You obviously don't know how cable/satellite/the stock market work.

I do understand the base component of traffic for web sites and their opinions on their value, but just because it's there, doesn't really correlate to financial success. Take the Superbowl ad spots, no question those 30 and 60 second spots get seen by a huge proportion of people. But unless you have all the infrastructure in place, along with the capital to fund the infrastructure, it can be like a sky banner towed above the clouds. It's there, but no one can see or really remember it.

Granted I am not a facebooker, but when I have been to the page those text scrawls on the right mean absolutely nothing to me. That is probably a reason GM decided to get away from the -ve returns. I remember in the webs infancy many content providers were hailing the exposure as good for business, yet it was only really good for web based business involved in promoting web usage (causality loop). I am not advocating the web has reached saturation point, but it's still not a pure generator of cash, the flows still need to come from traditional sources. A closed loop of developers and their internal users is not enough to hold position, no matter the page views (which has been discussed, re: so widely finessed so as to not be reliable).

Shuffle,

"This stock will trade for only a couple bucks by next year."

LOL. Willing to wager on that?

Shuffle,

I don't even know who you are arguing with. The vast majority of people on this site didn't buy FB at 40, nor do they think it is worth that.

But not being worth 40 and being 3$ a share is a massive difference.

As I stated in another post on this page. If you don't think FB can innovate or come up with other products or enter other product realms. Then obviously the company is ridiculously overpriced and probably destined for relative failure. But that's true of every single company out there.

I don't really think a company as big and as smart as FB is going to just sit there and scream at their monitors for their site to grow and watch it go down the tubes. I'm not buying FB at any price, but comparing it to MySpace is still extremely flawed.

How about 10 figures of profit. Does that mean they can make money from it?

Shuffle, I'm willing to make a market in long-dated $5 puts. We can go out to 12/31/2014 and negotiate on price. If you need an assurance that I will pay I can escrow some margin to an account as long as I can invest it in SPY or a similar product in the meantime.

If that doesn't work then I will bet on the market cap being above $10B on 12/31/2014 or bet that it stays above $10B at every point until that date. We can both escrow and have that money sit in something mutually agreed upon for this bet too.

Let me know if youre interested.

Agreeing with you and thinking the stock is worth $38 per share are not the only two options here.

But they aren't comparable. It's like saying that ESPN can't succeed because the Speed Channel doesn't get good ratings.

MySpace isn't even in the same plane of existence as Facebook.

yea it is. internet companies. I mean, how much would 2p2 be worth if you took it public? exactly. facebook isnt worth any more than that. just a website people go to for entertainment, bro. they both run some ads on the side and let you talk to people and post stuff and things like that.

And bro, don't forget. If you are a social network site, that's the only thing you can ever do. Look at Google. They're a search engine, that's it. Never could enter any other markets, so they failed.

lol, this is amazing.

the third world, where all the money is.

Limit how many pictures you can store and charge $ for putting more up is easy.

Partner with photo printing site to print your FB pictures and get commission on every purchase.

People won't pay a subscription, but they would likely shop and give gifts through Facebook (e.g., buy someone an MP3 album or iTunes gift card for their birthday and deliver it via Facebook).

This is flawed. It assumes no new competition. What keeps FB competition down today is FB's size. If they were smaller you would probably see several legit competitors.

Thanks - just read a bit more on this premise (IPO was really a large volume secondary offering), makes a lot of sense. I'm not sure the relative dollars of FB vs. Linkedin is too critical a dynamic (there is after all a ridiculous amount of money looking to be invested in a FB type opportunity)... but I think it does matter to some extent - good relative numbers to see IMO.

Re: Shuffle - why is anyone responding to him? He's clearly trolling/ignorant.

Not to be a nit, but to the below post:

If by "primary" networks you mean (in the U.S.) "broadcast" networks (FOX/CBS/NBC/ABC), they are not entirely advertising based as the broadcast stations drive "retransmission fees" in carriage agreements with Cable/Satellite/Telco (these are similar fee-based structures as the sub fee/carriage fee ESPN drives from say Comcast).

Also, these broadcast networks distribute product created by their parent companies TV studio, so the value chain of broadcast TV extends well beyond advertising (into syndication both domestically and internationally on all platforms).

This doesn't take away from your overall point, of course, just a point of clarification.

Shuffle,

"What's the wager you propose?
My call is it hits single digits within the next 1 year."

Sounds good. I bet it won't hit single digits within the next 1 year. I will bet as much money as you would like and cover escrow fees as well.

"the propblem with these companies is they get into too much debt based on ridiculous growth estimates."

Facebook has ~$11B cash and ~$1B debt. They made ~$1B profit last year on ~$4B revenues. Please explain why you believe they will "get into too much debt."

"Bravo to the poster who brought up Pets.com"

By comparison, Pets.com had ~$1M revenue and lost ~$20M in the year prior to the IPO. And sold stuff for less than it cost to gain users. There's no comparison here.

It is shocking how much discussion about a company actually goes on without using any facts.

Facebook is extremely profitable, in excess of $2 billion of EBITDA and growing. It also should have at least $5 Billion in net cash after all their acquisitions and debt pay off. This company isn't folding anytime soon.

That being said, Facebook is basically a entertainment channel used by millions of people that generates revenue from selling ads and profit sharing with companies like Zynga. They have no subscription revenue like Sirius Satellite Radio or any other cable channel that consumers pay to use. They are probably vulnerable to the next "New Thing" that will slow their growth. Terrestrial radio, print media and even the 3 TV networks have all experienced declines in revenue as new media takes over.

There is a high risk that 2nd Quarter revenue growth will not meet expectations. I wouldn't touch this stock until those financial results are released.

Shuffle,

You don't appear to understand the difference between revenue and profits.

"FB won't hit single digits within the year"

Eh, I don't love taking that side of the bet without some decent odds. They have I guess 3 earnings calls in the next year... if they continue to revise growth estimates downwards in successive quarters + Eurocrisis/general concerns around the economy... it's very unlikely of course... but I think it's not lol impossible that FB trades at high single digits or flirting around that level.

midas,

I'm pretty confident Q2 will come in at or better than the revised guidance they provided right before the IPO, which I believe is priced into the stock already.

I'd be more worried about the rumblings that Q3 numbers may also be a significant miss.

I think the stock is still pretty risky and will not be a buyer in the near-term unless it hits $20.

If they keep revising growth downward in successive quarters, as I mentioned above, this stock is gonna get even more hammered imo and I think it could get a bit ugly in the near-term.

JLF,

Certainly not impossible. But his claim that it'll hit a couple bucks within a year and be de-listed very soon is certainly superloltastic.

Diablo - he said it was going to be de-listed? I mean that's obviously insane, FB can't go broke within the year (ie, fail to meet NASDAQ listing requirements which have largely to do with debt ratios IIRC).

I think it's too soon to say that FB will definitely not hit "single digits" within the calendar year. I mean, it's pretty lol, but not a guarantee imo. There's a lot of uncertainty around FB's growth projections and of course the overall economy.

I'm not sure why you feel so confident about FB's Q2 earnings call/guidance... care to shed some light?

ETA - just looked up NASDAQ listing requirements, which largely do not have to do with debt ratios but value of publicly traded shares, minimum market makers, some financial metrics like cashflow etc. - anyway yeah that's ridiculous to suggest FB would face de-listing issues in the next year.

Al,

This is what happened after Facebook's May 9th revised guidance:

Lowered full year revenue estimate for 2012
Morgan Stanley -- $4.854 bln (new)from $5.036 bln (old)
Bank of America -- $4.815 bln (new) from $5.040 bln (old)
JPMorgan -- $4.839 bln (new) from $5.044 bln (old)
Goldman Sachs -- $4.852 bln (new) from $5.169 bln (old)

Lowered estimates for second-quarter 2012
Morgan Stanley -- $1.111 bln (new) from $1.175 bln (old)
Bank of America -- $1.100 bln (new) from $1.166 bln (old)
JPMorgan -- $1.096 bln (new) from $1.182 bln (old)
Goldman Sachs -- $1.125 bln (new) from $ 1.207 bln (old)

Lowered 2013 Earnings per share estimate
Morgan Stanley -- 83 cents (new) from 88 cents
Bank of America -- 64 cents (new) from 66 cents
JPMorgan -- 66 cents (new) from 70 cents
Goldman Sachs -- 63 cents (new) from 68 cents

(from http://www.businessinsider.com/exclu...ook-ipo-2012-5)

So, Q2 revenue was lowered from ~$1.2B to ~$1.1B. This guidance was provided May 9. I strongly believe in Facebook's ability to manage to that guidance for Q2 numbers in its first quarter as a public company. So I don't think there's going to be much impact either way at that point from the reported Q2 numbers. What's much more risky IMO is revised guidance on that call pointing to even slower Q3/Q4 growth. Would not be surprised to see the full year estimates get lowered again, which certainly would hit the stock hard.