“Facebook Inc. FB -11.30% shares plunged on their second day on the stock market, a black eye for all those involved with the social networking company going public,” the Wall Street Journal is reporting.
“‘The underwriters completely screwed this up,’ said Michael Pachter, analyst at Wedbush Securities. ‘This thing should have been half as big as it was, and it would have closed at $45.
“While investor enthusiasm early on was high for Facebook shares and while bankers on the deal increased the stock price and number of shares ahead of the offering, many observers questioned the valuation of more than $100 billion that was placed on the social network, where revenue and earnings growth were already beginning to slow.
“The shares fell 13.7% early Monday before pulling off the low.
“Facebook’s IPO priced at a level well-above where we foresaw compelling 12-month returns,” BTIG analyst Richard Greenfield said in a research note Monday. With revenue and earnings growth decelerating in 2012, “we find Facebook’s current valuation unappealing.”
The rest of the article is here.
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It would have been a nice short. Might still be a good short. Of course, that’s just speculating, like betting the stock will rise to $45
I’m optimistic long-term, and will consider at the stock if it drops another 10 percent. There will be “professional” management soon, I suspect, just like when Google went public. At some point, the mass popularity of the service can be “monetized.”
I totally agree with you, Jeff. Facebook is a “buy.” It’s all about the eyeballs, and the adults will be arriving soon.
I’ve had a good laugh listening to so-called economic experts talk about Facebook losing steam over the next year. Clearly they have not observed young people staring into their tiny screens, the serotonin squirts into their brain pan being as evident as any addict pumping opiates into her veins.
BTW, longtime hard-right blogger Russ Steele is showing his ignorance about financial matters here:
http://2012nevadacounty.wordpress.com/2012/05/21/gov-brown-call-your-office-facebook-shares-plunging/
Russ doesn’t seem to understand that Facebook rank-and-file and “insiders” — California residents — sold their shares before the public IPO and that capital gains taxes and sales taxes will be recorded regardless of what is happening in the “retail” market.
http://sierrafoothillsreport.com/2012/05/17/facebook-ipo-fuels-bay-area-spending-boom/
In fact, we spoke with real estate agents in Tahoe this weekend who confirmed the new action.
This is all good news. Nobody ever said the Facebook IPO would bail out California.
All too often, we let the rigid political ideologues like Russ “analyze” matters for us in our little, rural county, carrying undue influence over the “electeds” and others. They are always “negative” and often “nasty.”
It’s time for a new era of thinking. And I hope this June’s local elections will once again confirm a shift away from the “old guard.”
The internet is changing how we communicate, providing a forum for diverse views that reflect our diverse demographics.
Never have been a big player on the market, but what I have invested has been important, As a teenager, when thinking of a career in finance–wall st.–a family friend and stockbrocker sat me down and, basically, talked, maybe scarred, me out of it. When I have made some money, it has been on stocks I’ve picked because of something I readm my best pick being Bed, Bedroom & Beyond (or a chain named something close to that.) But when taking the recommendatons of brokers has usually been neutral to disasterous, particularly the broker who pushed AOL on me @ about $76 a share. The transaction was completed in seconds. Two days later, the merger with Time/Warner was announced and the stock began its freefall. When it hit $50, I went back to him to sell and buy some others. I bought the others, but he said, “Oh no, don’t sell AOL, it’ll recover, etc., etc.,” So I bought another 100 shares and again the transaction was completed in less than 30 seconds or so. The speed of the completion of these transactions amazed me. But, as I’m sure you all know, the freefall continued. I think AOL/Time-Warner bottomed out around $10 +/-.
Then I read somewhere, or a co-worker much more savvy in the ways of the market (a good guy, thou we were polar opposites re. politics, religion, etc, but we could talk, listen and be friiends) suggested that the broker was probably pushing AOL because his firm–a big one whose name I forgot–had a large holding in AOL and was selling off its inventory–thus the speed of the transaction and the broker’s very aggressive recommendations the first time I bought and buying more instead of selling the second time.
When I sold my bungalow near the beach and moved to G.V. in 2005, I also sold every stock I owned. I know one fault of mine has always been that, historically, I tend to bestow trust upon people whom haven’t earned it and I came to believe this guy scammed me. I should have done more homework, so share the blame. but this behavior is why I left the world of business. The ethics of Wall St. “trickle down”, which seems to be the only trickle in supply side economics.
Now, my only investments are what CalStrs has in its portfolio, making me some kind of ex-union demon-cause of all the nation’s problems, (or similar words of character assassination per one fire breathing local blogger.)
I’d never trust a broker from one of the big houses again. Don’t mind taking risks, but the AOL experience smelled like a barrel of putrid fish.
And those boys and girls working behind the wall the Dutch built hundreds of years ago, keep on feeding their inflated egos, gambling with other peoples’ money, screaming Communist at any sensible person wise to their ways, wanting to rein them in.
Derivitives isn’t a four letter word, but it should be.