Who is or isn't investing in Facebook (average, stock, buying)

[Teak]

Originally Posted by midlifeman

I'm not shy about talking about my $42 per share investment. It's funny how hindsight suddenly makes everyone so smart. I guess there are two kinds of people in this world, those who judge life based on what has already happened, and those who believe in the future. No one really knows how to evaluate a company like this because it is a first of it's kind (901 million subscribers), but the potential in my opinion is too great to pass up. I was more afraid of not doing something than being on the sidelines. In life you got to play to win. Now that you have the all mighty power of hindsight on your side are you comfortable paying $27 a share?....does that meet your precious P/E ratio or are you going to wait for an analyst to tell you what to do? The same suckers that sold will be the same ones that buy back in once the revenues come rolling in. Be patient my over $40 a share friends!!!!! (Be very patient

Midlifeman! Welcome back.

I don't "wait for an analyst" to tell me what to do. If I had, I would probably have bought shares in FB at >$38! It appears, however, that you bought into the hype.

No, I am not comfortable paying $27/share for FB. The opportunity cost of doing that is very high. That $27 could buy me so much more out there that have better business fundamentals than FB.

That $27 price tag still means the P/E is around 70. Are you willing to wait 70 years for your "investment" in FB to get a payback? I suspect there will be a LOT of change in society in 70 years including the rise of more social networking sites and even newer, different ways of posting photos and daily narratives.

Good luck with FB; you will need it. (Luck, that is.)

[Malloric]

Originally Posted by midlifeman

I'm not shy about talking about my $42 per share investment. It's funny how hindsight suddenly makes everyone so smart. I guess there are two kinds of people in this world, those who judge life based on what has already happened, and those who believe in the future. No one really knows how to evaluate a company like this because it is a first of it's kind (901 million subscribers), but the potential in my opinion is too great to pass up. I was more afraid of not doing something than being on the sidelines. In life you got to play to win. Now that you have the all mighty power of hindsight on your side are you comfortable paying $27 a share?....does that meet your precious P/E ratio or are you going to wait for an analyst to tell you what to do? The same suckers that sold will be the same ones that buy back in once the revenues come rolling in. Be patient my over $40 a share friends!!!!! (Be very patient

No offense, but you're the walking example of what every investor does, even the good ones. They cut their winners short and get out with some profit and let the losers run too long rationalizing why their holding it. If I were to have bought FB at $42, I would have been out by $36, NASDAQ snafu aside. If Facebook somehow turns around and starts making some money to justify it's price, maybe I'll buy some. Maybe I'll buy it over $42 a share even. I highly doubt it, but you never know.

[midlifeman]

It all depends on your time horizon. To say the investment is a loser today is easy, (remember hindsight). Granted i did follow the herd, but not because I was influenced by the herd. I truly believe that this is going to be a great company. I would only sell the stock if there was a hacking scandal or something internal that could devastate the credibility of the company. I don't sell based on external forces like a Nasdaq screw up or a European debacle. Remember when everyone was scared and sold their stocks back in 08/09?
I'm glad I didn't sell then. Holding on takes as much guts as selling for a loss.

[Teak]

Originally Posted by midlifeman

Remember when everyone was scared and sold their stocks back in 08/09?
I'm glad I didn't sell then. Holding on takes as much guts as selling for a loss.

Good! I did not sell anything in 08/09 either and, in fact, added to several of my positions at lower prices.

But, FB? I just went a week without checking out FB, but I did buy pastries and hot chocolate (Starbucks), gasoline (CVX, XOM), slept in a motel (take your pick), and ate cereal (DE, ADM, BG, etc.). I can go without FB in my life, I figure, but there are many things out there more essential than FB.

Still not seeing where their revenue is going to come from. They need to grow something like 50% a year for several more years to realise enough earnings to justify that $42/share stock price in the future.

[treasurekidd]

no one really knows how to evaluate a company like this because it is a first of it's kind (901 million subscribers), but the potential in my opinion is too great to pass up.

No offense, but I DO know how to properly value this company. Any potential stock investment should be judged on two basic factors - earnings and/or growth potential. Facebook's earnings in no way justify even it's current $27 and change share price, and IMO, it doesn't have nearly the growth potential that so many folks think it has. In fact, I think it's user base has peaked, or is at least close to peak. My own teen daughters, who several years ago begged my to let them open Facebook accounts, now view FB as passe, and use it very little, favoring Twitter instead now. Is it the next Myspace? Who knows? But I believe it has peaked in popularity, and will never be able to duplicate it's past growth or increase it's earnings enough to recover back to $42 per share. IMO, a fair price per share for Facebook, taking it's current .40 cent per share earnings and factoring in it's growth with a 30 P/E (which is actually STILL too high in my book), you get a per share price of $12, and discounting it's earnings with a 20% margin of safety, you get a buy price of $9.60 per share. That's how I would value it, and if I were looking to buy it (which I'm not) I wouldn't pay more than $9.60 per share. Again, all IMO, and it's not an opinion formed with the benefit of hindsight. If you go back and read this thread, my opinion has been the same since long before the IPO. With that said, good luck with your investment.

[howard555]

I got some at the IPO price. My 30 day restriction is up tomorrow, so I've sold the "weekly" $31.00 call option.
If my shares get called away, no big deal. It was only 100 shares.
I'll lose $700 on it, or the option can be rolled out.
It does cancel out some of the small gains, I had on a few other IPO's.
I'd thought FB would have been the best one, after 30 days, but it was not.

[chrisBlooking]

I took a screen shot of the IPO price. I will show it to my grand kids and explain to them there was a company called Facebook.

[Teak]

Originally Posted by chrisBlooking

I took a screen shot of the IPO price. I will show it to my grand kids and explain to them there was a company called Facebook.

You realise, I hope; that your grandchildren probably won't believe you. You can use the FB example to explain the Greater Fool Theory.

[Teak]

Got to bring this thread back to life now that the IPO lockup period has ended. Thursday's close was $19.87, or nearly 50% lower than its $38 IPO price, and >50% for the $42 that some zuckers paid.

You were warned.

Learn from this.

Consider it tuition paid in The Hard Knock School of Investing.

I have paid similar tuition, but not for FB. I learned my lessons.

[midlifeman]

Hold on for the continued upswing with this stock. It's going to be a fun ride. Can you smell it?........it's the smell of money