See that bubble?
It's bursting it is.
Facebook shares hit an all-time low in early trading today as the lock-out period ended for inside investors, freeing them to offload 270 million shares. The lock-out period, when inside investors are forbidden from trading their shares to give a recently public company a headstart, finished today, increasing the available …
It's bursting it is.
The only thing that's bursting are Reg readers' trousers as they rub themselves thinking about FB going bust
Why exactly? I use it everyday, so do alot of people. Nobody wants to go back to myspace.
Seeing the greedy and/or stupid loose vast sums investing in well proven dodgy business places is always amusing tho.
But should FB vanish one day, I'm reasonably sure somebody else would spring up offering exactly the same thing (or even G+, which I think is maybe technically better, but just suffers as everybody else is still using FB).
Contrast this with Google vanishing from the face of the planet one day, and I'd be utterly stuffed.
It is, after all, the reinste Freude.
I wish them no ill will but let's face it apart from the prospect of reaching 1 billion punters with shitty adverts what else did FB really have to offer anyone? FB have been testing a new ad model and there's already a big stink being kicked up about it which will knock the share price again.
FB stock may not be worthless but it's certainly not worth the paper it's printed on!
"FB stock may not be worthless but it's certainly not worth the paper it's printed on!"
Maybe they should have printed it on Andrex?
Firstly, a falling share price has little or no direct effect on a company as along as it is not preparing to raise equity or borrow. It is in no way a disaster even et 50 % of issue price Facebook is to big to be bought and the CEO still holds the majority of shares.
Secondly, $7 - $8 would be fair value in comparison with other US stocks at a 20:1 price-to-earnings ratio. So, much as I don't value the service, there is no need for anyone to worry. Apart, of course, for those who bought shares at over-inflated prices. More fool them.
I'm starting to think that even $7-$8 would be generous. As of the last filing there were 2.14 billion shares with 1.14 billion floated. Their book/share value is $6.22 for the most recent quarter which would indicate $7.50 or so being a fair price at the P/E you state. However, if the number of shares floated went from 1.14 billion to 1.41 billion with another 1.447 billion due to be floated by the end of the year it makes the total number of shares close to 2.86 billion shares and not 2.14 billion. That would put their current book/share value nearer the $4.65 mark and making a fair value closer to $5.50-$5.75 per share. Granted, this doesn't account for any increase in book value which may or may not occur and as a "tech company" price often runs 3x - 4x book/share until every now and then when the traders sober up and a bubble is declared and popped.
"However, the inside investors are usually big boys and girls, who hold their nerve a bit better than private investors. "
However, as inside investors they likely know things we don't about the likely future cashflows of the company and whether people inside are a bit worried hence may like to ditch their holdings whilst still above zero.
I mean, could they not just short their own stock? Sell the stock at $40, make close to $100 billion (estimated up there for simplicity), then when the share price hits $10, buy it all back for $25 billion and pocket the $75 billion for yourself!!! Great lesson in how to print money. :D
If a mistake was made in that example, please say instead of downvoting.
I'll bite. From a layman's perspective, there are two problems:
1) The inside investors have already paid for their stock; that's why they're called investors. You can't short-sell what you've already bought. However, even if you could . . .
2) Regulators probably tend to take a dim view of shorting (or trading of any sort in the stock) by an inside investor due to it being--wait for it--*insider* trading. The minimum penalty would probably be significant fines plus disgorgement of profit; the maximum probably involves Federal PMITA prison.
"If a mistake was made in that example, please say instead of downvoting."
That's not how it works. If you speak out against Apple, MS or FB the shills/fanbois appear and just downvote. Don't expect much in the way of correction or discourse. The shills hold a point of view based on faith, not on facts.
There may be Apple shills, there may be MS shills, there may be all manner of fanbois within and beyond both ends of the visual spectrum, but one thing I've never noticed on the Reg is a FB shill.
I thought that any given Reg reader's view of FB sat somewhere on a continuum between grudging toleration and downright hatred. I've never seen any FB advocacy, but life is full of surprises, I guess...
Even at today's share price, FB is still worth $50b. That's about what Goldman Sachs valued it at in January 2011. Anyone who got in before then could still be making a ton of money, even at $19/share.
What will be interesting is to see if these early investors sell or not. If they're selling, it's because they don't think FB has much more potential, and they want to take their profits and run.
>Anyone who got in before then could still be making a ton of money, even at $19/share.
They've already made their money, now its time for others to cover that windfall.
It is important to have a walled garden where people can share their inspirational thoughts, pictures and mood swings. Otherwise we'd all risk being exposed to that content again, like when we used to get it by email...
In a perfect world they could build a completely parallel network, like they want to do in Iran, so that the individuals that are part of it have no way to interfere with this side of the Internet.
It's quite easy to hit an "All-time low" if your stock hasn't been around enough to have taken "the plunge" before....Shame Facebook's stock looks more like a park slide than a rollercoaster...
Exactly - it's really only ever gown down so it's nearly always at an all time low :)
The passage of time is at an all time high too...
sell useless stock for $fuckloads then laugh when society collapses under the weight of all the different scams youre pulling
there will come a time when it is not just morally ok to kill these people but morally imperative.
He must be nearly bankrupt by now after having to pay 35% of the original price as tax.
That may be 87% of those who saw it, but isn't an overall majority so we're going to ignore it
It'll soon be ripe for Microsoft to buy it then watch the users leave by their millions after they 'rebrand' it every five minutes.
Hotface MSN Face Windows Live Book Outface.com
Modern UI Facebook
You forgot myface.
Then you can invite people to "come on myface".
They'd probably just change the "My Network Places" icon to "My Social Network Places".
Cheers, I needed a giggle.
I obviously had to click the Like button...
The value of shares can go down as well as up ... bitch.