Facebook goes public. Raises 16 billion. Third largest in history.

[Qalbert]

know*

[dejet]

7am dont give a crap.

also

Over the past century, the average price-to-earnings ratio for big U.S. companies has been 15, according to Anant Sundaram with the Tuck School of Business at Dartmouth. The ratio for Apple is about 15. The ratio for Google is a bit higher.

One way to think about that: At current levels, it would take the average company 15 years to generate enough profit to pay for itself.

The picture for Facebook is very different. Facebook's price-to-earnings ratio is 100. At current levels, it would take Facebook 100 years to generate enough profits to pay for itself.

"Its price-to-earnings earnings ratio is astronomical," Sundaram says. "Off the charts."

That number is so high is because investors are betting Facebook's profits are going to explode.

[Skyylya]

What?

Not sure if serious...It's pretty straightforward what I said.

[kuronosan]

Yes, I know. I just didn't think you'd miss a point so blatantly. A company taking advantage of poorly-informed people by engaging in insider-trading is not the same thing as gambling at a casino. When you go to a casino they don't tell you your odds of winning roulette are 9/10, let you place a huge bet, and then tell the rich people before they spin the wheel, "you may want to remove your bets because the odds are actually way lower than that".

[Skyylya]

I understood what you said, I suppose we missed each others point? Whether there was insider trading going on or not, has virtually nothing to do with the price of facebook after the IPO. That's a result of overall market conditions. Could some people have avoided purchasing if they got news of that, possibly. Is it definitive enough to warrant a class action lawsuit though? I would say no.

The point of the casino example is simply to illustrate that trading is a gamble and the price of facebook would be the same whether that information was made public or not. There were plenty of other warning signs that anyone trading facebook's IPO could have heeded to stay clear of investing. If they didn't listen to those, it's not likely they would have paid any more attention to this information. Hind sight is 20/20 but i'd be willing to wager 99% of the people that bought facebook would have bought regardless of if they knew this or not. Also, and not to beat a dead horse but the market's are going down right now, I don't care who the IPO is for they aren't going to go against such a strong down market. When the market bottoms out, shares of facebook will go back up, that's how the market's work. Anyone who doesn't understand that shouldn't be purchasing shares, and doesn't have any recourse.

I agree with you that what Morgan Stanley did was wrong if they did in fact withhold information. However, from what i've heard the lawsuits are being targetted at facebook like they did something wrong. And i'm not sure what that persons girlfriend's reasons are but the other lawsuits I heard of were because the "price of the stock went down" and had nothing to do with information being withheld. So we're probably talking about different things anyway

At the end of the day, Facebook isn't to be held responsible for what the underwriters did regarding their information. If anyone could even be targetted for a lawsuit it would be Morgan Stanley.

[kuronosan]

But people are stupid, and as such are quite inclined to blame the wrong people.

[dejet]

People who sue, are they using facebook in order gather?

[guartz]

My prediction is that google or microsoft is gonna own facebook in a few years.

[Kerberoz]

It'll probably take more than a few years to stop losing value and bottom out, like Myspace. Then, it'll get snatched up for peanuts and folded into the next big thing.

[Weeks]

As for what drove the price up so far beyond its earnings: Facebook has about 90% of the customer base of Google. They have marketing info on their users that is at least a match for what Google has. Google is worth $200 billion because they've monetized that info. Facebook hasn't, but public ownership is going to make them.

Again, I think people flee Facebook en masse when it becomes an ad-spamming service, but that's what it's about.

[Stumblingdrunk]

today's 9% drop was pretty sweet

[Vuitton]

my heart skips a beat for every billion FB loses

[Pikarya]

today's 9% drop was pretty sweet

http://rlv.zcache.com/keep_calm_and_...9b2gyp_400.jpg

[wop]

http://www.dailymail.co.uk/news/arti...McDonalds.html

[Correction]

http://www.dailymail.co.uk/news/arti...McDonalds.html

He got tired of being accused of not tipping so he went to the one place it wouldn't matter.

[Churchill]

what an awful article, who reads that shit lol

[Headspace]

Anyone else get random ads on their newsfeed now from shit pages they havent "liked"? I get random gap ads now.

Grats on the IPO jerks

[Correction]

what an awful article, who reads that shit lol

Daily Mail == New York Post

Identical audiences.

[archibaldcrane]

OMG CELEBRITIES ARE JUST LIKE US

wait he's not a celebrity?

well shit

[dejet]

Anyone else get random ads on their newsfeed now from shit pages they havent "liked"? I get random gap ads now.

Grats on the IPO jerks

lol and this is why facebook is going to keep dropping. Dont use it anymore but it was something I used for college when I first started. I cant think of having more ads being good for it and in the end who wants an ad on anything when your trying to talk to someone. It be like skype having an ad pop up before you call anyone.