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  1. #1
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    Who's Buying FB IPO?

    By the time many of you read this, especially you East Coast'ers, one of the largest IPO openings in history will have opened on Wall Street. I'm far far off from knowing anything at all about stocks or investing (We know our mtb's certainly don't qualify), but this IPO has many mixed reviews. Some say yes, some no. Actually its seems more say no from what I've been reading. Why?

    I mean, they don't sell a product like Apple. They don't offer a service, like Google. Both of these were good sellers at their IPO and have made many people a good return on their investment, especiallly if they bought at the IPO price. Shucks. I still remember thinking of buying Google. At that time, it was about $85/share. Now it's a staggering $585. Nearly a 700% increase. "If only..." is all I can say now. I also remember saying,"They dont' sell a product, how can they make money." Now I'm kicking myself. I'd hate to pass this up again with FB's potential, even if they dont have a product or service.

    Who's buying?
    We Ride In God's Country!

  2. #2
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    Quote Originally Posted by myitch View Post
    . I'm far far off from knowing anything at all about stocks or investing (We know our mtb's certainly don't qualify)
    There is your answer, do you like to gamble because thats what it is.

  3. #3
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    Its my opinion that their IPO is grossly overvalued and that people will be burned. Ridiculous E/P ratio, and the revenue growth rate needed to substantiate their IPO will be extremely hard to achieve in the coming years off ads alone, particularly when recent trends show that their growth is slowing. I think it's also telling that major Facebook shareholder Goldman Sachs is using this as an opportunity to sell off more than half of their shares.

    {Disclaimer: If you construe this as financial advice you are an idiot }
    Last edited by wbmason55; 05-18-2012 at 05:57 AM.

  4. #4
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    I think anyone that plays the stock market is just playing a subsidized version of vegas, with men in expensive suits.

  5. #5
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    Quote Originally Posted by big terry View Post
    I think anyone that plays the stock market is just playing a subsidized version of vegas, with men in expensive suits.
    I work in the financial industry and I am a man in those expensive suits. However, I am not licensed in securities. I work in insurance, catastrophic illness and estate planning.

    Stocks/investments are fine - the problem is people heavily rely on them for their financial portfolio. Among my clients, their idea of a "diversified portfolio" means diversification of stock investments, and that's not what that necessarily means. I always refer to the old school "investment pyramid" to help people understand. Stocks, even conservative ones, are placed in the upper-middle to high area of the investment pyramid. If somebody does not lay a foundation under that, their risk for a failed plan increases incredibly.

    Here's a good example: Back in 2005, I had a TON of clients who felt they didn't need life insurance due to their ridiculous view of "self insuring" with real estate investments. Real estate investing is pretty high on the investment pyramid. I advised to basically "not put all their eggs in one basket", and to consider cash value insurance, fixed annuities, and basic cash savings to build their "base" for retirement. This stuff is all very conservative, but offer guaranteed returns - so if the economy takes a dump, they have a base to work with and they don't lose everything they have. Many didn't listen to me.

    Fast forward a few years later - most of them lost those properties, and their real estate plan went to hell. Many of them tell me now, "I should've listened to you", and now dumping money into those things I mentioned above. It's sad, because many were yanking their IRA's and 401K's, paying the insane taxes (plus the 10% 59 1/2 penalty) and investing in real estate. They took all their life savings and tossed it into the lottery.

    Anything without a foundation will crumble, and this is what happened to many Americans during the poor economy. Conversely, those who I know who have a true diversified portfolio did fine. All those cash value insurances, fixed annuities, cash, conservative bonds, etc. sustained.

    I think FB's IPO is a little late, and I don't know where they can go from here. Unlike Google, who is constantly improving their products, FB pretty much has one - social networking. Currently they are on top of the heap, but so was MySpace at one time. Personally, I'd take a conservative approach with FB and see how it does in the next couple of years. As far as being the stock market millionaire, I guess you have to be in the position to be able to lose big. Most people are not in that position, and if they think they are, they are fooling themselves. Just like the people I know who thought they were big shot real estate moguls.

  6. #6
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    Quote Originally Posted by Dion View Post
    I think FB's IPO is a little late, and I don't know where they can go from here.
    ^This. An analyst I recently heard gave the analogy: You're not getting in on the ground floor of a fast-growing company, you're getting in on the 86th floor of a decent-growing company."

  7. #7
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    Eh I dumped a little moola into it. However the one rule I set for myself is simple. Think of it as that same as going to a casino and playing poker, blackjack, whatever. Only invest what you're comfortable losing. Especially with something like this.

    Hey the way I see it at least Zuckerberg is the one wearing the hoodie when the robbery takes place..

    Tails

  8. #8
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    Quote Originally Posted by wbmason55 View Post
    ^This. An analyst I recently heard gave the analogy: You're not getting in on the ground floor of a fast-growing company, you're getting in on the 86th floor of a decent-growing company."
    This was my first impression when I heard this. I think an IPO, say, 5 years ago, would've been something, especially if somebody could get in cheap, early. I don't foresee this getting to the Apple or Google stock level. These companies are doing things on both the software and hardware side of things, and will continue to grow.

    What does FB sell? Advertising? Is there going to be a Facebook smartphone? I don't think so.

    I'll invest in MTBR!

  9. #9
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    All good points boys. Keep em coming. Its now 815 PST and FB has not opened yet......drumroll.

    That really makes sense that FB already seems to be opening when they're on their high, like maybe they've peaked or at near the top of their game vs. just starting out like when Google opened. And w/o a viable service or product, where else are they going? Hmm, maybe I better reconsider.
    We Ride In God's Country!

  10. #10
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    I'm certainly no financial guru (far from it!) but I have been managing my own retirement funds for some years. I have had some winners and a couple of major blow it's. I try to learn from my mistakes.

    I view FB as a highly speculative investment. If I were investing in it I would place a Sell Order (GTC) with a modest profit margin built in right after buying it. Nobody has a crystal ball. Maybe it will kick butt but I if had to guess, it will climb rapidly early on and drop back down later.

    I have done best with boring stocks. ‘Stocks with long-term price potential’ and ‘stocks with above-average dividend yields’. The div'y stock might not go up but the dividend gains can beat the market and most certainly the current interest rate without high risk.

  11. #11
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    If I could have gotten in at the IPO and sold at the end of the day with something like $20000 I would have considered it but the capital gains would have been a ***** and I really don't want to take these stocks as a long term investment because this company as a whole is overvalued IMO.
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  12. #12
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    Doesn't look good so far.....


  13. #13
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    Yeah, it seems most of the opinions here and elsewhere are - . In fact no one I know of personally is buying these FB. And more than one of my friends or research says to buy Dividends. Maybe I'll go that route as well.

    That said, I bought a very few shares of FB just to try it out and a larger amount at a limit. We'll see what transpires by closing bell.
    We Ride In God's Country!

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  15. #15
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    Interesting blog here: The Only Way Facebook Can Justify Its Valuation - Technology Review

    Here's the first sentence: "Farhad Manjoo has pointed out that for Facebook to maintain its share price, it needs to figure out how to increase its revenue by a factor of ten."

  16. #16
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    Here's the new question? Is it good that Facebook stay close to it's opening price? I think it was because it isn't creating a bubble. I think there is definitely some growth to be seen in developing countries, but not much for developed ones. I think it will just be an average stock with more risk, so I am sitting by eating popcorn watching it. If it got cheap I might buy though.

  17. #17
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    I am not a licensed financial advisor, but I did work in the tech industry and successfully traded major tech stocks and IPOs.

    My thoughts? Ain't gonna touch it, except to short the hell out of it when the lockups expire in a couple months or so. After the IPO but before the lockups expire there's a lot of games getting played by insiders and large industry investors to prop up the share price or otherwise game the system for as much money as they can before unloading the shares onto the bagholders.

    The problem with FB is they're pretty close to market saturation and more importantly, they're pissing off an increasing number of users each time they dick with their user interface. At some point there will be an exodus of users to the next social network site, whatever it may be, at which point FB is screwed. All they can do for revenue from then on is mine the crap out of their database and/or sell it to the highest bidders.

  18. #18
    The White Jeff W
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    Currently they are on top of the heap, but so was MySpace at one time.
    I know nothing of investing but that was my thought as well. when the next big thing comes along Facebook with be a footnote in internet history
    No moss...

  19. #19
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    This is great discussion.

    So far no one I know has or plans to buy. Echoing everybody's thoughts here. And many say Dividends are better than stocks. Any opinions on Dividends?
    We Ride In God's Country!

  20. #20
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    I have to say, getting investing advice off a mountain bike forum is only slightly better than listening to your buddies uncle that knows stuff like this.... Lol

  21. #21
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    Quote Originally Posted by myitch View Post
    Any opinions on Dividends?
    One option-

    Go to the local library and ask for Value Line Selections & Opinions. They have a pretty solid list. Their portfolios have a very good track record on performance. I stick to the conservative portfolios – 3 & 4. These will not shake the earth but have beaten the market year after year.

    In parallel, I tried to run the aggressive portfolios and gave up. You have to watch those like a hawk and I have a business to run…..

  22. #22
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    Facebook took a Faceplant.

  23. #23
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    Quote Originally Posted by Tripower View Post
    Facebook took a Faceplant.
    lol

  24. #24
    REALLY?
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    Wallstreet = Legitimised con artists in 2,000.00$ suits.

    Anyone ever read Matt Taibbi?
    DJ, "Because I'm sure the world need's more dudes stalking the woods stoned out of their mind carrying a deadly weapon."

  25. #25
    Wēk Sôs
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    Facebook will settle down to where it belongs. The key word being down. The E/P is too high, especially for a company that pulls in so little revenue and is ad-based. The IPO was to raise money for the company, and that it accomplished. The market cap, though, it's bigger than Boeing and that's just all hype. Companies that advertise on FB have pulled ads because it just doesn't pan out. It's good for disseminating information if you "like" a manufacturers page, but other than that, it's not so good.

    In the days of post-internet bubble investing, it will correct and it will correct down. I honestly think the company should be in the low teens. The revenue was pathetic. Social gaming, perhaps, but it becomes annoying after a while. The social gaming aspect, is a good niche, as it targets people like housewives and the like and not the more hardcore crowd you'd see with MW3. At the same time, the more it focuses on it, the less appealing it will become. People get de-friended because of spam.

    If I were a gambling man, I'd short it.

  26. #26
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    Quote Originally Posted by jeffgothro View Post
    Wallstreet = Legitimised con artists in 2,000.00$ suits.

    Anyone ever read Matt Taibbi?
    Ya - the whole thing is rigged - but guess what - it is the only game in town. All other investments are tied back to the stock market.

    I sure hope your retirement plan isn't expecting to get SS or growing dope....

  27. #27
    Hi.
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    The only people coming out ahead in the FB IPO are the employees who got the options for free. Investors are getting absolutely HOSED on it right now.

    I LOL'd because there's no way in hell I'd buy FB stock. Terrible investment right now.

  28. #28
    AZ
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    Seems that there may have been some improper goings on.

    Facebook Bankers Secretly Cut Facebook

  29. #29
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    Quote Originally Posted by AZ.MTNS View Post
    Seems that there may have been some improper goings on.
    Thanks!

    I loved the 'Muppit Bait for the Masses' comment..

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