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Facebook Reportedly Filing $5 Billion IPO Today 268

Posted by samzenpus
from the price-of-a-friends-list dept.
hypnosec writes "Today is the day when Facebook may be submitting all required paperwork to regulators for its $5 billion initial public offering. According to the source close to the deal, Facebook has selected Morgan Stanley along with four others — Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Barclay's Capital to handle this IPO. Morgan Stanley will be taking "lead left" role in this supposedly biggest IPO from Silicon Valley. According to International Financing Review, the preliminary target of $5 billion will be increased by many folds in coming few months as a response to the demands of investors. Sources close to this matter disclosed that this might turn out to be defining moment for current web investments. The deal might rise to $10 billion which eventually will make Facebook a social networking empire valued between $75 billion to $100 billion. In fact, $75 billion is definitely an undervaluation compared to previous expectations."
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Facebook Reportedly Filing $5 Billion IPO Today

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  • Watch it grow. (Score:5, Insightful)

    by lorinc (2470890) on Wednesday February 01, 2012 @03:35PM (#38894775) Homepage Journal
    And then watch carefuly the bubble explode...
  • $225 (Score:5, Insightful)

    by greap (1925302) on Wednesday February 01, 2012 @03:40PM (#38894859)
    Based on that absurd valuation the average Facebook profile is worth $225.
  • by Anonymous Coward on Wednesday February 01, 2012 @03:49PM (#38894993)

    Reads like a rogue's gallery of the financial sector.

  • by alen (225700) on Wednesday February 01, 2012 @03:50PM (#38895023)

    from the leaked financials last year facebook is making money. I think it was $250 million or so NET profit on revenues of $1.5 BILLION.

    for a lot of people facebook is the new contact list and has replaced email for most communication. my gmail is my spam/marketing honeypot these days and social networks are used for communication.

    but then again geeks and techies are usually the last ones to GET trends like this.

  • by ackthpt (218170) on Wednesday February 01, 2012 @03:52PM (#38895047) Homepage Journal

    I can't help but feel there's some irrational exuberance at work here. Exactly why is Facebook worth $75 or $100 Billion? Do they have a revenue stream like Google has?

  • by kaellinn18 (707759) on Wednesday February 01, 2012 @04:03PM (#38895167) Homepage Journal
    Here's the major difference I see. When Google had its IPO, they were coming out with new services all the time. It wasn't just a search engine. Since then, they've developed Android and have a good share of the cell phone market. Facebook has made... well, Facebook. That's it. Not only that, but every time they have "improved" it, it's almost always made it worse. I don't even use it anymore. Unless Facebook is going to unveil some innovative plan about where they are going, there is zero reason to buy this stock.
  • by ceoyoyo (59147) on Wednesday February 01, 2012 @04:09PM (#38895229)

    Well, here's how it works:

    1. You start up a company (or buy into a private stock offering)
    2. Build it into something that looks reasonably valuable
    3. Hype it to death
    4. Do an IPO.
    5. Profit!

    I'm sure Facebook's (current) shareholders will come out of this very nicely.

  • by iggymanz (596061) on Wednesday February 01, 2012 @04:10PM (#38895245)

    the geeks I know with more than half a brain don't do social networking sites at all.

  • Inspirational (Score:4, Insightful)

    by paiute (550198) on Wednesday February 01, 2012 @04:10PM (#38895249)
    I'm going to look around right now for people to screw and things to steal.
  • by eln (21727) on Wednesday February 01, 2012 @04:22PM (#38895399) Homepage
    MySpace and Friendster would like a word with you.

    Obviously Facebook has been far more successful than any of its predecessors, but it's still an Internet property that could be replaced and fall virtually overnight at any moment. It may be a good buy now, but if you're caught holding the bag at the wrong time you could easily lose your shirt.

    The best prospect for Facebook investors remains for it to be bought out by some large conglomerate so they can cash out before the bottom falls out. Young people are already abandoning it as they don't like hanging out where their parents and grandparents also hang out, and even some older people (not as many as Google had hoped) have likewise abandoned it for Google Plus. At some point, some other site will come along and eat Facebook's lunch, it's only a matter of time.
  • by Lev13than (581686) on Wednesday February 01, 2012 @04:22PM (#38895407) Homepage

    That said: I don't understand how they are running this IPO. Don't they usually set an initial offering price? Are they trying to auction the initial shares? I'll start the bidding with a nickle for the lot.

    An IPO's price is set just before the shares hit the open market. The vast majority of a company's shares are either owned by current investors (employees, executives, angel funds etc...) or purchased by investment banks as part of the IPO (when all the shares are purchased in advance it's known as a bought deal). This gives the IPO company a guaranteed source of cash and simplifies the whole process. The investment banks then try to maximize their gain by selling their shares to their clients at a higher market price.

    As an investor, you go to your bank and put in a request for X shares. You won't know the exact price until you buy, and your request may be fully/partially/not filled at all. Generally the pension funds get first crack (usually at a discount) and small investors are often left to fend for themselves.

    By waiting until the last second to set the market rate the investment banks can gauge demand and maximize the revenue they get from selling their shares to their customers. Once the shares are distributed the stock starts to trade on the open market, and anyone can get in. However, strict rules block the vast majority of insiders from selling immediately so demand is heightened by the limited number of shares. That makes the price go up and everyone is supposed to be happy.

    In case you missed it in the description above, the average investor is the mark and the company, the investment banks and then pension funds are in on the con.

    (This is a bit of simplification but covers the gist of it)

  • Re:Watch it grow. (Score:5, Insightful)

    by Kenja (541830) on Wednesday February 01, 2012 @04:24PM (#38895437)
    I think the bubble will last up till the point where Facebook realizes they have to now disclose to share holders what they do to make money.
  • by kiwimate (458274) on Wednesday February 01, 2012 @05:18PM (#38896165) Journal

    Don't know quite what you're doing, but your rant does demonstrate that, yeah, you really don't get it.

    1) A huge personal data sink where I could put all of my information in one basket to be sold to the highest bidder, analyzed, and then acted upon with absolutely no benefit to me.

    You do realize you don't have to put in lots of information, don't you? There's very, very, very little that Facebook actually requires you to enter.

    2) A marginally effective communication tool. Signal to noise ratio sucked, because much like Twitter, you had a constant stream of information that was barely useful, relevant or interesting. Especially, when there is a huge trend to manipulate you into posting other people's content on your wall for marketing purposes.

    Signal to noise ratio was a bit off for me, to start. So I blocked anything coming from games and turned off anything coming from the small number of people who were on my Friends list who were the worst offenders at constantly posting status updates. If I want to know anything about them, I go to their profile page.

    Which turned Facebook into an incredibly useful communications tool for me. YMMV. I have regular conversations with a cousin who I hadn't seen in years because we lived on opposite sides of the world (literally) and I didn't know her e-mail address. Friends change e-mails? I don't have to know - they stay in the same place on Facebook.

    3) A gaming platform thinly disguised as a social networking platform where Facebook was constantly fighting to get a real piece of the financial action taking place.

    No, it's a social networking platform that sees a lucrative side business in gaming. Don't like it? Don't play the games. You don't have to, you know.

    I have tried a handful of games from time to time. Yes, I tried Farmville to see what all the fuss was about. Bored me. Deleted. End of that.

    And I can't imagine why you're getting a whole load of spam. I have never gotten spam from Facebook. Not once. I have received e-mails that I signed up for, until I decided, ehh, not interested, and changed my prefs. Result=nothing. As in no more e-mails. Easy.

    When we disagree, refuse to participate, and quite often make condescending and derisive comments towards other people that don't understand what we see you misinterpret that as us "not getting it".

    Well, yes. What's the alternative? Either you are refusing to admit that something that's not useful to you might possibly be useful to someone else, or you're just being smug and - you said it yourself - condescending because you're too cool to use Facebook, in which case you're just being an immature jerk. Or you don't get it. Which is it?

    if you don't like Facebook, don't use it. Easy. Done. Move on with your life. Let the insignificant masses who are so inferior to you have their fun.

    Anybody that puts money into this is a sucker

    Insert standard disclaimers - past performance is no guarantee of future performance, you should only invest as much as you can afford to lose, all investments carry an element of risk, etc. An investor either makes an educated gamble, or they do something on a whim. If it's the latter, well, it doesn't matter if it's Facebook or HP, they're making an uneducated gamble.

  • by rtb61 (674572) on Wednesday February 01, 2012 @05:35PM (#38896357) Homepage

    They will fix this by going on a buying spree, using the shares as junk bonds to buy companies that actually make money. When it all washes out the only real losers will be the pension funds whose executives got paid tax haven purchasing commissions.

  • by Anonymous Coward on Wednesday February 01, 2012 @06:46PM (#38897187)
    No he gets it. Remember AoL? They were the platform of choice to do everything in the 90's, and look how long they lasted as a dominant market force once everybody got tired of their flash and glitz and move on.

    I don't give them more than ten years before they are are just another washed up tech company.
  • by ceoyoyo (59147) on Wednesday February 01, 2012 @09:36PM (#38898637)

    "Here's what I've done on Facebook just today over the last eight hours:"

    Hm... not one of those things involve buying things. In fact, your only commercial interaction was blocking an advertisement. I think I'll go with the GP on this one - Facebook is not worth 75 billion.

  • by kiwimate (458274) on Wednesday February 01, 2012 @09:59PM (#38898819) Journal

    Hmm, Score:5, Insightful. Apparently there are at least three or four moderators who suffer the same overwhelming superiority complex and lack of connection to the real world as you do.

    Here are some hints.

    1. Yes, it's +5 insightful. No, that doesn't mean it really is insightful.

    2. Get over yourself.

    3. The geeks I know with more than half a brain have the ability to interact socially, recognize that there's more to life than just geek stuff, and are mature enough to run their lives based on what they want to do and accomplish instead of desperately seeking validation from some smarmy commentary on the internet, of all places.

    4. They also have sufficient intelligence to recognize that Slashdot is a social networking site for geeks. Yes, really.

    4a. ...and not care, so long as it serves their aim.

    A label is just a label. Deal with it.

"Only the hypocrite is really rotten to the core." -- Hannah Arendt.

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