Ya I saw the news earlier and was scratching my head about the 8% rise in price on poor results. MZ must have thrown in a few encouraging words to keep the flock in tow.
With the terrible results coming soon from Zynga in the next few quarters, and considering how closely tied to Facebook's revenues (12%) the market logic is funny.
Then as you mention there's the upcoming lock-up periods expiring. Add to that the year end tax loss selling from those who were taken to the cleaners since the IPO. It looks like a pretty good storm brewing.
I'm more interested in the flood that's coming on November 14 when there will be an increase of 77% over today's shares in circulation -- 777 more shares will be unlocked.
The details are at SeekingAlpha, "The Flood Of Facebook Shares Is Coming - Grab Your Ark" [seekingalpha.com...]
Merry Christmas Facebook.
Oh ya and I would say someone somewhere is pumping so they can get themselves into a good short selling position for the upcoming show.
Got any popcorn left or did you eat it all already?
|"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," said Mark Zuckerberg, Facebook founder and CEO. "People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company."Facebook Reports Third Quarter 2012 Results [investor.fb.com] |
They made a loss, yes, but situation is improving. $157mill loss last year, down to $59mill loss this year. If that continues to next year, they will then be in profit. Sounds good to me long term.
Don't look at the share price because that is dependant on existing and future shareholders, the figures tell another story.
I agree, just because it's a loss doesn't mean panic. FBs opportunity for profits is coming.
|man in poland|
I reckon the share price will be just under 10 dollars before the end of the year. I know - sticking my neck out! But it puts the company's value more in line with others in the same sector... based on its earnings. The launch price was just plain greedy, IMHO
There's an intangible about facebook that I just can't put my finger on to explain in words or I would. By that I mean there is something that is going to drag that company down fast and hard. And I'm not referring to the share price but that too will follow along without doubt.
Keep this in mind too; the general public, even many business people, do not understand the concept of common shares and how they work. Because of that, when the media starts circulating around dropping facebook share prices like vultures they keep it in the limelight. That attention will probably have a negative effect on users and even advertisers who don't understand that share prices are not an ultimate reflection of the potential (or lack of) within a company. That same attention might cause users and advertisers to bail out for not wanting to go down with the (perception of a) sinking ship. Share prices are simply a reflection of investor (and speculator) sentiment. They go up, they go down, they go up, they go down -- all based on what investors THINK may or may not happen in the near future -- not based on what's really unfolding within the company. Therefore if the investors cannot see for themselves what is really happening (most cannot) they just follow the market trend and do what the market is doing.
And the simple minded market is only reacting to what MZ is saying just like they didn't question the IPO price. I remember leading up to the IPO even we as a community of WW members were rolling our eyes into our heads at the suggestions of what the company was really worth. We knew it wasn't worth that. Yet the market was lead by their senselessness to the slaughterhouse.
Going back to what I was saying about an intangible about facebook -- it revolves around INTENTION, but is not limited to that. However intention in and of itself is a strong enough factor to drag that company down on its own.
I had to go look up a post by jecasc that expresses it very accurately:
|On Google I can convince a hungry guy to buy a pizza when he is actively searching for something to eat. On Facebook I have to convince the guy he is hungry first before I can sell the pizza. |
People on Google are actively searching for a place to go - Google is not their destination. - exactly because it is only a search engine. If I can convince them with my ad that I am the place to go I can make money and pay Google for it.
Facebook is already the destination. Facebook is the place where people wanted to go and want to stay for the time being. An ad is much less effective here.
That's why Google users are - and will stay for a long time much more valuable for advertisers - even if Facebook has 3 Billion active users. [webmasterworld.com...]
A few weeks back MZ implied that they were making progress on developing internal search -- that successfully eased the faltering share prices at the time. This time he's saying how wonderful the future of mobile looks, and the mindless minions bought into it again -- up go the shares by 8%!
The truth is that if google is struggling to maintain search dominance how much less likely is facebook to succeed at it?
As for mobile potential -- most days I go and enjoy a joltin' cuppa java at my fav café. While sitting I studying the behaviour of the folks sitting around with their electronic gadgets. Almost all of them have mobiles and almost as many are pounding away on laptop keyboards. There are many students there making use of the free wi-fi doing research I presume for homework. Occasionally they will pick up their mobile and glance at it, probably an incoming text or something. Maybe they are also looking at something posted on their facebook page, who knows. But I think mobile user intention will not grow into a gold mine. It is simply a product of convenience -- a value added gadget to complement the time away from a more useful means of connecting to the internet -- a laptop or desktop.
But if any "investor" doesn't see the writing on the wall (I made a pun) for facebook they will have nobody to blame but themselves for ignoring all the warning signs.
<<< After proof-reading this post prior to submitting it I think it's a bit fragmented in thoughts (coffee hasn't kicked in yet) so if something isn't clear just shout it out :) >>>
LOOOOOOOOL...I just went to peek at FB share prices...they are up 22% this morning!
Me tinks someone is buying small board lots of 100 to drive up the price so they can then dump hundreds of thousands of shares later while short selling them then cover their positions later in the year. Speculators in action by the behaviour being displayed in the prices this morning. And they can hide the intention in the rosy news of yesterday. Probably insider action in motion.
<<< Oh look over there, there's a man stealing a donut, arrest him >>>
Let's see how well that ad spend holds up when businesses asses the ROI...
There's a lot of tosh talked about it but as SevenCubed referenced above it's a fundamentally different platform.
People on FB aren't in buy mode.
There's no like for like CPC or CTR comparisons. An adwords advert for a product might well convert extremely well for reasons outlined above but the same model be it CPM type or CPC with FB just doesn't work.
Consequently, FB HAS to adjust it's pricing to a level that gives something nearer the same. The problem they have is that to do so is very difficult as it's a very different beast. A CPC model on adwords that charges $1 per click might well need to be closer to 0.01 cents or less on FB, simply due to the poor levels of conversion.
Whilst there's most certainly a value of sorts in being attached to the FB system (pages, likes, positive ID, shares etc) they haven't yet conclusively demonstrated that their ads deliver value anywhere near to what companies are being asked to pay for clicks or CPM. I used it once and spent a paltry $70. I received 10's of 1000's of impressions, impressions that most people were probably either blind to or annoyed by. 807,588 imps 33 clicks CTR 0.004%CPC 1.38 IOW - a waste of time and money on a campaign that was carefully targeted.
Don't get me wrong, there's bundles of edge cases where guerilla tactics for quirky things can be very profitable indeed. Drive by downloads generated by sexy avatars or get rich quick type nonsense on the scuzzy side of the money pond are a few that spring to mind along with those annoying game ads and crap like that, but for genuine mainstream products and services, it just isn't there.
I'm sure somewhere will chime in about brand value and awareness and hidden intangibles but ultimately, they need to demonstrate clear ROI to the many 1000's of businesses who they could potentially sell to,
Any software or service company that posts a loss on $1.26B revenue is being sorely mismanaged IMO. It's not like they have any inventory or any real COGs like companies that produce actual products. On that fact alone I'm surprised the stock doesn't drop like a rock but what do I know.
I'm going to add in one very interesting detail of my non-scientific evaluation of FB stock.
I was walking by my 16 year old's door and said "Hi"... she ignored me, staring down at the screen on her tablet. Next, a bit louder -- and with a tone letting her know I wanted a response, "Hi. Do you think you could tear away from Facebook for a minute to say hi".
Her response, "It isn't Facebook, I'm on Tumblr. Facebook stinks now."
That is the end of my report. My 16 year old teen who had risen and set like the sun to Facebook for approx. 3 years, now proclaims "Facebook stinks now".
lexi, I think you're right, FB is full of my generation, the 30 to 50 (and above!) year olds. Perhaps this is a better market for FB advertisers - certainly richer!
But still not in a shopping/buying mood when on the 'book.
Poor reporting by the BBC and poor checking into the facts here.
2nd quarter they had a 1.3 billion expense related to the IPO and 3rd quarter they had a 431 million tax bill because of it.
Both 1 time expenses and not reflective of the overall health of the company
|But still not in a shopping/buying mood when on the 'book. |
And that I think is the general consensus.
FY( further )I
|Following on from Facebook's perky third quarter results, there has a been a groundswell of discontent. |
The gist of complaints is that Facebook has made the service noticeably worse in the past few months, and is now charging people to have it return to the levels it was before.
New moves by facebook include paying to promote personal posts!
I suggest reading the comments at the linked article to get an idea of how facebook is making changes..and "generating" revenue..
At some point FB had to start charging for business-type Pages so this isn't much of a surprise. After all, FB isn't a charity or not-for-profit. It was this or charge for business-type accounts,right?
Yes, I hate to say it but FB could gain some good revenue by charging for Business Fan pages.
The number of business that advertise their FB page rather than their website on tv is amazing.
But how to charge fairly for Ford Motor company's page and my FB Fanpage?
|But how to charge fairly for Ford Motor company's page and my FB Fanpage? |
I suppose they could charge a fixed dollar amount per Like or Page view. I can see the potential for abuse with both those options though, but I'm sure FB's engineers coulf find a way to limit the abuse.