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Comments: 118 +- Facebook Stock Going Public? on Wednesday November 25, @08:33PM
Posted
by
samzenpus
on Wednesday November 25, @08:33PM
from the planting-stock-in-moneyville dept.
from the planting-stock-in-moneyville dept.
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zmaragdus writes "Facebook Inc. converted its existing stock holdings into different classes of stocks (Class A and Class B) designed to give certain shareholders more power than others. This has been typically done in an IPO of a company's stock to give important people (company founders, for instance) more clout in the actions of the company when stock is first offered to the public. While Facebook maintains that it does not plan to offer stock publicly in the near future, this restructuring is one of the critical steps in doing so."
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hmm (Score:4, Funny)
Re:hmm (Score:5, Interesting)
I like this.
I enjoy this for another reason.
This reminds me of the old bubble, where companies who exist merely on advertising go public. Lots of people get hyped about it; eventually everyone realizes that it's a waste of money and the company goes under.
Hopefully history repeats itself, and like all of the dot-com bubble companies, facebook will be no more.
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Re:hmm (Score:5, Insightful)
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Re:hmm (Score:5, Interesting)
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Re:hmm (Score:5, Interesting)
Facebook could easily develop a microtransaction API. $10.00 = 1000 credits. Buying something in an app might cost 5 credits (aka 5 cents), which is impossible to bill for via credit card due to all the fees. So Facebook can start keeping a credit bank, and apps could debit your account based on purchases you authorize. Facebook takes a 20% cut.
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Re:hmm (Score:4, Funny)
After scoffing when Google IPO'd at $80... and then having to watch as the stock soared to over $500... I might have to get in on this one.
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Re:hmm (Score:5, Insightful)
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(Personally, I'm not going to buy any Facebook. One of my mutual funds will probably pick up a few shares indirectly; whatever...)
Re:hmm (Score:4, Insightful)
Screwing users over is great for short-term revenue, but companies who are in it for the long haul value things like brand loyalty.
In this universe things work differently. Take eBay: it had huge brand loyalty and it has been pushing and pushing and people have been abandoning by the thousands. eBay last March actually created (because of a bug according to them, yeah right) a hundred thousand fake listings right in the middle of a user boycott to show the numbers were actually up instead of down. Their stock has been plummeting. Companies with public stock have stopped caring about their users/consumers long time ago. Maybe in your universe things are different, I wish I lived there ;)
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Re:hmm (Score:5, Interesting)
Once it's a public company, it has a fiduciary responsibility to bend its users over to try and get as much money for its shareholders as it can.
Here's an interesting thing they could think of. Ask users to pay a small monthly fee to see who views their profiles. Sure, it'll drive a lot of people off the site, but Facebook is so ingrained in the lives of a certain demographic that it would feed of insecurities and fears and certainly generate a decent monthly revenue. The same insecurities and fears would ensure that a user pool never disappears, since getting off Facebook would deprive you of OMG! why is Sheila dressed like a tramp!??
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Re:hmm (Score:4, Insightful)
...ask them for a fee to see whom of their friends viewed their profile.
Facebook isn't a true dating site, it's more of an extension of your real life social circle. Remember that cute chick your friend Greg was with at that concert where you randomly met? You two exchanged a few words, and you're pretty sure she smiled at you in an "interested" sort of way, but you were too shy/drunk/whatever to ask her for/write down her number. Luckily Greg has her as a friend, so you add her too. After she's accepted your friend request (she will, there's at least one mutual friend & she might've already met you); you of course want to know if she just Accepted and was done with that or actually checked out your profile. And that party photos where you're totally drunk, half passed out and look wicked cool. Well, guess what: You can. For 20 credits (1000 credits are $9.99) you get 24 hours of access to your profile's visitor log. Another 20 credits will even tell you whom looked at which one of your photos and videos.
You spent 40 cents for quite a bit more information than you'd get before buying a girl a drink in a bar. In five out of six cases, she might never even visit your profile, but you'll be checking for that occasional one out of six who will. At 20 cts per day and a moderate guess of 100 checks per year, they make $20 off of you directly, $50 off of you for advertising and $30 for some data mining (they have your credit card, know what ads you click, what profiles you look at and they've got pics of everything you do). That's $100, annually for, say, 5% of their 300m user base. $1.5bn ain't that bad.
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http://www.rose-hulman.edu/~christ/vfecon_asee2008.pdf
christ goes to rose-hulman? they didn't mention that back in '97 when i was there for a prospective student visit....
It would be only fitting ;) (Score:2)
Since stock market is a game of imaginary monetary values and FB involves large number of people playing imaginary social life...that could self propel itself nicely, yes/no? ;)
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Yeah they should come over to Slashdot, it's the place to be if you want a great social life. Everyone on here are your real life friends, honest, unlike Facebook where it's all imaginary.
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When was Slashdot supposed to be a place to make friends? I come here for the news *cof*, old memes and car analogies.
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When was Slashdot supposed to be a place to make friends? I come here for the news *cof*, old memes and car analogies.
You mean...
You're not...m-m-m-my...friend?!
*runs away sobbing*
Of course it's going public (Score:5, Insightful)
It's at the peak of it's popularity and thus the peak of it's perceived value.
They'll "go public", the owners (founders and other investors) will make out like bandits and then retards^H^H^H^H^H^H^Hfund managers will invest money in it from all of our pensions and savings. The stock will change hands many times as it is speculated upon repeatedly until such time as the next big thing comes along and it takes a slow plunge to worthlessness and irrelevancy.
In the meantime the founders are rolling in (our) cash.
Re:Of course it's going public (Score:5, Insightful)
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So (quit the 401(k) and roll it over into an IRA and) take responsibility for your own savings. Heck, short-sell if you want.
IANYFA, but you can't sell short from an IRA account, you'll need a margin account. If you want to fund that margin account with your 401k proceeds, it will be a taxable distribution.
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And so we see the real point of IRAs and 401ks. To lock up your money in vehicles where other people can make it work for them.
Thank you, but "won't be taxed until later, when taxes' inexorable rise negates the supposed benefit of the lower income" is just not as enticing as it used to be.
IRAs are like cell phone contracts. You think you're getting a deal, but all you're really getting is less bargaining power.
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It's possible to sell short in an IRA, but it's difficult / expensive to get an arrangement that will allow you to. Buying PUT options might be a better choice for betting against a stock, for a trader, provided you understand the mathematics, the risks, and requirements involved (including such risks as your broker automatically exercising an option at expiration if you fail to deliver notice to leave it un-exercised, or they fail to receive your order in time).
Generally, most brokers won't just let
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Re:Of course it's going public (Score:5, Insightful)
And pets.com, and webvan, ...
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Re:Of course it's going public (Score:4, Insightful)
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And how are you underwriting this guarantee? When can I expect payments?
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If you don't trust the managers of whatever fund your money's in - move it. If you're totally risk averse put it in fixed income. Or hell - if you're so much better at stock picking that the professionals start your own fund. From what you say it should be easy and you'll be rich off all our money :)
An eIPO often seems like (Score:2)
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Re:An eIPO often seems like (Score:4, Interesting)
Twitter has a bit of a shot but I think it's a little too much of a one-trick-wonder. If there's one social-media-networking thingy today that's got serious money potential, I'd say Facebook is it.
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You say that Facebook has done significant outreach to developers. That may be true in the sense that Facebook users get some added value, but it isn't visible to a non-user: in that sense they are exactly like AIM, making sure people on Facebook cannot interact with people outside.
Facebook is only different in that they've promised to act otherwise, so I'm giving them the benefit of doubt. However, the XMPP suppport was promised a year and a half ago...
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Slashdot has been around a long time and has a dedicated following, is it a flash-in-the-pan popular site? I mean, /. is really a place for people who were/are on the forefront of the emergence of the Net into our lives. Can anyone think of any single site that crosses more culture, economic, or age brackets? Say what you want, but they did something right. And picking themselves up from their bootstraps to comeback from near-defeat at the hands of MySpace is something to be respected.
When did you stop talking about /. and start talking about FB in there? Honestly can't tell.
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My grandma hates Facebook... because the news told her to.
Not a "critical" step (Score:3, Insightful)
The summary is wrong in calling this a "critical" step. It is a voluntary step, for the founders (and whoever else gets the higher class stock) to have more control over the company. But it's not mandatory (which I would infer by it being a "critical" step).
Who needs facebook (Score:4, Funny)
Re:Who needs facebook (Score:4, Insightful)
I need facebook so my wife, sister, mother, etc don't inhabit /.
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Re:Who needs facebook (Score:5, Funny)
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Stable Business Plan? (Score:2)
The illusory "growth" that comes from a float (should it happen) is all well and good but it is no substitute for an actual product/income stream. Exactly what is Facebook's perpetual and stable income stream? Catering for fads and skimming advertising money off the top is one thing, but lasting more than a while in that line of work with an audience of with a well-formed, fickle throw-away mentality is quite another.
As you can possibly tell, I'm one of those people that really don't see what Facebook off
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Have you seen any sites where you can log in with your Facebook account yet? That's federated identity management, Kyle! Whatever else, they're not just resting on their laurels over there.
The other reason for doing this (Score:3, Insightful)
The other reason for doing this is if you plan on distributing profits based on shares.
You can give more money to some people while giving the illusion of ownership to all.
They are trying to go public (Score:5, Interesting)
Facebook is trying to go public. About a month ago, one of their recruiters was trying to get me to sign an NDA for an on-site interview; and he refereed to their impending IPO as the justification for the NDA.
I didn't sign the NDA.
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Ya know that won't stop the SEC from bringing charges against you for tipping.
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The wise move. (Score:2)
Apple wouldnt have had all those problems if they were smart enough to do that at the start. Instead, they fired their main vision guy, only to have to call him back in the end to save them.
look at how it worked for google. look at other similar examples.
these extraordinary successes are not happenstances. they happen because their creators have a vision and spirit. get them out of the equation, and the machine starts to falter.
institutional investors may stand away as much as they want from this by the way