Facebook Stock Going Public? 118
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."
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.
Re:hmm (Score:5, Insightful)
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Facebook cleared a profit recently (September) and have a huge user base, I don't see it disappearing anytime soon.
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Name any IT company that has been at the top of its field for longer that 10-15 years....
Then sit down and ask why the stockmarket uses 8-10 multiples of earnings to value IT companies.... I can't answer this one.
Then sit down and ask why would you buy into the IPO as a long term investor. Give it 5 years and people won't remember it.
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Re:hmm (Score:5, Interesting)
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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I've never understood the "gifts" thing. Someone pays a buck or more to slap a graphic onto someone else's wall.
Maybe FB could do something more meaningful with that, and have the ability for the recipient to get a serial number that is useful for something online, like $15 at iTMS, a month's free play time on ClicheQuest, or for brick and mortar shops, have the ability to print out a one use barcode that can be taken to shop for a store credit. End result is that people get meaningful gifts, FB gets a cu
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Facebook now offers actual gifts through their gift system. I still don't see anyone actually using it. I just sent gifts to people when they were free to clutter up their page.
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So, inventing your own currency, eh? Fed and banks don't like that, and there are enough laws in the book to put you in jail.
Have you heard of *any* legal exchange of virtual money and real money? No. It is not doable. Maybe it is doable if you have enough money, connection and experience to clear all the hurdles - then why don't you just open a good old bank.
You've never heard of Second Life and Linden dollars, as one of many examples?
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Oh, for the love of god, I hope you're right!
Unfortunately, I think companies interested in finding EVERYTHING out about their potential employees would fund it just to keep it around.
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It is much easier to make money (at least to cover costs) from a facebook game where you run a restaurant than a flash game on runyourownrestaurant.com. The players are already there and the advertising infrastructure is already in place to give decent payouts.
Facebook's real income must come not from adsense style pay per click style ads but rather from having
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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Facebook is definitely no Google. They have been successful primarily due to their rate of adoption.
They provided unique useful features to attract people (social networking).
But now social networking sites ala FB are a dime a dozen.
It remains to be seen how robust FB will be against competition in the long term.
What value does FB provide to its members that another social networking site is unable to?
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But now social networking sites ala FB are a dime a dozen.
I think it is only a matter of time until some more open, perhaps distributed networking system will emerge.
Right now, FB is tightly binding its users to itself, but with a more open system, users could move freely from implementation to implementation.
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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Here's an interesting thing they could think of. Ask users to pay a small monthly fee to see who views their profiles
You've been subscribing to too many porn sites. Facebook is a social networking site (keep in touch with existing friends/family or meet new ones to play) it's hardly a dating site. I wanna dare and say that the majority of people has privacy setting on, you cannot see past the name and small photo, therefore no one can see their profile in full. But Facebook has an infrastructure that allows for apps and many users use them (if not all of them) so they could charge for some of them (like the stupid birth
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.
Major flaw - anonymity desired (Score:2)
Under your plan, suddenly no one will casually browse other peoples' profiles. Maybe I'm just paranoid, but I wouldn't be comfortable browsing profiles if I knew they might know (even if they're good friends and it's perfectly benign) - and your story about picking up a girl illustrates the point.
If she was actually interested, then yeah, that's valuable to both parties - they'll both know the other person's probably interested. But what if the girl wasn't actually interested, and just is in the habit of ac
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There already are sites that will let you see who looked at your profile, so it's not a novel thing and it doesn't start a whole new era of creepiness.
Actually, thinking about it, this shouldn't even be hard to do on facebook. There's this magnificent API, embeddable into profile pages... Methings I just might try something out tonight. Wouldn't want to make the app public as it's against facebook rules, though.
Back to topic & bad analogies: Seeing a list of whom looks at your profile is like the mirror
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http://episteme.arstechnica.com/eve/forums/a/tpc/f/599009962631/m/750009712041 [arstechnica.com]
http://www.aom.pace.edu/amle/AMLEVolume4Issue1pp75-91.pdf [pace.edu]
http://www.rose-hulman.edu/~christ/vfecon_asee2008.pdf [rose-hulman.edu]
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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....
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Companies have a lot of leeway in deciding what will maximize profitability. Some companies ke
Private vs. public doesn't make difference. (Score:1)
I second Phat_Tony's response to you, but I have to add one really important fact you're missing: private vs. public isn't relevant for this. All corporate officers, be it at private or public corporations, have a fiduciary responsibility toward the shareholders.
To your credit, though, in private corporation the shareholders and the officers tend to overlap a lot
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*
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You mean...
You're not...m-m-m-my...friend?!
*runs away sobbing*
Cheer up... you're a friend of my friend. *poke*
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Yes that's my point. Since when was Facebook? Everyone I know uses it to keep up with their existing friends, and the idea of that being imaginary seems nonsensical. I never saw it as a place to meet new people (as opposed to say, OKCupid, which are clearly aimed at that).
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Maybe you don't, but most Facebook users I know have much more online "friends" than IRL.
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Would you care to elaborate on that?
Many of my "friends" on facebook would barely qualify as "acquaintances" in real life, but I don't think there's anybody whom I've never met and still friended. I, too, don't see how Facebook is a useful tool to meet new people. It's quite great when it comes to keeping in touch with people you mightn't otherwise call or write to, but that's mostly it.
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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Try a Roth IRA--taxes get paid up front, no taxes are taken at the end*. Also try investing with a company/fund that diversifies risk. And if you don't like that company, move it.
*Sure, they could change their minds, but you really don't want to fuck with the survival money of old people. Many have firearms and figure they've already lived a full life.
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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
Those two things are orthogonal. (Score:1)
IRA and margin accounts are two orthogonal things. An IRA is a tax-advantaged retirement savings account, and an margin account is an account that allows you to borrow against your securities. There's no legal reason you can't have a margin account within your IRA.
Don't actually do it, though. Margin accounts are mostly ju
No, don't quit the 401(k). (Score:2, Insightful)
401(k) plans may suck, but you're investing pre-tax, and your employer may be matching your contributions, in which case you'd be leaving money on the table by not participating. Over the long term, the investment return on the tax savings and an employer match are more important than the mediocre performance of your employer's sucky 401(k) plan. Here's better advice:
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Re:Of course it's going public (Score:5, Insightful)
And pets.com, and webvan, ...
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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Did you invest in this one?
http://finance.yahoo.com/q/bc?s=LNUX&t=my&l=off&z=l&q=l&c= [yahoo.com]
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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 :)
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It is easy.
Had I actually bothered investing in stock this year I would have at least doubled my money this year.
Reading slashdot and other tech press does give you an insight into this industry far better than fund managers have. Or the rest of the traders that, at the worst of the crash, clearly missed out on simple facts like big, cash rich, debt free corporations like IBM, Apple and MS were not going anywhere because of some petty recession, and as a result were seriously undervalued.
It's just very hard
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They'll "go public", the owners (founders and other investors) will make out like bandits
Perhaps not - they need to pay off their incredible debts first. Personally, I think this IPO will happen because investors want their money back ASAP. FB has only recently started making as much money as it spends. That's incredible. So it's a long way off providing a return to their investors who, considering the following points, probably don't like how it looks:
- Overall, users see FB as "made for them", and free besides. Certainly not equated with spending money. It's so good at doing what it does,
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It's at the peak of it's popularity and thus the peak of it's perceived value.
It is at the peak of it is popularity and thus the peak of it is perceived value.
Hmm...
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.
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The Newscorp?
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I don't know, she just said she heard on the news it was bad so she disapproves of it and anyone who uses it.
I asked her what, specifically, and she couldn't answer. Nobody ever can. What happened to well-reasoned arguments and real thought when it comes to opinions?
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Theres plenty to hate about facebook. The unscrupulous app developers, the slow gnawing nature of giving up some privacy for some functionality, the insane nature of having rapid access to others completely vapid thoughts, disagreements with the direction the company wants to go toward(as seen by their user agreement moves), or just hating the population in general and not wanting to be anywhere near them.
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).
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It is a necessary step for the ultimate merger of YouTube, Twitter, and Facebook.
The resulting company would, of course, be called YouTwitFace.
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Good point in discriminating between mandatory and voluntary. Mayhaps I should have not phrased it as such when I wrote it. Still, I personally believe a company's founders would be foolish to not make such a restructuring before a split. I suppose they could simply allocate themselves massive amounts of stock before and IPO under which the stock structure has all stocks equal. Doing it in classes gives them, among other things, the ability to put present an illusion of the [founders'] amount of stock being
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 /.
Re:Who needs facebook (Score:5, Funny)
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People who want to get laid?
impossible. people on facebook are too busy growing crops in FarmVille or doing epic crimes in Mafia Wars or making creepy comments on attractive friends-of-friends's photos to have time to have mere sex.
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Slashdot likes it (thumbs up icon).
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.
WTF (Score:1, Interesting)
Thanks, asshole, for referencing an article behind a paywall. (Yes, I could pay $1.99, but NO I won't. WSJ is not worth it.)
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Thanks, asshole, for referencing an article behind a paywall. (Yes, I could pay $1.99, but NO I won't. WSJ is not worth it.)
{shrugs} I got to it just fine without paying for it. I don't remember exactly what I did to get there when I was briefly researching the topic before posting it, but it worked and I didn't pay for anything. If you're really that worked up over it, perhaps you should have looked a little farther in the Internet. Various newssites (few of them pay sites) had articles on the same topic.
Next time you call me an asshole, please refer to me as "The Asshole." There's more than one reason I play the trumpet.
{tips
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 SEC doesn't care if it is confidential or not. If you know about an impending IPO and you tell someone, and they act on that information by trading, you're tipping, they'll bust you.
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What? Should Slashdot be sued for "tipping" because an article was posted here about it? What about the Wall Street Journal, for writing about their stock reclassification? Sue them too?
When it goes public, everyone has the same opportunity to buy it, at the same time no less. What kind of advantage could one gain from knowing about it ahead of time? It goes public when it goes public, not one minute beforehand.
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The stock reclassification is public knowledge, as is the existence of that WSJ article. The original poster in this thread claims to have insider knowledge obtained from somebody in the employ of the company. Those are very different.
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If you know about an impending IPO and you tell someone, and they act on that information by trading
And how exactly would you trade this information? Facebook isn't publicly traded (yet), so I fail to see how you could use this info. Sure, you could short competitors, but I can't really think of any.
Why all the haters? (Score:1)
The default security isn't bad, and don't play the stupid apps. I'd pay $39.99/yr to lose the ads, with that they could build infrastructure.
The recent Live/News feed debacle prompted me to buy a new dead-tree address book to fill in. I hope they don't go away, but want to remain in contact with a few good friends if they do.
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
take the money and run (Score:2)
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.
Translation: a few people well-connected with the founders and some VCs will make off with most of what money there is now, while the getting is good. Everyone else, like the employees that were enticed to go to work for FB with promises of "valuable stock options", will get diddly squat.
Facebook might not even IPO, they might sell out to someone like Rupert Murdoch, with the people holding the better class of stock getting a hefty payday, while everyone else will just get a handful oh-so-valuable shares of
Common vs. Prefered (Score:2)
Isn't that the difference between Common Stock and Preferred Stock? Common is an actual percentage of ownage, while Preferred is a dilutted slice of the pie. I've vested and exercised 1/2 of some preferred options on a low cents amount, although the company chooses to remain private, hence, I effectively loaned them money at best.