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back to article Zuckerberg loses $8bn in Facebook IPO fiasco

File this under "Problems you'll never have": Facebook headman Mark Zuckerberg lost over $8bn of his net worth due to his company's wretched IPO. This news comes from The Forbes 400, that magazine's annual list of the 400 richest Americans. This year, Zuckerberg sank from 2011's ranking of 14th on the list with a net worth of $ …

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Anonymous Coward

I don't think it can be regarded as news anymore.. We all know Facebook is heading for a miserable end.

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Anonymous Coward

Three years

It will be sold on to some newspaper group who still think it is worth something.

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WTF?

I wouldn't mind bringing to market a product that meet such a "miserable" end.

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Anonymous Coward

As long as your not the one left holding all the chips when the music stops it's a winning formula.

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Thumb Down

Really?

>>We all know Facebook is heading for a miserable end.

Do we? Facebook doesn't exist in isolation, for many people it has replaced forums, review sites, email, personal websites, blogs, photo scrapbooks, all these things have a market, bebo, myspace were destroyed in less than six months by Facebook, even if Facebook lost 90% of its users it would still have more users than either of them ever had (put together).

The only way Facebook would have a miserable end is if;

1. Something bigger comes along

or

2. They destroy themselves (e.g. paid membership)

The "value" might be slashed in half, the magic money that IPO's produce might vanish, but all that advertising, infrastructure etc. will be used, you might not use Facebook, you might have used it, got bored etc. but it's not a pyramid sale that has to grow to survive.

I remember using Altavista before Google, it was pretty good, but it didn't grow the way Google did, if it did then Google wouldn't have come along, Facebook is the same, I don't see Google being replaced as "the search engine" (despite clever ones like Wolfram), and I don't see anything to challenge Facebook (yet ;-)

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My mate Vince reckons that my ability to burp popular music anthems is worth a good $10bn

This is at least as accurate as the principle used to determine Groupon's value, so I'm expecting a call from Forbes imminently.

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Joke

Re: My mate Vince reckons that my ability to burp popular music anthems is worth a good $10bn

Don't knock Groupon, I just got a message from them offering me a Brazillian Blow Dry :-)

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Bronze badge

I'd like to know why the price is rising

Went for a steady slide then bounces. Are people still dumb enough to buy in, or is some price manipulation occuring?

Sniff that rum, me hearties. Or is it the smell of someone trying to launch an internet mini-meme.

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Silver badge

Re: I'd like to know why the price is rising

It's known as the "Dead Cat Bounce" (ie it's said that even a dead cat will bounce if it falls far enough)

There's always someone willing to look at the long term investment prospects and consider a share like that worth a punt even if it takes several years to recover its value.

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Re: I'd like to know why the price is rising

Many 'dead cat bounces' are the result of 'short covering' which occurs when traders who sold the stock short at a higher price now buy the stock back more cheaply to close their positions and take their profits.

More profiting on the hapless stock of FaceBook? Well, there are many ways to skin a cat. We have seen a couple so far. But the show isn't over yet.

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Re: I'd like to know why the price is rising

yep- Dead Cat Bounce. Those that sold short are currently buying to cover their trades.

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Who knew all that paper wealth wasn't worth a damn?

Oh... everyone? Never mind then.

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Anonymous Coward

The Zuckerberg as Hitler skit

... has anybody made it yet?

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Go

Re: The Zuckerberg as Hitler skit

Not that I am aware of. However, a downfall paraody of a certain leader in a bunker realising his Facebook shares are half what he paid would be rather funny.

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Re: The Zuckerberg as Hitler skit

Yeah, about as funny as the other hundreds of Der Untergang subtitle parodies.

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Anonymous Coward

Re: The Zuckerberg as Hitler skit

LMGIFY

http://www.youtube.com/watch?v=wPvF97_q00s

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JDX
Gold badge

He hasn't lost anything

It's not real when it's shares, doubly so at IPO time... that was merely a guess.

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Re: He hasn't lost anything

Not only that, but the new figure is post-IPO and so some of the "losses" (on wealth that never was) have been crystallised, resulting in a far more accurate estimate.

Basically the story here is that Forbes over-valued this guy by 8 billion or so (so the previous estimate was about 50% too high) and have now been forced to admit it. But hey, what's a 50% error between friends? We still trust everything Forbes says, right?

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Silver badge

Re: He hasn't lost anything

The Sunday Times Rich List did something similar with TomTom- Over valued them one year and placed them in the rich list and then next year decided that their paper wealth actually wasn't worth that much

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Anonymous Coward

Re: He hasn't lost anything

Forbes list, like Gell-Mann amnesia, you know its wrong then turn the page and believe everything again, forgetting that you just read utter toss.

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Meh

Not that much of it matters since the Fed has embarked on QE3 in an effort to further devalue the dollar. I guess Ben thinks that reflation is what the bubble needs but doesn't quite get that the bubble done burst and now he's driving a submarine.

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The economy (any economy) won't feel the effect of anything the Fed does today for at least another two years. That's how this works in the US, much the same as the BOE in the UK, or any other comparable economy. Without justifications your statement has about as much cred as the weather report.

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Silver badge

Inflation helps those in debt because it decreases the burden of debt. You can therefore be confident that when governments are in heavy debt, inflation will increase one way or the other.

It's a double win for homeowners — those with the most burdensome debt most people will ever experience — since not only do their wages go up to make their mortgage repayments look smaller but the value of their house goes up so that not only does the bit they already own scale with inflation but they get the benefit of the inflation on the bit they don't own.

In summary: unusual increases in inflation is to redistribute wealth from lenders to borrowers.

So inflation is a short-term pain (wages being a trailing indicator, unlike the price of bread) and becomes a serious problem if it goes on long term (lenders factor it in, debt becomes harder to obtain, the economy slows down) but in the medium term it's good for debtors.

In the US — similarly to most western nations — more than two-thirds of properties are owned by the residents. That means that inflation, if controlled, is a good thing for the majority of people even if it doesn't immediately feel like one.

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Silver badge

It isn't just inflation, let's not forget the international impact of printing $40B per month. It means that in order to remain competitive everyone else has to do something similar or their economy will stall. Compare the Yen which was over ¥100/$ before the first round of QE and now it's all of ¥78/$.

Now look at seniors who are looking at retirement and watching their nest egg evaporate. These aren't people who really have a long-term interest like most of the debtors do. Even Greenspan had to admit his surprise at how ineffective the past rounds of QE have been. Sure it drives the stock market up because nobody wants to be holding cash as the dollar value plummets but it doesn't change the facts.

I don't believe Ben is going to get his reflation because the economic data is so bad. The reports are trickling out and even oil has taken a hit because supply is plentiful and demand is low even with the low and dropping dollar value. I see it everyday on my morning commute which has steadily gotten easier over the past year. We may get stagflation but the road we're on seems pretty clear, double dip ahead.

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and the Jobs fortune?

or is it still too soon..

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The only possible downside to this is that Zuck is one of the few billionaires who is a signatory to 'the Giving Pledge' and now has less to give.

Aside from that, hahaha

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Devil

Where is a 'like' button...

...when you need one?

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Philanthropy

It's nice to see that Bill Gates has given a decent amount to charity, especially through the Bill and Melinda Gates Foundation. There are a few other well-to-dos who could follow that lead.

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Go

I am worth...

I am worth -4963 USD at the moment. That must put me on some list. But I should give Bill Gates the heads up when I bypass him about 15 years time if everything goes according to my plan (it never does).

The plan is simple. To own in hard cash 1 to 100tn (€) euros in the bank.

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Facepalm

Re: I am worth...

You trust the bank with your money?

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Go

Re: I am worth...

No. But when I am rich enough to own the bank. It is not going to be an problem. For the moment. I have no option but to trust the bank.

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I don't think this short covering rally in FaceBook is a dead cat bounce

The real 'dead cat bounce' usually occurs when a company is going bankrupt. The stock which was a 'high flyer' is barely over a dollar and there is no good news. After it hits sixty cents -- depending on the size of the short position -- there may be a serendipitous rush to cover. Suddenly the fall is halted. Then traders who play 'dead cat bounces' move in and start buying this now worthless penny stock.

Some of the shorts are covering and the 'dead cat bouncers' are buying and the worthless stock starts to levitate. Suddenly rumors are afoot that there is a white knight coming on a charger and a check book. Many shorts who shorted the stock at $20 or $30, have no scruples about covering at 40, 50, or 60 cents more than the stock's very recent low.

The stock is back up to $1.35 and the traders who jumped in at .60 cents have doubled their money and are selling to those still covering their shorts and to those who believe the rumors about the knight.

A few weeks later the company announces bankruptcy. The cat is dead.

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Paper loss at best...

Old Zuck will be just fine but the little investors are the ones who get hurt in this situation. That's why it is far batter to get involved pre-IPO if you can and even better if you can do it with no money at risk. For example, service providers can use Stock4Services.com as a way to get equity in quality emerging companies just for performing their services. This way is no cash risk and still pays off if the company goes gangbusters.

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