Clusterzuck

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The Facebook ipo gave institutional investers one set of information, and public investers a different set. Kind of like the goldman exec creating a new investment product internal memos described as a pos [piece of s¤¤t]. Institutional investers could then take a short position, the same way goldman did. Anyhow, IPOs are not the secret opportunity to get in early on a successful company anymore. They are now a way to crew the gullible public by the chosen class.

If you know anyone that bought the hype and invested, it's probably best not to ask them about it, they tell you to zuck off.

douglaslee's picture
douglaslee
Joined:
Jul. 31, 2007 4:01 pm

Comments

See stuff like this happens when we as Americans put too much enamoration behind service-sector corporations.

What did FACEBOOK ever produce ?

The provided a service.

These are the same type of yuppie investors that invested in derivatives as well.

Point being, get yuppies out of economic decision making.

antikakistocrat's picture
antikakistocrat
Joined:
Apr. 18, 2012 3:41 pm

Zucker = Sugar (in German) So this Sucreberg should be a sugarcube.

Too soon to know what those advisory differences were yet, but I did go ahead and printout the 200 page prospectus they put out back in February.

Those that relied on others to review it for them would only suffer financially if they were told that it was a good buy above $4 a share. An okay deal (for both sides is $3-4 a share).

A short list of realities fully disclosed in the prospectus:

1) Stockholders Equity of $4.9 billion - but paid in capital of $4.2 billion. Not a lot of return (but at least not a loss) for seven years of increasing growth.

2) Explains large profit in 2011 based on 845 million active accounts (that's 3 U.S.A.'s worth of computer literate people). Does projections like they think there are 100 more Earth-sized planets to culivate users on.

3) Explains that 12% of their last, record year, income is based on fee/commission of "virtual & digital goods" sold by Zynga. Does projections as though world economy is experiencing rapid upward spiral (where there would be much excess disposable income to spend on imaginary assets) vs. global recession.

4) With all the (pre-IPO) shares already outstanding, their 2011 record profit only amounted to $0.52 per share. Even if 2011 can be replicated for 5 more years, that's just $2.60 over five years plus the Bane-Kapital style tear-down book value of about $1.25 a share.

5) Mentions, but (perfectly understandably) deemphasizes that what it has achieved thus far has been without much competition and seven-years makes for a pretty mature customer base as well as invitation for emerging/evolving competition.

6) They had already inflated and reinflated their business value in previous rounds of raising capital (see also C, D & E series) each time compounding the flaws in their models, but more honest valuation can be seen in that the average stock option for 138 million shares is at 83 cents per share.

Hope this helps clarify the who-haw and why there's a reason we shouldn't invest in things we don't understand unless we like being the one left holding the bag-o-pooh.

Rodger97321's picture
Rodger97321
Joined:
Jul. 31, 2007 4:01 pm

My "Wifey" saw right through this!

It's ONLY taken 19 years... but I am starting to rub off on her!

Fletcher Christian's picture
Fletcher Christian
Joined:
Feb. 15, 2012 12:49 pm

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