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It was a great idea- when it was simple- a person's face- their real name..Like a telephone directory book of old but more detailed----Then something happened ...the face book people started to tweak things- weird patterns started showing up- Pages of inspirational "sayings" - that were not there before- It's as if all the garbage appeared in one month---If it is not broken- don't fix it- They broke it...could have been greed that destroyed the idea.
It was massivly overpriced. The $38 a share was to allow the initial investors to cash out and pocket as much as possible. Most IPO's fall within days of its offering which is why they dont allow shorting to take place.
This exactly. Facebook clearly doesn't have the revenue stream - or obvious path to monetization - to justify the price and the drop was utterly unsurprising.
What I don't understand is why this is considered a failure. If the point of going public is to get as much money as possible for the people selling, it was a smashing success. The traditional view where a 'successful' IPO is one where the people who built the company forgo some of their potential profit so friends of the underwriting bankers who get in on sweetheart deals can make a buck has never made sense to me, except from the POV of the relevant bankers and their pseudo-insider-trading friends.
Are you saying Facebook doesn't sell anything? How does it make money then?
They essentially get commissions from other companies that sell thngs.. Things like games, where you buy credits.. At $100B book value, they'd need to be generating somethinig like $1B a month profit to even come close, and I dont think they are.
This exactly. Facebook clearly doesn't have the revenue stream - or obvious path to monetization - to justify the price and the drop was utterly unsurprising.
What I don't understand is why this is considered a failure. If the point of going public is to get as much money as possible for the people selling, it was a smashing success. The traditional view where a 'successful' IPO is one where the people who built the company forgo some of their potential profit so friends of the underwriting bankers who get in on sweetheart deals can make a buck has never made sense to me, except from the POV of the relevant bankers and their pseudo-insider-trading friends.
Well Facebook IPO was considered to be something like Google, where it would go up, and if you bought it at $38, time would justify the cost. That might be true, but I cant imagine it. At some point they are probably going to do a reverse split to have to pump the stock price back up.
They essentially get commissions from other companies that sell thngs.. Things like games, where you buy credits.. At $100B book value, they'd need to be generating somethinig like $1B a month profit to even come close, and I dont think they are.
Interesting, I'm not familiar with their business model.
Interesting, I'm not familiar with their business model.
Its a very interesting business model, very similar to what used to be banner advertisement placements, but like banner advertisements have been phased out, I suspect facebook will as well.
That's not surprising, what exactly does Facebook produce? When was last you went to the store and bought a Facebook product. Has anybody ever seen a facebook factory?
Its a very interesting business model, very similar to what used to be banner advertisement placements, but like banner advertisements have been phased out, I suspect facebook will as well.
That is an interesting comparison. I still wonder generally about the effectiveness of internet ads. I feel like I have just learned to tune them out and have never clicked on one on purpose.
I also wonder if Zuckerberg is in it for the long haul or if he will just take the money and run. He has to know that the long term viability of Facebook is limited.
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