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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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  • by elrous0 (869638) * on Wednesday February 01, 2012 @03:33PM (#38894755)

    Time to tap into the kids' college fund. They can thank me later.

    • 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 Anonymous Coward on Wednesday February 01, 2012 @03:56PM (#38895085)

        That's only a P/E of 400. Seems reasonable.

      • by Anonymous Coward

        Facebook was cool 6 years ago (no really: it was actually really exciting). Then we got the "apps" nonsense. Then Grandma got an account. And now Coca-Cola (tm) has "fans". WTF? It's not cool anymore. Geeks already got it, and got out.

        • by alen (225700)

          yes, they went to google plus where you are supposed to "circle" bloggers and other internet superstars and comment on every post about how cool they are. and you are supposed to +1 crap around the internet to help google battle evil SEOs

          • 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.

            • by Tsingi (870990)
              IRC
              • by zill (1690130)
                He said "sites", as in "websites", which all rely on the HTTP(S) protocol. IRC is a completely different protocol.
                • by Tsingi (870990)

                  He said "sites", as in "websites", which all rely on the HTTP(S) protocol. IRC is a completely different protocol.

                  You must be really hurting to correct someone.

                  Regardless of the magic number in the packet headers, I use IRC as a social network. I don't use FaceBook.

              • by iggymanz (596061)

                yes we do that, but that is not a web site

            • 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.

      • Re: (Score:3, Insightful)

        by eln (21727)
        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 peo
      • by EdIII (1114411) on Wednesday February 01, 2012 @04:24PM (#38895441)

        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.

        LOL.

        Uhhh, no. I "got" it. Then threw it back like the steaming turd that it was and still is.

        I got a fake Facebook account some time ago to keep connected with younger relatives since it seemed the only way to get their attention was to play Mafia Wars or place a message sign on their farm in Farmville. Being a geek and techie, I saw Facebook for what it really was:

        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.
        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.
        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. Starting their own credit system was basically a coup against Zynga which was valued in the billions initially because of revenue, most of which was illicitly gained through dirty tactics like premium charges on cell phones and other such instances of fraud. One of my younger relatives got hit with a $300 cell phone bill one month and honestly did not know the consequences of wanting some shiny that Zynga was offering.

        So, No you are quite wrong. Most of us geeks and techies completely understand the trend that Facebook is. 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".

        What I wish is that other people would get what Facebook really is.

        Your comment about SPAM and marketing is utter hilarity considering what the Facebook experience was like for me for the short while that I had it. Marketing overload anyone........ I had less SPAM and useless information coming into my junkmail folder at Yahoo, and that is saying something.

        Anybody that puts money into this is a sucker. They are just making the payday dreams of the early and special investors come true and then you are holding the bag of shit. Same with Zynga.

        Facebook might be hot for awhile, but the real trend is an evolving method of communication. To say that Facebook has the lock on that it is incredibly untrue. So many different projects in the works to satisfy this new kind of communication methodology, and with far better signal to noise ratios too.

        At the end of the day Facebook has revenues tied to something that you would be foolish to call "stable". It's damn near whimsical over the long run.

        Put your thinking cap on for a second. 75 billion. With a B. How can that possibly be true in reality? We are not talking Exxon here that makes something tangible that we are literally addicted too. This is based off credits and advertising revenue, both of which don't have a strong foundation, and can have a huge swing in profitability and volume.

        Facebook and Zynga are incredibly over valued and over hyped. God help everyone who buys into it at the high range.

        • Really that's the question you need to ask yourself. Then ask if the company really is worth what they say it is worth, or if they are just looking for chumps to hold the empty bag as they make off with the cash.

        • by DerekLyons (302214) <fairwater@gmail. c o m> on Wednesday February 01, 2012 @05:12PM (#38896077) Homepage

          So, No you are quite wrong. Most of us geeks and techies completely understand the trend that Facebook is. 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".

          No, he's quite right. You've built an elaborate justification for why you dislike it - but you've shown not on quanta of evidence that you get it.
           
          If you believe it's only a marginal communications tool... Well, for it be a useful communications tool you've got to either want to communicate in the first place, or know people worth communicating with. (You and many other geeks keep blaming Facebook for your own failings.)
           
          Here's what I've done on Facebook just today over the last eight hours:

          • Commiserated with friends, family, and high school classmates over the sudden (and much too young) death of a classmate on Sunday.
          • Got a status update from a friend whose newborn is still in the hospital and quite ill.
          • Continued planning, with a bunch of old shipmates, activities for our next re-union.
          • Shared with family and friends photographs from a photowalk last week. (I.E. not phone pictures, but serious pictures I took and uploaded to Flickr.)
          • Got tips from my sister (a professional chef) and some foodie friends on a new dish I'm trying to cook for the first time for tonite's dinner

          Etc... etc...
           

          Your comment about SPAM and marketing is utter hilarity considering what the Facebook experience was like for me for the short while that I had it. Marketing overload anyone........ I had less SPAM and useless information coming into my junkmail folder at Yahoo, and that is saying something.

          Amount of Spam in my Facebook stream today - one. And with two clicks of a mouse, I'll never see spam from that game again. People in my contacts list who forward spam have either long since been silence or unfriended. As with the S/N ratio you complained about, the problem isn't Facebook, it's your ignorance or unwillingness to use the tools Facebook provides to control Spam and S/N.
           

          Put your thinking cap on for a second. 75 billion. With a B. How can that possibly be true in reality? We are not talking Exxon here that makes something tangible that we are literally addicted too. This is based off credits and advertising revenue, both of which don't have a strong foundation, and can have a huge swing in profitability and volume.

          Sounds like you'd have reccomended that people keep their money in good solid buggywhip and horse feed stocks rather than investing in that new fangled telephone invention. And do I really need to point out Google's stock prices - and that virtually their entire revenue stream depends on advertising? No, you're not insightful, you're just spiteful. You not only don't get it, you proudly revel in how little you get it.

        • 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 mlts (1038732) * on Wednesday February 01, 2012 @06:24PM (#38896963)

          I'd add to your #1: Any info put on there can have very negative consequences. For example, if a profile scraper services sees a share or a like of a "hey, why do I need to press #1 for English?" picture, one is branded as a racist for seven years. Or if one likes tents or stealth camping, they might be branded as a supporter of OWS. A like of a smoking product can get one's health insurance company to demand a physical and bloodwork to see if someone's status changed. Liking of a park after dark and mention of that can get someone arrested months to years after the fact for criminal trespass.

          My recommendation to everyone who has an Android device: Download the app "Exfoliate", making sure you have the right app from Michael Devine. Set what you want deleted, let it log in for you, and let it run. It will likely take days to finish, and it uses a lot of bandwidth. However, it is worth it, so a post from several years ago doesn't haunt someone in the future. After cleaning the profile, find another avenue to post one's thoughts, preferably one's own website.

          Geeks know the danger about Facebook. In fact, I never bothered with an account until before I got my current job, where interviewers would ask me what my FB account ID was, and when I said that I didn't bother with one, I'd either be looked at like I was an imbecile, or explicitly told that if I don't keep up with social media, I'm too old to be in IT. So, I created accounts on the usual social networking sites with a nice clean persona, just to keep the HR droids happy.

          What would be nice would be a geek-friendly social networking site designed from the ground up for privacy and security. It would likely cost something for membership, but that means that the cost is up front, and not paid for by privacy (the subscribers are the customers unlike FB where the true customers are the advertisers, and subscribers are at best a necessary evil.) It would use an object based system with each object (be it a message, a photo, a +1/like, etc.) being encrypted with a key object list to decrypt it. This way, unless a person explicitly gives access to someone (and this includes the public), the piece of data is encrypted, with a list of keys of whom can decrypt it (one of the keys being an ADK for law enforcement stored offline.) This way, it would be a lot harder to compromise someone's personal messages, while providing the judge with the search warrant a reason not to shut the service down and jail everyone involved.

      • by oztiks (921504)

        Leaked financials ... Months before going IPO?

        Let me see is facebook taking their marketing ploys from apple now?

      • 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.

        And those who are sucked into a fad or bubble are often the last to admit that they were wrong.

        This time is different [google.com]

        In addition to Facebook being far more spammy than any email I've ever owned, the fact that it is popular with vast numbers of people does not mean that they can turn that into significant revenue - enough to justify $100 billion valuation would be quite remarkable when they've already jumped the shark.

        from the leaked financials last year facebook is making money.

        Gosh, I wonder who leaked those? I wonder if they were even real or subtly tweaked? Frankly

      • They filed the actuals http://sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001326801&owner=include&count=40 [sec.gov] Revenues of 3 and something billion and profits of a billion in 2011.
      • No idea where you got those numbers come from, but the actual numbers (from the Wall Street Journal) are $606 million in earnings on $1.97 billion in revenues for 2010, and $1 billion in earnings on $3.71 billion in revenue for 2011.

        That means 1) Facebook is making a lot of money, 2) Facebook has huge profit margins- about 25-30% profit, and 3) Facebook is growing very, very fast. Those are some damn impressive numbers. Assuming a P/E of 30 or even 40, which is reasonable for a rapidly growing, highly pr

      • guys, until you read 'running money' by andy kessler, you have no idea what a Tech IPO is, why it exists, and who benefits from it.

        hint: it's not geeks, it's not investors, and it's not tech.

      • 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.

        PLEASE, PLEASE, PLEASE, MOD PARENT DOWN!!!!! Facebook made a billion dollars in profit in 2011, *not* $250 million. Check the Wall Street Journal http://blogs.wsj.com/deals/2012/02/01/facebook-ipo-everything-you-need-to-know/ [wsj.com] . Just on principle, it pisses me off to no end that this moron is talking out of his ass about stuff he clearly knows nothing about, and has somehow gotten modded to a +5. There's not even an excuse, you could have found the real statistic in 15 seconds on Google instead of just maki

    • by timeOday (582209)
      Being snarky doesn't make you right. I clearly remember sitting around with all the other grad students before the google IPO talking about how it surely couldn't go up from there. It did. I also don't remember thinking Michael Dell was an idiot when he suggested Apple should fold. It wasn't a big deal at the time because it was a reasonable suggestion at the time.
  • 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...
  • Everybody put on your silly glasses and get drunk!

  • If you become a shareholder, will they use your name and address to spam you with adverts? ;)
    • Re:Shares (Score:5, Funny)

      by fuzzyfuzzyfungus (1223518) on Wednesday February 01, 2012 @03:46PM (#38894953) Journal
      No; but all the shareholders who aren't major investment banks get their dividends paid out in ZyngaCash and/or Facebook Points...
      • by ae1294 (1547521)

        No; but all the shareholders who aren't major investment banks get their dividends paid out in ZyngaCash and/or Facebook Points...

        NO I DEMAND BITCOINS!

        • Insufficiently 'Social', I'm afraid... Only systems controlled by a central corporate entity, answerable only to them, are 'Social'. This 'peer-to-peer' interaction nonsense just doesn't qualify.
    • by vlm (69642)

      If you become a shareholder, will they use your name and address to spam you with adverts? ;)

      I know you're trying to be funny, but yes, yes they will. For /.ers who don't own stocks, every year, heck some places every quarter you'll get a postal spam explaining how they love diversity and BS like that, its all balloons and unicorns at HQ, and they'd love it if you'd boost their price by purchasing more of their stock.

      Some of the most hilariously over-PR'd work I've ever seen has been certain electric company annual reports. What an amazing steaming pile.

  • $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.
    • ...when in reality the average Facebook profile is worth -$8.

    • by dgatwood (11270)

      Assuming a couple of bucks CPM, the average Facebook user probably sees at least ten to fifteen ads per day, or about $7 to $11 per account per year. And that may be a low estimate. It's not really that much of a stretch to assume that Facebook will still be popular in twenty years.

      And that's ignoring income from all other sources besides pure advertising.

      • Umm.... that's a HUGE stretch. Twenty years ago, people were still using CompuServe and Prodigy. Look what happened to them!

  • by cptdondo (59460) on Wednesday February 01, 2012 @03:42PM (#38894899) Journal

    I'm having a hard time figuring out how the investors expect to get their money out....

    Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

    And how will it make the sort of money needed to pay the investors?

    I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

    • Re: (Score:2, Informative)

      by Anonymous Coward

      It's an IPO. That's kind of the point of it. It's where the company's owners make a killing off of all the suckers who think they can somehow get in on "The Next Big Thing(tm)".

    • by residieu (577863)
      Not EVERYONE else. Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Barclay's Capital are all also going to make a bundle.
    • by grub (11606) <slashdot@grub.net> on Wednesday February 01, 2012 @03:50PM (#38895025) Homepage Journal

      Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

      Farms. Lots and lots of farms.
    • by CanHasDIY (1672858) on Wednesday February 01, 2012 @03:51PM (#38895033) Homepage Journal

      I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

      Well, you see, according to the largest private bank in the world, Goldman Sachs, that's precisely how Wall Street is 'supposed' to work. [rollingstone.com]

      Your logic and reasoning abilities have no place amongst the powers that be.

    • How do you get paid investing in a house? Investors get paid when they sell ownership of the stock to someone else.

      Stocks represent real money making assets. The day to day trading is a suckers game, but if Facebook continues to make money long term, the intrinsic value of the company will rise and the stock will follow.

    • by alen (225700)

      facebook is already making a nice profit

      the growth is not in users but marketing to users.
      1. people buy crap that they see other people using. all the apps like foursquare are there to bombard you with ideas of where to shop
      2. data. spending a million $$$ on TV ads for 18-49 age group is old school. 21st century is to target your ads to specific groups of people. facebook has the data to allow marketers to do that

      the other day i installed the shopkick app on my iphone. it's kind of like foursquare. i linked

    • by ackthpt (218170)

      I'm having a hard time figuring out how the investors expect to get their money out....

      Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

      And how will it make the sort of money needed to pay the investors?

      I guess I'm sort of stumped at the "business opportunity" offered here. At a guess, Z and 499 other shareholders are going to come out of this with a wad of cash and everyone else will be holding a deflated balloon in a few years....

      It's worth all that because someone believes it is. When the faith dissapates there may be some frowns.

    • Nobody is being forced to invest.

      Fools and their money were lucky to get together in the first place.

      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.

      • 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)

    • by lurker412 (706164)

      And how will it make the sort of money needed to pay the investors?

      Selling sock puppets, maybe?

    • They sell the shares after a week, before the average sucker notices what's going on.

      Isn't that the normal way to earn money from the stock market? Dividends are unlikely to even cover inflation.

    • by elrous0 (869638) *

      Facebook reportedly has, what, 10% of the world's population? What's its growth model from here?

      Three words: Remote African Villagers.

    • by migla (1099771)

      This is the ridiculously effective, self-informing privatized new STASI.

      The investors will get money from payments by the worlds rich power-elites (the worlds poor power-elites can't afford it), requesting whatever information they find pertinent to their particular cause.

      For now, it's mostly targeted marketing for corporations and the odd aiding in arrests here and there by goverments.

      Soon it will be spiraling down into the corporate fascist dystopia, where the rulers of the world will use Facebook to find

    • Add to that question, what is the ipo actually for?

      I haven't read the facebook prospectus, but usually an ipo is for a company to raise funds to implement some part of it's business plan.

      Facebook already had it's infrastructure, it already has a large user base.

      So what is the purpose of this 5-10 billion dollar ipo (other than for the current owners to cash out at the peak of the hype)? What does facebook need to do over the next couple of years that requires such a massive capital injection???
      • Assuming Facebook does not need the money to expand, the money raised will go to 1.cCash to Facebook for a rainy day, future acquisitions, etc. and 2. The current owners (cash out).

        I am assuming that Facebook is going public not because it wants to, but because it has to. Once a company has more than 25 owners / partners it gets tricky. Owners are leaving and want to cash out, new employees want to buy in and have an actually ownership stake in what they are doing, etc.

        I am going to assume this is going to

    • by vlm (69642)

      I'm having a hard time figuring out how the investors expect to get their money out....

      Are they selling enough shares to be theoretically bought out?

      I'm guessing no, $5B is not enough to be purchased.

      Most likely the hope is a "real" company, perhaps AT&T or some place like that, will purchase then for X*1.3 per share where X is the current price.

      Now, who would want to buy FB... A major TV network trying to be relevant in society again? Merge with clearchannel to compete with the ITMS and music.google.com?

      There's only a half dozen megacorps that control all you see and hear in mass media,

    • 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.

    • An advertising medium that reaches 10% of the world's population? (People who have money, mind you. At least enough to connect to the internet). I can't think of any other company (except Google) that has that kind of reach. I believe their IPO was $75/share.

    • by stanjo74 (922718) on Wednesday February 01, 2012 @04:28PM (#38895483)
      FB is the One Entity that knows about everything that happens in peoples lives. FB can do a lot more with the type of information they have than Google. I'm not saying it's moral, but nothing can stop FB from using the information any way they can make money, especially with new ownership (after the IPO).

      Examples:

      - Political parties spent $120+ on a vote last elections. How much would a political party pay FB to know the names and contact info of undecided voters or voters who seem to be able to influence others?

      - Your dishwasher just broke, you complain about it on FB. How much Sears or BestBuy would pay to be notified this same instance about your misfortune?

      - You buy a vacation with Travel Agent 1, go there to find out the hotel is a dump, you bitch about t on FB. How much would TA2 pay to know about this and contact you with an alternative offer?

      The possibilities are endless, especially for the new owners with zero moral standards like Goldman Sachs and the likes. The growth will not come from more subscribers, but with ever increasing ways to analyze the information flow.

  • by Anonymous Coward

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

  • by tekrat (242117) on Wednesday February 01, 2012 @03:51PM (#38895035) Homepage Journal

    If I recall, Google was almost $100 a share when it IPO'ed and I thought that was way too much. So I did not buy, because I couldn't figure out how they were going to sustain that.

    Well, I was quite wrong because Google went up to $200 then $300, then $400 and has been at something around $500 a share for the last 6 or 7 years. Crazy.

    So, I don't know what to think about Facecrook. On one hand, I find the company utterly despicable. On the other hand, companies that are utterly despicable tend to go up in value -- a lot.

    They are going to be the top dog in social media for at least the next 5 years, which is enough time to buy some shares, watch them go up in value, and then sell in about 3 or 4 years with no regrets if it goes up further.

    • I don't consider a factor of 5 or 6 extraordinary given the risk. Take a look at Intel or Amazon for their growth since they IPOed.

    • 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 pz (113803)

        Ahh, grasshopper, you have forgotten that it is entirely possible to make money from trading stocks in companies you don't like. Forget the political self-consistency that keeps you warm and fuzzy in a delusional bed at night, trading stocks is all about money. Period.

        If you believe in a company, that is a sure-fire indication that you should disqualify yourself from buying their stock, because it means you have a biased view. As my stock-broker cousin is fond of saying, people don't lose money in stocks

      • Since then, they've developed Android and have a good share of the cell phone market.

        Who's to say facebook won't come out with something that will dominate some other market? Google IPO'd in 2004 when they focused on search and email and sold advertising. Who would have imagined a google phone back then? The Iphone wasn't even released till 2007! The entire market for one of googles biggest products has been created "since then". Of course...thats not to say facebook will have similar success but thats what betting on the stock market is all about.

        Here's the major difference I see.

        Facebook focuses on messaging (email), sear

    • Share price is meaningless. What is important is market capitalization.

      What was google's market cap when it ipoed?
      • by zill (1690130)

        What was google's market cap when it ipoed?

        23 billion USD [washingtonpost.com]

        Remember, this was back in 2004, when Google was just a search engine. Gmail, Google Docs, Google Maps, Google Chrome, Google Earth, and Android did not exist yet.

        Google's current market cap is 188.77 billion. Is Facebook half as valuable as Google? I guess the market will soon decide that...

    • by vlm (69642)

      has been at something around $500 a share for the last 6 or 7 years. Crazy.

      Why? I have a treasury direct account where I can buy risk free USG bonds for a whopping 0.5% rate or so (well its complicated and depends on the length of time, etc) Pull the numbers for the mighty GOOG: an EPS around $30 and a growth rate around 6%.

      How much will it cost me to get around $30+6% next year if I buy riskless US bonds, answer, a heck of a lot. It only costs me around $600 to get around $30 next year, which is frankly not all that bad. Its risky, but not that risky.

      Note that we live in a ce

    • Anybody notice all the banks involved with the IPO?

      Facebook seems a perfect match for them.

  • 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 b4dc0d3r (1268512)

      Sort of. Extremely targeted advertising. They know not just your e-mail contents like GMail, or search terms like a Web/Image search.

      They don't just know everything you've ever put in a status, like "eating chimichangas tonight with the hubby!!!11!1eleventy11!" They know who your friends are, what your friends like. You can also follow politicians, entertainers, product pages... the possibilities are endless.

      This is the holy grail of what Google has been trying to piece together for years. Finally Googl

      • by forkfail (228161)

        Facebook has one of the biggest distributed computing problems in the history of... well, computing.

        Between development, server farms, etc - I doubt that they'd be the company that they are without that level of reinvestment.

        And if they cut those costs (as I'm sure that many of the new shareholders will want to see), they'll shoot themselves in the foot.

        Bezos was wise not to allow the shareholders to demand a lower burn rate with Amazon. If they hadn't and didn't keep reinvesting into the platform, they'd

      • by b4dc0d3r (1268512)

        I should know better than to trust a slashdot poster. If this is legit, it's a lot better.

        First 9 months of 2011:
        Revenue: $2.5 billion
        Operating income: $1.2 billion
        Net income: $714 million

        http://gawker.com/5866291/source-reveals-facebook-is-gushing-cash [gawker.com]

    • by geekmux (1040042)

      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?

      The only thing that is irrational here is peoples penchant for actually pulling out a real credit card tied to pay for a gallon of "virtual" gas to fill up their imaginary tractor to farm their e-veggies, or whatever other nonsense is on there.

      Now figure it only takes a fraction of a single percent of the entire population of Facebook to do this in order to generate millions in a single day, from a single game.

      Now, if you want to talk real numbers, we can talk about advertising...

  • At a valuation of $75B to $100B, how much can we expect Facebook's share price to grow? Apple's valuation is now at $400B to $500B, so maybe 5 to 10 times at most while there is a considerable risk for not much growth at all. The share price of Amazon and Apple grew over 100 times since their IPO but this can't happen with Facebook because their IPO is coming fairly late. So, while the IPO is a great day for early investors, it's not worth it for average investors.

    • The deal isn't any worst than buying Apple or Amazon stock right now. The growth potential is more modest, but it is still has higher potential of returns than investing in bonds.

      If you want to make 100 times the amount you invest in, you have to look for small companies that no one knows about that have the potential to make it big.

      • The deal isn't any worst than buying Apple or Amazon stock right now.

        That's right. But while Amazon and Apple probably are not going to grow 5 times either, they have a proven business model and they are unlikely to lose more than 50% in value. The same cannot be said about Facebook that depends for revenue heavily on a few partners. Therefore the risk/reward ratio should be much better for Facebook (to get me interested).

        • Facebook has a powerful business model too. It is able to deliver targeted advertising better than Google and has strong barriers of entry to prevent competitors from getting into the market.

          But all this talk on if it is a good value is meaningless if we don't know how profitable Facebook is now and its future plans for growth compared to the price of the stock.

    • by Sir_Sri (199544)

      More like the other way around. If they're IPOing this late they should have a solid balance sheet already. that makes it good for everyday investors and bad for high risk, high return ones. For every facebook that should have spent the last 8 years getting its business plan in order along with customers and so on there are 100 never heard ofs that took VC, and imploded. Facebook *should*, even if their balance sheet isn't great, have a plan on how to convert that IPO money into revenue, which is what

  • I hope they have a huge successful IPO.
    I hope the share price takes off like a rocket.
    I hope the Koch brothers and every other Gordon Gekko pumps their "hard-earned money" into the stock.

    And then I hope that it tanks harder than MySpace in the hands of Rupert Murdoch.

  • 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.
  • There goes all of your oh-so-valued privacy at Facebook, now that they've got stockholders to answer to.

  • It will be interesting to see audited numbers from Facebook. Look for deferred expenses, future revenue accrued in the present, and expenses being capitalized.

    The classic is that AOL capitalized their free AOL disks, rather than treating them as a marketing expense in the current year. When the SEC caught them [sec.gov] on that, they had to restate several years of financials, and it turned out they became profitable six years after they said they did.

    Groupon had similar problems [wsj.com] with accounting for marketing

  • Now you have to deal with quarterly Sarbanes-Oxley controls.

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