The Toybox

people for the conservation of limited amounts of indignation


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okay, so the facebook thing was weird, right?
children of dune - leto 1
seperis
Today was supposed to be amazing and I'm irritable, as I have three financial hobbies; shopping for computer equipment, buying stock, and entertaining myself on slow days reading financial blogs that predict doom, doom, and doom. I had live quotes on. I was very excited about this because honestly, Facebook causes me nothing but stress and I feel it owed me an exciting day of watching people go insane over a site where you can read about other people's toenail clippings and recent convenience store robberies.

However, dude, Facebook was supposed to be like, epic - it was supposed to IPO and then immediately leap to the highest possible price (estimates $54 to $68) and also distract us from that pesky issue with the Euro and the entire country of Greece. The financial sector carried on with near-orgasmic bliss at the the third-largest IPO in U.S. history (sometimes they bolded that as well!). It also was supposed to break the market or something (there are like, graphs and everything). Definitely it was supposed to do something, make millionaires, end civilization, something

Short version of events:

IPO: $38
Opening: $42.05 (twenty minutes late, btw, thanks NASDAQ for driving us all crazy hitting refresh until our fingers hurt)
High: $45
Current: $40.01 (1:54 PM CST: Google Finance)

It also caused Zynga (creators of Farmville) to spiral hard enough to call a halt to trading here, which is weird, you'd think, the company that went public and became valuable due to its relationship with Facebook having a death spiral that again, made them call a halt to trading.

And in case you're curious, the Down, NASDAQ, and S&P 500 are all in a downward skid as well.

I've been trading since the glorious economic death spiral of 2008 since I feel as if the economy is going to make me lose money anyway, I should have the fun of losing it myself. However, this is the first time I canceled a trade (within an hour of making it) and then called my mom to cancel hes because I couldn't remember her login.

Anyone know more specifically about the market that has any theories? I've done enough reading to kind of guess at a couple of the reasons this went wrong, but I'm still honestly shocked that Facebook, the freaking social media IPO grail, failed to garner mass amounts of idiotic market hysteria and become bloated and overpriced while short sellers made fortunes.

Yahoo headlines tracks the entire slow, boring journey. I feel betrayed.

Posted at Dreamwidth: http://seperis.dreamwidth.org/937516.html. | You can reply here or there. | comment count unavailable comments

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Most of the financial analysts on NPR that I've heard had deep misgivings about Facebook's ability to make the kind of profits that would justify the higher share price. Old fashioned, I know, but maybe they learned something from the last tech bubble? IDEK.

Everything I read in the industry press seemed to think that FB was valued pretty fairly at its IPO price; it's been trading privately at $40-$44 a share for a long while now on SecondMarket. The big corporate investors haven't bought in today because they don't see a deal, and many individual investors are too bitter/jealous about FB to buy in on the first day. Personally, I don't think FB is a day trade stock; it's a long haul stock as it figures out what it can do with the massive amounts of personal information and millions of eyes it gathers each day. It has a lot to monetize that it hasn't sorted out yet.

Anyway, FB seems to be doing today exactly what everything I read said it would. It hasn't crashed (as of my last peek at the market), but it hasn't gone insane.

Zynga is such a wonky stock. I know some people love them, but they're so tied in with FB that it's hard for me to get a read on them.

I have no idea about stocks and all, but I've been very skeptical about the whole thing from the beginning anyway. Basically because I have absolutely no idea what Facebook is even trying to sell and why it should be worth all that money.

The only thing they do have to sell is the personal data of people with Facebook accounts, and considering Europe especially is very, very harsh when it comes to privacy laws... There have been several lawsuits just in Germany for privacy law violations against Facebook, and there's more to come, most probably from the European Union as a whole. So if Facebook can't even start selling their user data, what can they do?

I suppose I'm not the only one thinking that way, which is why the IPO is not going the way a lot of people expected.



Edited at 2012-05-18 07:14 pm (UTC)

Dude, it got $16 b, and that's a lot to invest. Enough to buy commodity stocks (play safe) like Apple, or break into China (gamble). Fairly priced. 3 months from now, the flood gates open and that's when you and I buy in at $25, and hope Z doesn't get bored and kick off into the sunset(thus dropping it to $15).

From a Silicon Valley POV

(Anonymous)
I thought everyone knew FB was a bad bet: for the past few months, rumors have been circulating everywhere in the Bay Area, and lately have even made the official media?

For instance:
http://www.guardian.co.uk/technology/blog/2012/may/16/facebook-ipo-reasons-not-to-buy

Even more interesting:
http://www.guardian.co.uk/commentisfree/cifamerica/2012/may/16/facebook-ipo-commentary-analysis-web

Even the comments are very perceptive and raise very interesting points that rarely get mentioned in the US media:
http://www.guardian.co.uk/discussion/comment-permalink/16162632
http://www.guardian.co.uk/discussion/comment-permalink/16166463

Please tell me you did not put any significant amount in this and that your disappointment is only philosophical?

Re: From a Silicon Valley POV

Oh no. I gave it an hour and decided against it. It was very philosophical.

I thought everyone knew FB was a bad bet: for the past few months, rumors have been circulating everywhere in the Bay Area, and lately have even made the official media?

Yes, a bad bet, but in a way, that was part of the reason I expected more drama because of the build up and perception, not actual quality.

Re: From a Silicon Valley POV

(Anonymous)
It was very philosophical.

:)

OK, I am very relieved you have not hazarded your own cash, because this IPO had all the earmarks of the classic 'fleece the public by selling them junk' cliche.

I am surprised anyone thinks $38 is a fair price becuase the secondary market was higher. It's horribly overvalued since FB does not have a business model per se and no idea on how to monetize their user base yet -assuming that is even possible- so that price is likely to drop further fairly quickly: not that MZ cares since he has what he wanted... billions of cash with no accountability. And all the other big players have also made tons of money.

The retail investors on the other hand (apparently this is a PC euphemism used instead of 'the public' or what was the phrase MZ used back then? 'The dumb fucks', I believe?) seem to have not learned a thing from the past: it looks very likely that that FB will be a one-company dot.com bubble just by themselves.

Call me cynical and of course I could be wrong, but I suspect that FB are just the next AOL or MySpace.

that was part of the reason I expected more drama because of the build up and perception, not actual quality.

Your point is well-taken and I am afraid it is just one more example of how untrustworthy the media are: they do love sensationalizing a story even if it comes at the cost of reporting actual facts and misleading the innocent public.

Not to mention all the financial analysts out there... I used to be one myself, so I can tell that kind of BS from a mile off.

Re: From a Silicon Valley POV

(Anonymous)
The funniest thing I saw Friday, from http://twitter.com/#!/grossdm/status/203514078805757953:

"Twitterverse momentarily struck dumb by actual evidence of efficiency in capital markets"

Re: From a Silicon Valley POV

...that may be the most perfect summary of the situation ever.

I think the reason it didn't become 'overvalued' is because it already is vastly overvalued, according to most analysts. They're losing money because people are using mobile more and more and there aren't any ads there, and they've outright admitted that they're not really sure how they're going to make money. It could pay off, but until they establish a set way to profit, it's going to be uneven.

The value or not wasn't what I was watching for. But historically, the market loves overhypped things, so more price bouncing was expected than what happened. It was near flatline.

I don't know anything about anything, but the Spanish banks downgrade, and Greece/Eurozone situation seem to be affecting markets everywhere, so maybe it's a timing thing, too. Facebook would have had to buck a significant worldwide downward trend to do well today, and maybe it's a risky enough buy to not be able to manage that.

What you said. With a major currency on the brink of collapse, the markets are nervy in general.

I have no idea about the economics of the matter, but I'm not really surprised it didn't make a gazillion dollars on the first day.

I didn't think it'd make a gazillion dollars. But I did think the price would bounce a lot more than it did, but it was near flatline.

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