Wanna help build my farm? Hey, Zuckerberg, want me to help build you a decent business?
I have already begun to notice that Facebook is not as popular as it once was. Everybody I talk to says they are getting bored of it. This is a business that simply cannot sustain its growth without acquisitions. However, acquisitions ruin most companies and the same thing will happen to Facebook.
You know I would love to invest in the next Microsoft, Apple, Google, Amazon, etc... However, Facebook is simply not that kind of company. It was a nice little fad (lasted a lot longer than I expected), but now people are moving and there will eventually be some new fad. If you were an early investor in Facebook then you made a decent return on your investment. However, most of the early investors have sold their shares (or are in the process of selling them). Investors need to be rational and realize that they should stay far away from this overvalued fad-stock.
Within 2 minutes of Facebook going public, I said in a post that this will be "the most disappointing IPO in history." As it turns out, I couldn't have been more right. The sad thing is it didn't take much skill to realize that this IPO would be a massive failure. Using some common sense is all it takes to avoid most mistakes in investing.
People start buying put options - this is a house of cards that's about to crash hard.
You make good points about the future possibilities, however, all of these things are dependent on one critical thing-- that facebook can hold onto its most valuable asset-- its user base.
Many people don't understand facebook as a business model. They think facebook doesn't produce anything, but that is absolutely wrong. Facebook produces information, extremely valuable information that every business in the world would love to access in order to optimize their marketing strategies. This is where the value of facebook lies. Every time you update your profile, click a like, or do anything on facebook, it generates value for facebook.
However, whether facebook is able to continue to generate this valuable information about consumers across the world is questionable. When considering the future of facebook, just remember this: personal information = value. Next, think about the future trends in how facebook can continue to acquire information. What about future regulations that may limit the ways in which facebook is able to convert this information into profit? Will governments across the world allow facebook to sell this to marketers? Will their users stand for it if their personal information is accessible? Without the ability to sell information, facebook loses their only viable source of revenue.
How is the Technology coming along? GM still will not advertsie on FB five months after there decision to pull ads and FB bottom line is suffering not because techology is not selling but because the likes of GM will not pay them to advertise there.
Too tired to read through all these posts so forgive if this was already mentioned. FB is becoming the default login method for many many commerce sites, meaning you just log in with your FB credentials and either share (or not) your purchase "like" information on your FB feed. A big example is Spotify, but I have come across many of them.
I don't know how to value it, but what if you logged in through FB for 50% of the future commerce sites out there, in other words, they handle customer login and it is more convenient for people to get access vs creating a new login for each site.
I agree with many of the comments about high valuation, but I also feel that you have to give high value that could become the gatekeeper for on line commerce. Not only are they leveraging the collective "us" with our posts, but they are leveraging other companies who need FB to grow.
There are some rumors going around the web that the company just got downgraded again.
"Bernstein Research analyst Carlos Kirjner just launched coverage of Facebook with an Underperform rating and $12.50 price target. He’s projecting the company will earn 14 cents a share in 2013, and 21 cents in 2014."
I have read this in various places around the internet today. I think it was supposed to be published tomorrow or later this week. What I think happened is that it leaked out early. I am surprised the stock is not getting punished yet.
If any of you can locate this article, I think a lot of people would appreciate it (including me).
800 million shares will flood the market tomorrow (11/14/2012). This wont be good for the stock. I can't believe people still believe in this terrible fad company.
It is a great company, but not worth such a high market cap. Their next earnings report will be okay, but all the political ads are gone.