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February 01, 2012


Ahab Qvetcher

What I am reading is to be interpreted as "Don't buy Facebook stock." It is always the little footnotes that get you, isn't it. O h by the way if we lose 12 % of our revenue we may have a problem. Could be grim.

Pussycat Catnap

NPR was abuz on this this morning as I was waking up. Didn't hear everything, but caught a comment that the valuation of this companies on the market right now assumes the account for 1/5th of all the advertising revenue on the planet - for the entire human species... which is well, slightly more than the actual business they manage to do. :)

SL makes money hand over fist, both for itself and others. And it can be entry level money for the savvy person. Facebook makes money for corps, less for 'small time mom and pops', and it does so at an invasive cost to personal rights.

Desmond Shang

A few predictions.

1) Facebook will flee California in fact, if not in corporate letterhead, once it becomes a public money game. Notice what Google and Apple quietly do. Wouldn't be surprised to see them offshore someday.

2) Not that they will last. Friendster/Myspace/Facebook... it's a lot like Oldsmobile/Buick/Cadillac. What are the odds that the driver of the Buick in front of you has white hair? The kids won't be on mom's facebook for long.

3) It's all about hiding profits ~ I don't believe their statements until a 3rd party audit has been all over their operations. State of California is salivating over this one, the state loves IPO's and the revenue they bring.

4) Did you hear the hot tip? AOL and Time Warner are going to merge and totally dominate the future!!!! Oh... wait, that was a decade ago and we already know how that went.

Ann Otoole InSL

If you have spare money then buy a block and wait until half of it is worth what you paid for all of it. Sell the half and get your money back. Then parlay the rest into risky profit. You will not loose money. That is how this works.

Celestiall Nightfire

RE: The FB games, I have them all blocked.

@ two sons friended *me* on facebook. I would not have sought that, as it would have put them *on the spot*. But they initiated it So, not all children shun their parents.

@ Pussycat: Can you explain how FB makes money "at an invasive cost to personal rights."?

Being on FB is a voluntary action. No one is forced to use FB. Plus, I *am* on FB, and have yet to see my "personal rights" invaded.

When someone says that an entity makes money for a "corp", and says it with disdain, they must not understand what a corporation is. It is shareholders, lots of them. They are individuals, single people, couples, kids, retirees, they can be anyone. A corp is not some evil inhuman monster sucking the life-blood out of society. It is more analogous to a co-op than a regular business. Shareholders split profits, vote on decisions, and can even takeover.

Ahab Qvetcher

We see how well that worked with Enron, Ann Otoole.

Historically, back when Benjamin Graham was showing Warren Buffett how the value theory of investing worked, IPOs tended to lose money. There was an initial upsurge of hype, and then a decline in valuation. Some of the companies won and made money over time, and many went away.

Of course, we see the vast number of first generation internet IPO's that are still with us. They had a new theory of valuation that was going to set value investing on its ear, because it didn't matter if the company turned a profit, it would make it up on volume. So the IPO allowed it to expand and burn through its money even faster.

When I see comments like, 12 % of the revenue comes from one source with which there has been a rocky relationship or the valuation depends on 1/5 th of the total advertising budget of some astronomical thing, I immediately think in terms of sealing up the wallet.

Before everyone jumps me, I know about Google, and have kicked myself for ignoring advice to buy. But it is the exception not the rule.

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