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Facebook To Go Public On Friday, May 18 182

Posted by samzenpus
from the for-real-this-time dept.
redletterdave writes "The IPO on everyone's minds for the past few years — and possibly the biggest one in history — is upon us: Facebook will finally make its Wall Street debut on Friday, May 18, 2012. Sources also say Facebook will begin its IPO roadshow on Monday, May 7, and will eventually list its shares on the Nasdaq (not NYSE) with the ticker symbol 'FB.' Facebook looks to raise anywhere from $5 billion to $10 billion during its roadshow to achieve a $100 billion valuation, which would make it one of the biggest IPOs of all-time."
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Facebook To Go Public On Friday, May 18

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  • by Idetuxs (2456206) on Wednesday May 02, 2012 @02:50PM (#39872029)

    Someone have to say it: Bubble

    There.

    • by Yvanhoe (564877) on Wednesday May 02, 2012 @03:03PM (#39872187) Journal
      I hope so. I fear it is not. Facebook is indeed profitable. I doubt it has much room left to grow a lot but it is a company that is worth a lot already.

      My bet is that the IPO will be a success, just not an hysteric one.
      • by Anonymous Coward on Wednesday May 02, 2012 @03:24PM (#39872401)

        Facebook is indeed profitable.

        But merely a fad. Just as much as AOL chat rooms, Friendster and MySpace, and possibly even YouTube and Twitter.

        There's nothing demanding that users continue to user Facebook, nothing binds their behavior, and worst of all, user interest can easily evaporate overnight.

        • by icebike (68054) *

          I still wonder how it is that they are profitable.
          Nobody pays anything for the service, other than with their privacy.
          It only started turning a profit in late 2009.

          • by SScorpio (595836) on Wednesday May 02, 2012 @03:51PM (#39872697)

            Of course the normal Facebook user doesn't pay anything. They are the product not the customer. Facebook's customers are all the companies that advertise on it, or buy people's private data.

          • I still wonder how it is that they are profitable. Nobody pays anything for the service, other than with their privacy.

            Same way television was profitable for many years for the likes of CBS, NBC & ABC. Nobody paid anything to watch TV either and the broadcasters had tremendous infrastructure expenses.

            • Exactly the same way: advertising. Shows were sponsored by cigarette or car companies (I seem to remember that Perry Mason was sponsored by Viceroy cigarettes, for example) and had live endorsements by cast or filmed commercials (sometimes both) when shows were broadcast. Advertisements paid all the rent.
        • by craigtp (1356527) on Wednesday May 02, 2012 @04:18PM (#39872933)

          Facebook is indeed profitable.

          But merely a fad. Just as much as AOL chat rooms, Friendster and MySpace, and possibly even YouTube and Twitter.

          There's nothing demanding that users continue to user Facebook, nothing binds their behavior, and worst of all, user interest can easily evaporate overnight.

          Oh but there is something demanding that users continue to use Facebook: The Network Effect [wikipedia.org].

          And within Facebook's network effect, Critical mass has long since been surpassed and Metcalfe's Law [wikipedia.org] has grown to such a large proportion that, for current users of Facebook, leaving Facebook is akin to simply switching off the internet altogether.

          • Re: (Score:2, Interesting)

            by vux984 (928602)

            And yet half the people i know say they haven't checked their facebook page in months...

            Its there...they can't leave... but its pretty much abandoned...

            I'm curious what percentage of people have an account due to the network effect of needing one to see something or other from time to time, and beyond that never using the site.

            Do they make up 10% of facebook? 50%? 80%?

            • by twright0 (1877370)
              Whenever Facebook reports user numbers, they report *active* users, which they define as using the site once in the last 30 days. You can argue how "active" someone is if they use it once a month, but they don't count your friends who "haven't checked their facebook page in months".
              • by vux984 (928602)

                This gets to be a bit of a grey area tho. Alot of these guys have mobile phones with facebook apps, so even if there is no activity, and no active checking of facebook... the apps still login and check for updates...

                I expect that counts as "active", even if no new content is ever actually consumed or created.

      • by Anonymous Coward on Wednesday May 02, 2012 @03:25PM (#39872411)
        My bet is that, just like in most IPOs, the only people to make money from it will be the institutional investors that get in as preferred (early access before normal trading). They'll then cash out as early trading and the "day trader" mentality causes the price to go spiking up. The folks that buy during that spike will be left holding the (empty) bag. Again, as usual. This seems to always happen on these "big" IPO offers. Google's was the same way. Now - if you buy during the spike, you might still make money if you can steel yourself to hold onto it for awhile. Maybe. If you are lucky. Otherwise, for folks like the average slashdot reader, it is a "don't buy".
        • Yeah, you wouldn't want to end up like one of those fools that bought Google stock from August 2004 - Dec 2005 and sold it at literally any time that wasn't Oct 2008 - May 2009. Or even worse, one of those morons that bought it in the first month when it was under $150 a share! I bet they feel dumb now for buying stock in a company that's already successful.

          • by Svartalf (2997)

            The problem is... There's been no dividends. You have to sell the shares to get value out of the stock. It's only worth the paper the certs are printed on while you're holding onto it until you find a bagholder that's willing to pay the price you're selling it for.

        • by DerekLyons (302214) <fairwater@gmFREEBSDail.com minus bsd> on Wednesday May 02, 2012 @04:47PM (#39873171) Homepage

          Google's was the same way.

          No, it wasn't. On opening day it closed at 100.35, and except for two days two weeks after their IPO... it's never been below that.

        • by Svartalf (2997)

          The only real way to make money on the IPO would be at the start of the spike and attempt to ride the shareseller price up to almost the peak and sell at that theshold- you don't want to become a bagholder on the thing.

        • ...the "day trader" mentality causes the price to go spiking up.

          It's not just mentality, it's how the market rules are laid out. The possibility of short selling keeps prices from spiking up regularly (effectively, the short sellers punish overeager buyers). Short-selling a stock is very difficult within its first 30 days, meaning that most otherwise-market-neutral traders end up with a long bias on this stock. Of course the stock jumps up as a result. Now, the "IPO mentality" exacerbates this phenome

      • So, where did this value come from? I mean, I highly doubt that it's genesising value. It's a free service. The product IS the users. That's marketing. Targeting advertising is what facebook's entire revenue stream is hinged on, right?


        I know economics isn't a zero-sum game, but facebook isn't generating wealth here. Where did it come from?
      • by Svartalf (2997)

        Profitable?

        Does it produce anything of merit or value past being somethig akin to TV 2.0 for the masses that have Internet?

        No?

        About like most of the other "social" networking things- I keep wondering how they are making money...because it's not paid for by regular advertising and it's not paid for by Web 1.0 style advertising- and it sure as hell isn't paid for by it's users. "Dot-Bomb 2.0" is what I've been thinking about this.

    • NO. Not a bubble (Score:2, Insightful)

      by Anonymous Coward

      Facebook is God's gift to marketing data. People willingly give their personal data to have their little ego sites.

      Here's the kink: Most of that data is bullshit. And frankly, I love it. Here's an example:

      This little old lady I know was told by her kids and friends (myself NOT included - I told her to NOT have a FB account!) to give bullshit data. She really wanted an account, so we insisted that she give enough for those assholes at FB to allow her to open an account. She had to give a cell number - it fr

      • by Dunbal (464142) *

        if you're a marketer and you're using FB for data mining pupsoses

        Marketing people are used to that. You think the girl who fills in the surveys at the supermarket has never "cheated" or decided that it would be easier just to put garbage in the forms herself and go home early? You think market research companies - yes even the big ones - never fudge their reports? Yet despite all that, businesses manage to hold on to marketing departments. So either marketing departments are really good at marketing the need for a marketing department, or maybe there are a few tools avai

        • So either marketing departments are really good at marketing the need for a marketing department, or maybe there are a few tools available to cut through the crap and figure out which data out of the mountain of data is actually important and relevant, and which isn't.

          And the answer is: marketing departments are really good at marketing the need for a marketing department

      • by KhabaLox (1906148)

        Moral of the story, if you're a marketer and you're using FB for data mining pupsoses - AHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHHA!

        I think the more valuable data they get is:
        1) Who you're "friends" are (both real people and show/band/product pages).
        2) What links you click on.
        3) What links your friends click on.
        4) The overlap of 2 and 3.

    • by Svartalf (2997)

      I thought "Dot-Bomb 2.0"...yeah, bubble.

  • Best avoided (Score:5, Insightful)

    by icebike (68054) * on Wednesday May 02, 2012 @02:50PM (#39872033)

    This will open low, shoot high, then nosedive and stay low for a long time.
    You can play in this sandbox, as long as you understand that all the sand belongs to someone else, and at bets you can get in, fill your bucket, dump it, and get back out before any one notices you are there.

    Everybody recognizes this for what it is, a cashout for the major FB players.

    • Re:Best avoided (Score:5, Interesting)

      by Kenja (541830) on Wednesday May 02, 2012 @02:52PM (#39872057)
      When it drops low enough I'll buy a single share so I can get on the investors mailing list. Cant wait to see documented information about how they make their money. Should be a fun read.
      • Re:Best avoided (Score:5, Informative)

        by icebike (68054) * on Wednesday May 02, 2012 @02:54PM (#39872083)

        I'm on a lot of such lists, and you will never read anything of interest there.

        • by Kenja (541830)
          There are very few companies like Facebook whom have no documented source of their income. They are under legal obligation to provide investors with mission & earning statements. So they will have to answer the question of, if your users are not your customers, are they your product for your real customers?
          • Re:Best avoided (Score:5, Insightful)

            by icebike (68054) * on Wednesday May 02, 2012 @03:22PM (#39872387)

            There are very few companies like Facebook whom have no documented source of their income. They are under legal obligation to provide investors with mission & earning statements.

            I've read a lot of them.

            You will find precious little detail in the revenue side of a 10K. You get exactly what they want you to get, while sales data is masked and obfuscated and aggregated to the point that you can't tell anything from the Balance sheet. Entire massive R&D projects can be hidden on the costs side of the ledger, such that companies like Apple can spring an entire new concept in in smart phones after three years of development with no one having any clear idea of the cost involved, or even that the project was underway from reading financial statements and annual reports.

            Seriously, if you think Sarbanes–Oxley or GAAP rules or SEC regulations provide any clarity or a level playing field you are delusional.

          • Re:Best avoided (Score:5, Informative)

            by vlm (69642) on Wednesday May 02, 2012 @03:22PM (#39872389)

            You have it wrong. They have to document a semi-detailed, lets say, one page income statement listing classes of income, and it gets stamped with the approval of a corrupt auditing agency (recall recent scandals where it was all faked).

            Trust me, Wisconsin Energy does not give me a copy of individual bills in each quarterly statement. You get lines like "$1B revenue from electric"

      • Re:Best avoided (Score:5, Informative)

        by alexander_686 (957440) on Wednesday May 02, 2012 @03:04PM (#39872201)

        Why borther with buying a share? Anything they send out to shareholders they also have to publish on SEC's Edger. It is a great little resource.

        http://www.sec.gov/edgar/searchedgar/companysearch.html [sec.gov]

        Now, buy a share of Berkshire Hathaway. You can get the information off the SEC, but Buffett really knows how to put on a show.

        • by Kenja (541830)
          Easier for it to just show up in the mail. I'm very, very, lazy.
          • by vlm (69642)

            Easier for it to just show up in the mail. I'm very, very, lazy.

            Then you're going to be pissed off that several of my reports are now email delivered. No snail mail, or less, anyway.

            Examples:

            Wisconsin energy is a paper only company. I believe email delivery is optional for quarterlies, but they like to snail mail a big ole paperback book once a year for annual.

            I believe PRPFX (a mutual fund) is a email only company. I might have gotten an annual in the snail mail, but I haven't seen a quarterly from those guys in .. forever I guess.

            Definitely SLV and GLD (ETFs) are e

            • Here are the rules:

              Publish = File and send - either a paper or email copy - shareholder's perfance.
              File = Put a copy up on the company's web site and SEC's Edger. Mailings only happen if a person requests it.

              Public Companines must publish once a year, and file the other 3 times.
              Funds must publish twice a year (Annual and Biannual) and file twice a year.

              Annual reports tend to be audited by a independent 3rd party, everything else is held to a lower standard.

      • You don't have to be a shareholder. You can get their financials [sec.gov] at the SEC's website.

      • by cpu6502 (1960974)

        I wouldn't buy Facebook.
        They support CISPA.
        LINK - http://slashdot.org/submission/2049919/mozilla-warns-cispa-is-alarming-threat-to-privacy [slashdot.org]

    • by S77IM (1371931)

      Is there a betting pool on how long Zuck stays in charge of FB post-IPO?

      I'll start, at, oh, 3.5 years.

        -- 77IM

      • by Jeng (926980)

        I'm thinking 2 tops, sooner if tries to make another billion dollar deal on a six figure company.

      • I would guess however long the vesting period is...
      • Why 3.5 years?

        MZ holds over 30% of the company so he is going to have a lot of power. And the IPO is for a thin slice (IIRC 5%) so there not going to be a big shift in who is sitting on the board. And there is no debt - which would be another avenue which could force change.

        This is very different then Steve Jobs and Apple or Jerry Yang of Yahoo - who held far less. Even if FB blows up he should be able to hold out for a long time.

      • Even post IPO, he would control more than 50% of the voting rights. I would expect him to be the CEO, practically for ever (even if he runs Facebook to ground).

    • by Dunbal (464142) *
      No, this will open high, and go even higher, because of exactly the expectation you describe. Then when you and people like you have been stopped out of your short positions, it will nosedive when creative accounting fails to deliver the growth that Wall St. always expects.
  • So how much does the whole organ donations thing add to Facebook's value? Must be another couple of billion easily.

    They seem a little overvalued to me. It sounds like when Red Hat went IPO in the late 90's. What is Facebook's actual revenues? Something like $200M quarterly?

    • by Sez Zero (586611) on Wednesday May 02, 2012 @03:01PM (#39872163) Journal

      What is Facebook's actual revenues? Something like $200M quarterly?

      LA Times is reporting [latimes.com] $3.7B annual revenue, so an average $925M quarterly.

      • by leonardluen (211265) on Wednesday May 02, 2012 @03:24PM (#39872407)

        a $100 billion company should be making a truckload more than that.

        google (current market cap $200billion) pulls in about $10billion in quarterly revenue...

        judging by that facebook is at best a $20 billion company. about 1/10th the size of google.

        yeah, it is a bit more complicated than that, but still facebook is worth nowhere near $100 billion. and really they don't have a whole lot of growth left, they have saturated their market pretty well.

        • by KhabaLox (1906148) on Wednesday May 02, 2012 @06:14PM (#39873875)

          I'd disagree about their growth potential. Certainly their user growth will slow down, but there are plenty of untapped revenue streams - for example mobile ads.

          But as for the rest I think you're pretty spot on. I took a quick scan of GOOGs 2011 numbers and they have about the same profit margin and a better debt ratio than Facebook, so it's hard for me to see the justification for having 1/2 the market cap of GOOG with ~1/10th the revenue and 1/10th the net income.

  • Eh?? (Score:5, Funny)

    by jamstar7 (694492) on Wednesday May 02, 2012 @02:56PM (#39872105)
    I thought it already was public. My personal data is all over the internet.

    Oh, they're taking their STOCK public. *Nevermind*...
  • by MrEricSir (398214) on Wednesday May 02, 2012 @02:57PM (#39872113) Homepage

    "...which would make it one of the biggest IPOs of all-time."

    Look Google I'm really happy for you and Imma let you finish. But Facebook is the BIGGEST IPO OF ALL TIME!

  • The stock price will sky rocket on the ipo, then drop off a bit a week later (as have others). by this time next year the price will be one third of what people will pay May 18, unless they go the MySpace route and die a slow death.
  • by dryriver (1010635) on Wednesday May 02, 2012 @03:11PM (#39872277)
    This IPO will basically put a concrete dollar price on what having the "private data" of 800+ million human beings in your fist is worth. Of course the idiots who run Wall Street will value this "precious resource" at Billions of Dollars. That's the only thing the internet means to them: A way to track people, get at their most private data, to then mine that data to devise new ways of selling goods and services to them. ----------- It isn't Facebook that's being valued here. Its "US". The IPO will put a dollar price on what the private data of X million FB users is worth.-------- Someday Facebook will face a serious downturn just like AOL and Yahoo!, and maybe disappear from the internet landscape altogether. That day can't come soon enough considering that the only thing FB trades in is other people's privacy.
    • Do you really think facebook has the personal information of better than ten percent of the population of the planet? I have my doubts.

    • If they can tell I would like to buy NES cartridges at discount prices, I'll be content if they can figure it out and try to sell me that vs Siding for a house when I live in an apartment.
  • Zuckerburg already allowed my app on his page, so I've already got all the info of him and his friends.

  • FB? really? (Score:5, Interesting)

    by vlm (69642) on Wednesday May 02, 2012 @03:19PM (#39872361)

    In the real estate biz FB means "f*cked buyer" like a guy who bought at a multigenerational top of a housing bubble, or a guy trying to do landlording from another coast, or a guy stuck paying two mortgages because the old house won't sell, guy who bought without contingencies/no inspection and got screwed, guy who believed the lying commissioned real estate agent when she said there were multiple offers so he should raise his bid but there were no offers (she tried that on me and my wife, I laughed at her) etc. Basically a loanowner who didn't get the house he was expecting. Makes all the comments "FB this" and "FB that" sound much funnier.

    • Re:FB? really? (Score:4, Interesting)

      by rk (6314) on Wednesday May 02, 2012 @03:40PM (#39872603) Journal

      I had that experience, where a house was listed at X, but was told that really it was X+delta close to X itself, because there was bidding war in progress. We walked away right then, and the realtor trying it on us then tried to backpedal, whereupon I told her "You're playing games with us, and because of that, I won't buy this house at ANY price, because I will assume any offer I make that you or your client find acceptable will screw me." It's a form of bait-and-switch and I won't play that game... but a lot of people "fall in love" with a house and have to have it. I guess I've had too many houses in my life to really get that attached to them.

      • by vux984 (928602)

        I had that experience too. As a seller. Except we had multiple offers, and sold some 15k above asking, 35k above the first offer that came in.

        We had a potential buyer walk away as well when they were told a bidding war was in progress...

        The last car I bought also took nearly a month to close a deal as I and the owner offered and countered via his salesman at a consignment dealership. During that time, the car sat on the lot, and anyone who came to see it was told that although the car wasn't sold there was

    • by Svartalf (2997)

      Heh... Nice term. Meshes in nicely with the "shareseller" value term I came up with.

      With securities in this day and age, you're looking to sell to the bigger fool than you- trying to ultimately find the bagholder for your stuff so you can cash out while the getting's good.

  • Yep... (Score:3, Informative)

    by koan (80826) on Wednesday May 02, 2012 @03:27PM (#39872447)

    Bubble goes pop.

    Facebook's ad business isn't very (or so some claim) because of the way they target ads (like TV ads) so expect a lot fo change (again) in Facebook's policies.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/02/businessinsiderfacebooks-lousy-ad-b.DTL [sfgate.com]

    Your Facebook ID becomes the way you pay for everything online and offline. Long-term, one of Facebook CEO Mark Zuckerberg's goals seems to be for your Facebook ID to be your ID everywhere. Given smartphone adoption, you can imagine this happening online and off. If that were to happen, the easiest way for Facebook to make money would be to facilitate offline and online transactions. Potential: PayPal, part of eBay, has an enterprise value close to $20 billion or so. Visa has a market cap of $100 billion.

    Read more: http://www.businessinsider.com/facebooks-lousy-ad-business-is-making-its-ipo-is-looking-hairier-by-the-minute--heres-why-it-doesnt-matter-2012-5#ixzz1tkK42pqr [businessinsider.com]

    • Re:Yep... (Score:5, Interesting)

      by koan (80826) on Wednesday May 02, 2012 @03:41PM (#39872617)

      Oh and this...

      Venture capitalists fund startups that leverage Facebook data to disrupt their incumbents. Former Facebook executive Chamath Palihapitiya left the company to start a venture capital firm with a single mission: fund companies that will use Facebook's open APIs to take over large, calcified industries like banking, education, and healthcare. Palihapitiya is funding a banking startup, for example, that will give potential customers a credit score based on their Facebook activity. Potential: Unknown. The idea is that Facebook will profit from companies using its data to disrupt incumbants the way it figured out how to profit from Facebook gamesmaker Zynga's disruption of the videogame industry.

      Read more: http://www.businessinsider.com/facebooks-lousy-ad-business-is-making-its-ipo-is-looking-hairier-by-the-minute--heres-why-it-doesnt-matter-2012-5#ixzz1tkNTU9mH [businessinsider.com]

      Scary.

  • I have a wager running with a friend. The wager is about how many initial shareholders will buy the shares.

    Can anyone tell me how i could find out, how many shares were handed out per buyer (on average) during the IPO?

    My wager is that less than a million buyers will receive shares during the IPO.

    • That information is heavily restricted, and there is no good source. However, from personal experience, there is going to be a huger dispersion in numbers so averages are going to do you any good.

      You can go to the red hearing now, put it won’t tell you how many shares they are planning on selling or at what price. We will know that on the day of the sale.

      Most of the shares will be sold to institutions. If they are public they report their holdings once a quarter. It won’t tell you if they bought

      • by mseeger (40923)

        Thank you for the answer....

        Since the absolute number of shares sold is public, with the average i could deduce the number of buyers. My bet was, that most stocks will go to institutional buyers and therefor there won't be too many (my bet: 1 million shareholders).

        My opponent in the wager postulates, that FB will distribite the shares as far as possible to make their users shareholders as well. He betted on more than 10 million shareholders.

        Between 1 and 10 million we consider a draw ;-).

    • OK, 2nd post to the same question, but I have been thinking about it.

      Let's say...
      FB wants to rasis 5B (which is at the low end of guesses)
      They price at $50 a share.
      That's 100m shares.
      Shares are normally sold in lots of 100 - we will call that 1 unit.

      So, 1m units will be sold

      And since large insti

  • for something that isn't worth a goddamn thing

    god I hope this shit tanks, suck my balls Mark Fuckerberg
  • I'll give the company $1 for the whole thing. Matter of fact, I consider it a liability. They would need to pay me to take it off their hands.
  • From the list of risk factors:

    29. Viruses, hacking, phishing and malware. Oh my.

    At least someone has a sense of humor.

    • China is telling their bankers to read the FB red hearing as a model to disclose risks.

      Of course, they are still not letting their bankers use FB. That would be just too dangerous.

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