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Doubled up on FB


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2013 Jul 25, 12:53am   49,765 views  119 comments

by SFace   ➕follow (7)   💰tip   ignore  

Love what they are doing with Mobile and they figured out how to put ads on a phone in a targeted and discreet way (as part of a feed.) Really, FB have the most lucrative advertising platform out there for the majority.

For just an ad company, they aready have more than 1M paid advertisors, the bulk of which are small business'. Can't see why they can't have 5 million customers and really monteize what they built big time. FB will be going up for the next 2 years.

I wonder if Instagram can do what Youtube did for Google?

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1   MershedPerturders   2013 Jul 25, 2:18am  

ya and selling your private data to the NSA.

2   Tenpoundbass   2013 Jul 25, 2:45am  

Facebook will end up more obscurely "What ever happened to (X)" than AOL or MySpace.

None of my daughter's or their friends use FB anymore.
Just a little over a year or so ago, they spent 80% of their waking life on FB.

3   Facebooksux   2013 Jul 25, 11:17pm  

Don't be stupid. You're buying at a top. I understand if you'd bought a few days ago to gamble, but you're too late if you're buying post-earnings announcement.

I

4   New Renter   2013 Jul 26, 12:22am  

Facebooksux says

Don't be stupid. You're buying at a top. I understand if you'd bought a few days ago to gamble, but you're too late if you're buying post-earnings announcement.

I

Not that your biased against FB or anything...

5   Facebooksux   2013 Jul 26, 7:07am  

New Renter says

Facebooksux says

Don't be stupid. You're buying at a top. I understand if you'd bought a few days ago to gamble, but you're too late if you're buying post-earnings announcement.

I

Not that your biased against FB or anything...

Touche`

6   New Renter   2013 Jul 26, 10:45am  

APOCALYPSEFUCK is Shostakovich says

To quote a precient investment advisor, Facebook is FOR ASSHOLES who don't mind being ridiculed as demented fuckwits being conned by a satanic goon.

I take it you have no Facebook in your portfolio?

7   pkennedy   2013 Jul 29, 5:40am  

I haven't seen much lately with facebook. It under delivers in most aspects for advertisers, which is a problem. We gave it up quite awhile ago, with many of the major players in media buying because they didn't want to be left at the roadside, but also full admitting they simply couldn't do anything with the traffic.

I haven't heard from anyone in the last 6 months discussing FB actually, but that could be because we pulled out and now it's out of site, out of mind.

The big problem they had was people would go to FB for one thing, and it didn't have anything to do with advertisers. So they simply skipped over the ads with no interaction at all, or clicked, realized it wasn't a real feed and left.

I haven't looked at the numbers on facebook, so I have no idea what their financials are like or EPS. That gap up is impressive though. Thinking of going 3 years long on this one? If they keep hitting it out of the park, no problems. but I don't see them growing in leaps and bounds... I have an idea as they grow, they're going to find a lot of people giving up on them. A few will figure it out and make some good money, others will walk off after having spent so much money and gaining so little.

8   Hysteresis   2013 Jul 29, 6:01am  

buy high, sell low is always a great investing strategy!

9   Tenpoundbass   2013 Jul 29, 6:12am  

Facebook would be a $800 stock, if they protected the integrity of their site, and sued employers who used content provided on FB to fire employees, or political position to destroy their opponents careers.

People bragging and commuting crimes and then posting evidence that would incriminate them is one thing. But when it is used to do Big brother's bidding, people get cheeped out by that, and turned off.
It's too late now and the cat is out of the bag. They should have made that stand before they even went public.

10   curious2   2013 Jul 29, 6:17am  

pkennedy says

The big problem they had was people would go to FB for one thing, and it didn't have anything to do with advertisers. So they simply skipped over the ads with no interaction at all, or clicked, realized it wasn't a real feed and left.

I haven't looked at the numbers on facebook, so I have no idea what their financials are like or EPS.

Good objective analysis :) Reportedly FB nets over $1bn/year, but the p/e is over 100.

I suspect the high p/e, which started even before the IPO, might result from other factors besides the ad revenue model. One early investor was a Russian oligarch who bought a palatial estate nearby, and I can't help wondering if the investment might have been coordinated with Putin (who is former KGB) to get access to the information. Likewise rumors speculate about CIA investing in that type of company, to get the information. If FB is profitable, then it can continue to operate and generate information for its owners without ongoing subsidies. The amount of profit might not matter to certain - ahem - strategic investors, since they count their return in a different currency, i.e. information. FB has achieved 80% penetration in certain countries, with users informing on themselves and their neighbors and friends and family; at its peak the East German "Stasi" was only around 10%, and it never turned a profit. FB execs say they guard user information very carefully, and that may be true, but it was true of the Stasi too. Also, company practices can change depending on circumstances and personnel changes; who knows what became of the Friendster database for example. Rupert Murdoch's company reportedly paid $500 million for MySpace, as other divisions of the same company were paying to hack into phone accounts; dunno what MySpace ad revenues look like, but the information might have had other value potential.

11   Hysteresis   2013 Jul 29, 6:25am  

John Bailo says

It's a 300 stock...

you better load up on it!

it can't miss!

12   B.A.C.A.H.   2013 Jul 29, 8:42am  

Linked In is creepy. Someone on patrick "shared" about some experiences s/he had, I just googled that combination and up popped the linked in. Including the list of connections which included "linked-in" family members.

13   MsBennet   2013 Jul 29, 11:58am  

donjumpsuit says

Personally I feel YELP is way undervalued.

I used to like Yelp and use it a lot. But have you seen the Yelp reviews for Yelp? There are lots of pissed of business owners. Any nut case can leave a scathing review (or a competitor) and there is nothing you can do about it. Get your other customers to write a true review for your business? Na-ta-ta says Yelp. We will "hide" those reviews. Anyway over 2,000 pissed off reviews for Yelp.

14   Tenpoundbass   2013 Jul 29, 11:01pm  

B.A.C.A.H. says

Linked In is creepy.

I like it, because it's a list of who's who, to not network with.
Every time I give some jackass my email, and they send me a LinkedIn invite, that's the end of our communication.

"I gave you my email asshole, not some website membership invite! Now drop dead and lose my email address!"

15   marcus   2013 Jul 30, 12:39am  

CaptainShuddup says

I like it, because it's a list of who's who, to not network with

Yes, I'm sure that's how all of the most successful people out there with the most impressive resumes and most useful networks feel about it.

16   Philistine   2013 Jul 30, 12:52am  

CaptainShuddup says

Every time I give some jackass my email, and they send me a LinkedIn invite,

Wait a minute . . . Linkedin doesn't work by giving your email out. People can't invite you if you have not set up a searchable profile. So you're on Linkedin, but then you bitch and moan when you get an invite? Riiiiggghht. . . .

17   B.A.C.A.H.   2013 Jul 30, 12:54am  

Philistine, do you work at linked in? Own shares in it?

18   Tenpoundbass   2013 Jul 30, 2:00am  

Philistine says

Linkedin doesn't work by giving your email out.

A guy asks you for your Email, he then from his LI profile(I assume) sends you a Join LI request. Not much different than MySpace worked. If I give you my email, I expect you to send your email back. When I get those LI invites, the person's email is not shown, you must first sign up for LI, then you can link to that person.

I don't have any problems getting work. I can work two and three contracts simultaneously, on top of a full time job at an office.
I don't need to play virtual "FORT" with some Internet wise ass, who doesn't get the whole email exchange thing.

And OH!!! I'm a bit of Socialnetworkphobe.

But when I stop getting ten emails a day from my resume on

Monster
Dice
and
Indeed

Then I'll rethink this whole virtual grabass thing.

19   FortWayne   2013 Aug 1, 1:49am  

Let me throw a bit of a wrench into your strategy.... how do you know they won't turn into another myspace?

20   Hysteresis   2013 Aug 1, 3:20am  

FortWayne says

Let me throw a bit of a wrench into your strategy.... how do you know they won't turn into another myspace?

- in general, all companies go out of business. it's just a question of "when".
- tech companies become obsolete faster than other companies.
- web companies become obsolete faster than tech companies.

fb will turn into myspace eventually. we just don't know when this will happen. could be a year from now, could be 50 years or longer (if they are successful innovating).

people that think fb is worth $300/share are clueless. that would give it a market cap similar to google.

except google has a massive $11 billion in net income and facebook has a puny $53 million in net income (need to increase it 200 times to catch up to google). so unless you think facebook can find an extra $10 billion under the couch cushions you're dreaming.

21   CL   2013 Aug 1, 4:59am  

SFace says

Myspace never reached 1B users or stopped begging for money

Even after Rupert bought them?

http://www.telegraph.co.uk/finance/markets/10063498/Rupert-Murdoch-warns-Facebook-faces-same-fate-as-MySpace.html

22   Philistine   2013 Aug 1, 5:11am  

B.A.C.A.H. says

Philistine, do you work at linked in? Own shares in it?

Nope, not even interested. I think LI is pretty ridiculous, but mostly innocuous.

23   Hysteresis   2013 Aug 1, 5:16am  

fb won't grow 50% year over year for the next 3 years.

even at these unrealistic growth rates, the stock still wouldn't be worth $300/share (when it's at $38/share today).

reading "analysis" on patnet is like reading the funnies. hilarious!

24   Goran_K   2013 Aug 2, 5:40am  

SFace says

The way I see it, FB can be a 40% operating margin business. If you slap a 40-50% growth for the next three years, we're talking about a 15B dollar busines with operating profits of $6B or $4B net of tax.

lol hahahahahahahahahahahahahahahahahahahahaha

25   puhim   2013 Aug 2, 6:36am  

I hope the stock crashes. FB is awful. Total crap.

26   puhim   2013 Aug 2, 6:36am  

I have never ever seen one FB ad on my phone. While I see many many Google ads all over the net

27   puhim   2013 Aug 2, 6:37am  

If you want shit stock buy FB it's total worthless junk

28   puhim   2013 Aug 2, 6:38am  

MershedPerturders says

ya and selling your private data to the NSA.

Privatized selling of data :)

29   Hysteresis   2013 Aug 2, 6:51am  

SFace says

Rev ($B) yOY
2009-2013 (forecast)

0.8

2 150.00%

3.7 85.00%

5.1 37.84%

7.3 43.14%

FY13-Q2 53% accelerating again

who the hell knows what 2016 will look like but 15B is within reach and that will take EBITDA at around $7B - $8B based on how revenues are leveraged.

linear extrapolation. lol.

prices always go straight up!!

30   bmwman91   2013 Aug 6, 3:58am  

Here's the thing. None of us posting here on P.net are FB's actual target customers. We are too old and too ingrained in the "old" way of socializing and gathering information. Their strategy is to be THE internet for today's youth that will become the future's working and earning adults. Zuckerberg has outright said that his goal is to change how people socialize and to have FB be the medium through which information is exchanged. Not just pictures of your lunch, but ALL types of information. To most of today's adults, FB seems like a novelty with some marginal usefulness. To today's adults' children, it is a utility like water or electricity. Good or bad, and there are plenty of arguments either way, these kids are going to grow up and social media will be at the center of their social universe. Will FB remain relevant? Nobody knows. Comparing it to Myspace seems sort of nonsensical to me though since FB has been actively working to position themselves in every aspect of people's lives. Supposedly they are even trying to bring FB to "dumb phones" like Nokia stick phones so that everyone on earth can have access.

Where will their revenue and stock go? That depends on how well they execute on their strategy of being THE internet for the next generation of adults. Google has been trying to do this for years, and has had pretty good success at it. FB looks like it has the resources, and investors seem to be becoming increasingly convinced that they will be able to execute on their strategy. Personally, I have no idea how that will pan out. I do know that people love mindless entertainment and gossip, and people tend to seek out entertainment even more when hard times hit the economy. Since FB provides virtually endless (and FREE) brain-drain capability, I don't see it going away. It's like TV, but you basically tailor your experience to whatever you want with increasingly minimized effort as FB finds new ways to suggest stuff for you to look at.

31   Eman   2013 Aug 8, 5:22am  

BMWman,

Great analysis.

SFace,

This one is a keeper in my opinion. The potential is there. Not a $300 stock, but $70-$80 stock in 2-3 years is definitely a possibility. I agree it was a break away gap, and the gap will not get filled. There's so much strength in the stock in the recent days. Sorry I couldn't get in on the day of your recommendations, but I also avoided the JCP purchase, so it was a wash. :)

For the critics, if you think you're so good, especially you hysteresis, why don't you put a couple of your picks/recommendations out there for us to see so we could compare?

32   mell   2013 Aug 13, 3:35pm  

Aside from SRS as mostly a day-trading vehicle for which I don't see much downside in a sideways-to-down market (tapering looming) and rising inters rates, I can offer MSTX: crappy management with questionable history including reverse splits and name changes, therefore trading near all time lows around cash value per share with one particular interesting drug in the pipeline (funded through commercialization on successful phase 3 trial) which is MST-188. Downside: wherever your stop loss is below 42 cents, upside, 2x-3x, but with a first target sell at around 65 cents (where recent investors' warrants are priced) or below. No investment advice here ;)

33   Goran_K   2013 Aug 19, 3:59am  

E-man says

Just bought $400 shares of FB. Will see where it's going to be in the next couple of years. :)

Did you really buy them, did the transactions complete? Or will you magically remember that you didn't buy them when they are down 10% next year?

34   RWSGFY   2013 Aug 19, 4:18am  

E-man says

Just bought $400 shares of FB.

Why bother with such a small position? Your transaction cost alone is what, 4% on this one?

35   Goran_K   2013 Aug 19, 4:21am  

E-man says

Yep. We just completed our renovation on the condo and rented it out. Staying home this morning to pay some bills, but gotta run some errands shortly. Next week should be busy again renovating our recent 3 beds, 2.5 baths acquisition. I have been so busy that I had to pull out of my tennis tournament 1/2 way through. The tournament just completed this Sunday.

After this last project, I'm taking the rest of the year off to work on my game plan for next year, which is commercial acquisitions.

Winning or losing on stocks is chump change. It doesn't make a dent in my networth. It's legal gambling in my opinion. I will start invest the money in my IRA in buying notes and tax liens in the next couple of years after the low hanging fruits in this real estate cycle are gone. Why screw around with the stock market when you can consistently make 12% to 18% buying notes and tax liens?

Of course, to each his own.

Wait a minute. Do you guys remember me asking anything about E-man's rental empire and how much money he has? I sure don't.

36   Goran_K   2013 Aug 19, 4:22am  

Straw Man says

Why bother with such a small position? Your transaction cost alone is what, 4% on this one?

$400 is chump change to E-man. He's the real deal baby. Onto his next commercial acquisition as we speak.

37   Eman   2013 Aug 19, 4:22am  

Straw Man says

E-man says

Just bought $400 shares of FB.

Why bother with such a small position? Your transaction cost alone is what, 4% on this one?

100 free trades per year with Wells Fargo. I couldn't use all of the free trades they give me.

38   Eman   2013 Aug 19, 4:24am  

Goran_K says

Wait a minute. Do you guys remember me asking anything about E-man's rental empire and how much money he has? I sure don't.

To show you that people have other purpose in life. Not sitting around chatting on Patnet all day long.

39   mell   2013 Aug 19, 4:24am  

E-man says

@mell,

PK and I just rented out our 2 bedroom condo in Evergreen for $1,950/month. We bought it in March for $210k and financed 75% of it at 4.125%. Similar units have been sold between $300k and $325k depending on the conditions of the property. We bought one identical unit last year for $155k and rented it last year for $1,750/month. We did a cash-out refinance and pulled out $157,500 on this unit at 4.25%. What a difference a year made.

Now moving onto our next renovation project, which is the 3 beds, 2.5 baths townhouse. We closed it in June for $315k. Comparables are in the mid $400k. Why screw around with stocks when we can build equity at this pace. :)

Nice, drinks and food at the next upcoming patnet meetup are on PK (or you) then, so I heard!

40   Goran_K   2013 Aug 19, 4:25am  

E-man says

To show you that people have other purpose in life. Not sitting around chatting on Patnet all day long.

Really? Is that why you decided to wave your dick around on Pat.net? Because Pat.net isn't that important to you?

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