Topic: Facebook IPO

[warpmine]

I guess I'm clueless on this kind of trading. What, EXACTLY, was the draw to facebook, anyway? Just advertising revenue?

Good query. Facebook doesn't charge for membership which would have helped shed those bogus accounts and most people on it use it in a manner that is true to form for leaches that want everything for free.

Basically, it's a steaming pile with suitability for blabbermouths.

[Alphabet Soup]

They must be data mining. Leeching off of the people who are leeching off of them.

[trapeze]

Well, I guess it's time for another Facebook posting. Why? I'm glad you asked. Facebook has just hit a new closing low.

Yay.

Facebook closed today at $17.73 which, curiously, some people apparently saw as a "bargain" and it has since risen to $18.08 in after hours trading. Go figure. Not that it matters. Facebook has only experienced the first of several "lockup releases" a couple of weeks back and it only represented 10% of total shares. There is another 9% coming in mid October but the real bomb is going to hit in mid November when 1.3 BILLION shares will become eligible for selling. That's 49% of outstanding shares. And then, since there's just never enough Facebook shares on the market, there are more to come after that.

So, we are nearly where I thought that the price of Facebook stock would begin to look reasonable. The only problem is that as these huge blocks of company stock begin to reach eligibility for sale the company begins to looks overpriced. It's like hyper inflation. Put a few hundred million more shares on the market and...shazam!...the price looks too high. Who would have thought, eh?

And there will be a huge incentive for the owners of these blocks of stocks to sell quickly and to sell it all. After all, they have been watching their "fortune" shrink steadily for many, many weeks now. They have every reason to believe that the price will continue to go down so it is in their best interests to cash in for whatever they can get now rather than wait for it to go down even lower in price. In other words, this is a self perpetuating nightmare for Facebook. It's like a runaway train heading for a cliff and no one is anywhere near the brake lever which would certainly snap off if it could even be pulled.

So...I have stated earlier that the price could bottom at $7 or $8 a share. I am now thinking that that price is perhaps too optimistic for Facebook. I am now thinking that $4 a share might be the bottom. I think that it is within the realm of possibility that the price could be at $11 or $12 by the end of this year with the true bottom being reached sometime in the spring of 2013.

The Winkelvoss' got $20 million in cash and 1.25 million shares in their settlement. I have no idea if and/or when they might have sold them. It would really suck if they are in one of these lockups and are watching their fortune vanish before their eyes, helpless to do anything about it.


One thing is pretty much for certain, though...no one has gone broke yet shorting Facebook. That's the only place for money to be made. Sad.

[Libertas]

The Zuck says he'll stop selling, I guess he has been contributing to his own demise.

 

[trapeze]

Zuckerberg speaks. Says "whatever."

SAN FRANCISCO — Facebook CEO Mark Zuckerberg hasn’t enjoyed watching his company’s stock price plunge this summer, but he is relishing the opportunity prove his critics on Wall Street wrong.

“I would rather be in a cycle where people underestimate us,” Zuckerberg said Tuesday. “I think it gives us the latitude to go out and make some big bets.”

Zuckerberg, 28, spoke to a standing-room-only audience at a tech conference in San Francisco in his first interview since Facebook Inc.’s rocky initial public offering in May. The social networking leader’s stock has lost nearly half its value since the IPO, lopping more than $50 billion from Facebook’s market value.

Zuckerberg said the drop “has obviously been disappointing,” but he said it’s a great time to “double down” on the company’s future.

“Facebook has not been an uncontroversial company,” Zuckerberg said. “It’s not like this is the first up and down we have ever had.”

[Libertas]

Huh, what's that he said?   

He could have belched or grunted and walked away...same diff...