Facebook IPO

[Grieve]

They are filing IPO papers on Wednesday, according to the WSJ. Anyone going to roll the dice on that one? $75-100 BILLION valuation!

I wonder if it might have peaked, the way MySpace did a few years ago. Getting a bit long in the tooth now...I think people could easily jump ship and move to the next big thing (might not be Google+, but something will come along...)

[Slamz]

Yeah I dunno.

I do think there's an urge among the populace to flee Facebook and I feel like its popularity has already waned since the peak. Seems like most people hate their new "Timeline" layout and it's about to become mandatory -- Facebook was never big on customization options.

But then again, short of a devastating solar flare, online social networking isn't going away. Google hasn't seemed overly interested in pursuing it. MySpace dug in as a social media site dedicated to music ("Social Entertainment") and I doubt they're going anywhere much further than that. Facebook still probably has the best position moving forward. Unless some new giant rises up out of Asia, I can't imagine who is going to knock Facebook out.

And maybe the money generated by the IPO will let them overhaul and solidify their position as "social networking champion" and this could be the stock we all regret not buying 10 years from now.


Probably the #1 reason it's sketchy, though, is that I detect no brand loyalty to Facebook. If a new competitor DID rise up, it's easy to see Facebook going from king to shit almost literally overnight. You might never see it coming. A big hardware company like IBM isn't going to die overnight but a social networking site could.

[Vanraw]

The thing that Facebook has that MySpace never had, is a wide spectrum of users. Meaning all ages. The thing that places like Google+ are missing is a hook or migration without losing the connections.

However Facebook has become tedious and an advertising mecca. I think if someone came up with a hook, customers would flood away. I just can't imagine the hook right now. Of course people used to say that about aol mail, and IM.

I think the IPO is going to do well.

[Breand]

Social networking has changed rapidly over the past decade. What really, new innovative thing has Facebook done since it's established it's dominance? How many times have they pissed off their customers with arbitrary changes and security issues, with all the sketchy data mining thrown in? Facebook is now at a point where it is bad business to be innovative. It has already devolved into a link and game fest, as most people use Twitter for personal updates and messages.

The second someone else revolutionizes social networking people will be running for the exits.

The IPO will do just fine. Long term Facebook has no chance, unless we see something soon that restores faith in their product.

[Vanraw]

Yea aree with the de-evolution of innovation. However, on the long term it will depend what they do with the hoards of capital cash. They may go on a buying spree.

Long term goals, facebook would like to be the next netflix. They would also like to be the next evolution of social networking medium king, with video.

If they spend the millions right, they will be as big as Google. In fact, Google is the model they should be following. Will They? Is the question.

[Grieve]

Well, I got sucked in. Etrade gave me the option to buy into the IPO, and I'm going to roll the dice. Probably sell the same day (if it spikes), though. Most IPOs end the day lower than they started, but if any is going to buck the trend it's this one...

[Breand]

I hear ya, if I had access Id do the same. has the makings of a great same day sale written all over it. I still think it is doomed.

[Grieve]

It looks like anyone with an Etrade account is getting the option to buy in, but you are not guarenteed to get what you ask for. You say how many shares you are willing to buy, and the max price you'll pay (I said $40, but the upper range is currently $35), and you have to have that much money available in your account (IRA account, in my case). Then, depending on demand, you are guaranteed to get "some" amount of shares, but probably not as many as you asked for.

Usually retail investors don't get a shot at the IPO like this, but apparently Facebook see themselves as a company "of the people", and so opened up 20% of their IPO shares outside of the regular suspects (where you normally need to invest at least $1m to get a shot).

[Grieve]

Ah, the latest I've heard is that you are not likely to get any allocation of FB shares unless you have $200,000 plus in your account at the retail brokerages (like Etrade and Fidelity). I don't, so I'm probably out of luck. Still, I have orders in for about 1300 shares at $40 (because the price may go up again), in case they throw me a bone...

[Grieve]

Well, that did throw me a bone...I got 150 shares, out of 1300 requested. :roll: I guess it's better than nothing...

[Vanraw]

nice. I really contemplated it, but decided there was to much negative discussion on growth. It will probably do well. Did you get them at 40 or 38?

[Jakensama]

I am of the mindset it is hugely overvalued. It might bump up in the very short term (days, a week?), but can't see much viable after that.. How long are you going to hold those before dumping it?

[Breand]

I'm amazed the lemmings aren't driving the price up more....perhaps too many new millionaires trying to sell on opening day? It certainly seems like they did a good job of pricing it correctly for the market.

[Grieve]

Ha, yeah, what a bust. The LinkedIn IPO tripled the first day, and I thought FB would do at least that well, with the excitement around it and the fact that almost everyone seems to use it. I think opening the IPO shares to the dirty masses (like me) actually contributed to the problem - because most people who wanted shares were able to get at least some, there were less buyers today than otherwise.

I already sold most of them mid-afternoon, since I don't think FB is going to last in the long term. I kept in few in both IRA accounts, just in case they do become the next Google or Apple. That way I can be one of those annoyingly smug people telling you that they have IPO Apple shares they bought for 10 bucks. I'd already kind of lost interest when I only got a fraction of the shares I asked for, and now I'm glad I didn't get more. Tomorrow is the first time it will really be possible to short the stock (no shares to borrow today), so it will be interesting to see what happens...

[Vanraw]

They kept increasing the value, and for the most part, hit the right valuation. But the press was very mixed. Mostly talking about the lack of future growth. Honestly I think they may have some great growth potential. Allot of people were saying the same thing about google early on.

Here are the open questions.

Can they get into China?
How will they react to privacy issues?
How will they spend the capital they just made.

What they buy is what will define how well they will do. Same thing as what defined google.

The biggest question is if users leave. Is that a possibility.

[Jakensama]

No way in hell they get into China. The state doesn't want the chinese people connected to that many foreigners and they want to protect the inhouse china competition.

[Slamz]

I am curious to see what the plan is. Nothing Facebook has done since they opened has been remotely impressive.

It might be cool if they turned into more of a mixed-media site. Technically they support uploading videos but almost nobody uses that. It's sort of an out-of-the-way feature. There's probably some risk of muddying the water if they try to diversify too much, too. I think that was part of MySpace's problem. It's a social network! It's a blog! It's music! It's videos! It's a shitty interface with bad privacy and too many way to fuck up your account so everyone switches to Facebook, which is simpler!

Even as it stands, there's grumblings against Facebook, mostly over their pretty confusing privacy settings.

A social media site with a better interface could potentially take over. There was lots of hope that Google Plus would do it but their interface wasn't that great either and nobody really switched to it.

[Grieve]

The best thing they did was opening up their APIs to game developers. A lot of regular folks (including my wife) got addicted to Scrabble, Bejeweled, Wheel of Fortune, etc. Problem is that all those games are on everyone's phone now.

Zuckerberg is a smart guy - I wouldn't bet against him coming up with new ideas to keep FaceBook relevant, But I don't have enough confidence in him to bet on the company long term.

[Vanraw]

No way in hell they get into China. The state doesn't want the chinese people connected to that many foreigners and they want to protect the inhouse china competition.

I'm not so sure. Keep in mind that when they started, it was college based, and one college could not talk to the others. Would face book be willing to create an autonomous China only face book?

[Jakensama]

I am curious to see what the plan is. Nothing Facebook has done since they opened has been remotely impressive.

I don't know - while I find a lot of facebook insipid, I think getting over a 10th of the worlds population in userbase qualifies as "remotely impressive".

I don't see facebook as going the way of myspace anytime soon, just because it is hard to make people switch social messaging networks and when you have almost everyone, it is even more difficult. Hell, I think Google plus is leaps and bounds a better social networking site, but why bother using it if 95% of the people you interact with are on facebook?

[Jakensama]

I'm not so sure. Keep in mind that when they started, it was college based, and one college could not talk to the others. Would face book be willing to create an autonomous China only face book?

It has nothing to do with facebook's ingenuity and everything to do with chinese policy. Having their local players helps their government and allows them to keep their thumb on those players much easier. Operating as a foreign company in china is always an uphill battle... Impossible? No, but unlikely? Highly. Thats part of the hesitance on the IPO - their future growth is limited, and that market is one most experts rate as a pretty low chance.

Even Grieve's cult is going to have problems dominating that particular market under this government, and they have a lot better shot than facebook.

[Vanraw]

A social media site with a better interface could potentially take over. There was lots of hope that Google Plus would do it but their interface wasn't that great either and nobody really switched to it.

This is a sticky glue issue. The reason google plus failed is more about the fact that 900million people are on Facebook and not google plus. Unless Facebook pulls an AOL, the customer base that is using Facebook to share info is what will prevent successful competition for some time.

The thing that Facebook has right now that it didn't have last week, is 108 billion in market capital. From an ipo perspective, this was very successful.

The question is what will they do with it.

[Slamz]

I don't know - while I find a lot of facebook insipid, I think getting over a 10th of the worlds population in userbase qualifies as "remotely impressive".

I was talking about features. If anything, their privacy settings -- one of people's chief concerns -- has been getting more confusing and complicated over time.

The games are a draw, but as Grieve mentioned, you don't really need Facebook games when everything is moving to portable apps.

Definitely interested in seeing what they go for with all this money. Maybe they could buy Hulu or something and more strongly integrate video? I dunno what the next sensible move would be for a company like Facebook. The risk, I think, is they get muddy by picking a silly direction to expand in ("The Facebook music store!") and it becomes an ugly mishmash. Like Myspace.

[Vanraw]

Definitely interested in seeing what they go for with all this money. Maybe they could buy Hulu or something and more strongly integrate video? I dunno what the next sensible move would be for a company like Facebook. The risk, I think, is they get muddy by picking a silly direction to expand in ("The Facebook music store!") and it becomes an ugly mishmash. Like Myspace.

yea, I would call that an AOL move.... AOL being the company that owned dialup internet access, email, and IM for the USA prior to broadband. Three fact that they lost it all is one of the greatest examples of leadership failure in business history.


Buying hulu or Netflix would be interesting, though there is the VPPA to contend with.

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[Slamz]

Ooo, neat. I'd have to look it up but I imagine it's an example of a law with a good basis (privacy protections) being worded overly zealously (given the lawsuits, I guess "opt-in" is not an option, which is dumb).

That explains why movie watching isn't more of a community event. Certainly takes care of what I thought would be the next most obvious direction to take social media. (Social sharing of what movie you watched and if you liked it or not is at least of SOME interest, unlike most of what people post about.)


That's the real problem social media faces, though -- privacy concerns. People have to opt-in and then security needs to be good. If they don't opt-in then it's not going to be very interesting and if they don't trust it, they won't opt-in. "Super Sad True Love Story" poked a lot of fun at the future of social media, but really, privacy concerns may prevent it from ever being as big a part of our lives as it was in that book. Virtually everything they did would be considered an awful violation of privacy today.

Basically I have my doubts about the future of social media, specifically its ability to expand in sensible ways, or even stay as a trusted, interesting, long term feature in people's lives. I like Facebook for the ability to keep in touch with some people but for the most part I wouldn't miss it if it went away. I certainly wouldn't pay for it as a service.