Facebook IPO Eclipses Google, GM

[Barry_Green]

The bloodbath continues. Down another 10% today, to 28.84. Market cap of $61 billion. That means that, from its high of $45/share, it had a market capitalization of $125 billion, and now it's down to about half of that. Sixty billion dollars of "worth" just evaporated.

At some point it'll sink to a reasonable valuation. My initial guess when it came out and shot up to $45, was that it was gonna sink to $25 within six months. It's on pace to hit $25 this week, and if tomorrow goes like today did, it could hit $25 tomorrow. And I still don't know if that's a decent buy or not.

But it's an infinitely better buy than it was at $38 or $45! It's the exact same stock, nothing about it has changed, it's just "on sale" for 40% off.

I'd be a buyer at a reasonable valuation, meaning a P/E of around 13. But even at $28.84, its P/E is still an astonishingly high 102! It'd have to fall to four bucks a share to have a P/E of 13... either that, or they're going to need to massively increase revenues to justify the price...

 

[groveChuck]

The bloodbath continues.

I'd buy at $10...

 

[Barry_Green]

Wow. It dipped under $20 today... I was expecting it to drop to $25 within six months, and it has instead plummeted to $20 in just over two months!

Now it's getting to a more reasonable valuation. Be glad you didn't get in at $38 or even worse, at the $45 peak! But somewhere down here it will find a floor. I don't know where though, and I would caution anyone about trying to catch a falling knife... P/E is still a relatively astronomical 68+. And I dont think the lockup periods have started expiring yet. When they do, insiders will be freed up to sell millions and millions of shares that they are currently prohibited to sell.

Will it sink to $10? Who knows? I just hope our dvxers stayed far away from this pig and avoided getting fleeced, and that they don't get sheared when the lockup periods start expiring.

Like I said in my first post, a lot of people are going to lose a lot of money on Facebook. And a lot of folks will make a ton of money on it, when it sinks low enough and the insiders have dumped all their shares and the mutual funds have dumped all their shares in 4Q "window dressing." because when everyone has sold everything they have, there's nowhere for it to go but up. Now is not that time, but that time will come.

 

[groveChuck]

Yeah, I saw that. You should be a broker/advisor, Barry! :thumbsup: You're a wolf in lamb's clothing... (sorry, that's b-a-a-a-a-d).

I'd still buy at $10.

Meanwhile, Yelp is up:

Yelp Inc. shares rose as much as 12% after the online review website reported second-quarter sales that topped analysts' estimates, as an expansion into new regions helped widen its user base.
Revenue rose 67% to $32.7 million, the San Francisco-based company said yesterday in a statement, beating the average analyst prediction of $30.5 million compiled by Bloomberg. The net loss was $1.98 million, or 3 cents a share. Analysts on average were projecting a loss of 5 cents.

As rivals Google Inc. and Facebook Inc. add local content, Yelp is spending more on marketing, adding mobile features and pushing into new countries such as Denmark.
The company also announced a partnership with Apple Inc. to integrate its local content into software for the iPhone and iPad, as well as a deal to include local features in Microsoft Corp.'s Bing search engine.

More:
http://adage.com/article/digital/ye...mail&utm_medium=newsletter&utm_campaign=adage

 

[Marc Villafan]

Wow. It dipped under $20 today... I was expecting it to drop to $25 within six months, and it has instead plummeted to $20 in just over two months!

Now it's getting to a more reasonable valuation. Be glad you didn't get in at $38 or even worse, at the $45 peak! But somewhere down here it will find a floor. I don't know where though, and I would caution anyone about trying to catch a falling knife... P/E is still a relatively astronomical 68+. And I dont think the lockup periods have started expiring yet. When they do, insiders will be freed up to sell millions and millions of shares that they are currently prohibited to sell.

Will it sink to $10? Who knows? I just hope our dvxers stayed far away from this pig and avoided getting fleeced, and that they don't get sheared when the lockup periods start expiring.

Like I said in my first post, a lot of people are going to lose a lot of money on Facebook. And a lot of folks will make a ton of money on it, when it sinks low enough and the insiders have dumped all their shares and the mutual funds have dumped all their shares in 4Q "window dressing." because when everyone has sold everything they have, there's nowhere for it to go but up. Now is not that time, but that time will come.

Put options dominated this astronomical drop.

As you say, many inside stocks are going to be freed. By November 12, most/all of that locked up stock will be released. Will there be demand for all those shares? The amount of shares that have lock-ups expiring is pretty significant. Whether that has already influenced the current market prices or not is something to think about.