I Empirically Show Facebook Getting "My Space[d]" As They Actually Lose Users With Not A Single Analyst Noticing!!!!

Reggie Middleton's picture

This is an update to our first three Facebook forensic analyses, two of which released before the actual Facebook IPO  (search the :downloads section for the first two documents). The updated valuation for Facebook (which has actually has an increase in terms of value now that we have more information to deal with) is available to download for all paying subscribers (FB Q4-2012 Analysis & Valuation Note - update with per share valuation). I'm available to discuss this with professional and institutional subscribers via phone or Google+. Click here to subscribe or upgrade.

As of the writing of this addendum, Facebook is trading at $31.10, not even a year after debuting at $38.This utter disappointment and gutting of the Muppets is exactly what our research has anticipated. Facebook has fell as low as $17.xx, and is now on the rebound towards its IPO price. Notwithstanding the massive capital losses suffered by those who bought into the over hyped IPO against my admonitions, or the losses suffered by those who bought in the Sell Side powered private offerings which was actually valued higher than the majority of trading time as a public company, the argument is being made that Facebook has finally got the mobile thing and can’t be valued using conventional metrics due to its status as a high growth company.

Wait a minute! Facebook as a high growth company is actually growing revenue SLOWER than its biggest and better capitalized competitor – Google! Considerably slower!  While it’s perfectly prudent for the management of a high growth company challenged for market share in a fast moving industry undergoing a paradigm shift, results must result from said efforts. Google is out Facebooking Facebook. Reference I Don't Think Facebook Investors Will "Like" This!!! Google Has Already Caught Up In Terms Of Active Users

In my previous warnings of Facebook euphoria, I brought up the topic of growth many times, particularly active user growth. Reference The World's First Phenomenally Forensic Facebook Analysis - This Is What You Need Before You Invest, Pt 1, while remaining cognizant that this was written exactly 1 year ago:

Thus, it is highly unlikely one can legitimately factor in the type of growth needed to justify the current Goldman $50B valuation - particularly when you consider that Facebook's growth is already slowing!

Well, let's see if I had a valid point now that we have clear and convincing historical evidence from which to base our analysis... (click any of these graphics to enlarge to print quality size)c

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At this point, I can't help myself. I MUST point out the literal rippoff that Goldman Sachs pushed as a once in a life time investment a year and a half ago. As excerpted from Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman's Pricing: Here's What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week! while remaining cognizant that this was written exactly 1 year ago:

Goldman warns, 'We’re probably going to dump this load, but we may also need you to remain behind to hold the bag!'

In its offer for the $1.5bn stock sale of privately held social-networking company Facebook,Goldman Sachs disclosed that it might sell or hedge its own $375m investment without warning clients. Under the deal, private wealth-management clients would be subject to “significant restrictions” limiting their ability to sell stakes while Goldman Sachs own holding can be sold or hedged at any time, and without warning. One would hope that astute clients and investors would be put on guard by such conflicting and restrictive liquidity measures! In addition, it appears as if Goldman Sachs failed to disclose its clients that it had offered Facebook shares to its internal investment group, Goldman Sachs Capital Partners, headed by one of its star fund managers, Richard A. Friedman.

So, this begs the question, "Has the easy money already been made Facebook???" Well, let's take an empirical look now that we have some hard data to steer us throught that sell side fog, that very same fog that people pay me to clear.... (click to enlarge to printer size)

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'Nuff Said!

I’m available to discuss this in detail with all professional and institutional subscribers via Google+, or phone.

Is It Now Common Knowledge That Goldman’s Investment Advice Sucks??? Tuesday, 25 January 2011

It's official, the mainstream media has turned on those "doing God's work" and come to the side of BoomBustBlog.

I must admit, I was shocked when I first read this headline and saw the accompanying cover. After all, Bloomberg was the organization that published a story lavishing adulation upon a young Goldman analyst that had a 38% win rate throughout the credit crisis and (faux) recovery. I see those results as mediocre at best, and downright horrible from a realistic perspective. To make matters even worse, I believe I ran circles not only around that analyst, but the entire firm, see Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?

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knowless's picture

What's the next hit? With such dominance in mainstream social media, how and who is going to break the trend without significant alterations to civilizations understanding of privacy?

Overall decline and diversification? Choice in mixing user platforms?

The individual social sites are still so proprietary, you can plus one on the infotainment ones and have that info sent to theirs, but it still seems like user ability to manage content across varying streams while not having to deal with a single artificially powerful entity makes the most sense.

Anyway, that's all i got typing wise on the issue of Facebook.

Kantbelieveit's picture

Zuckerberg doesn't have a clue about the long-term future of social media. Sooner or later, he will miscalculate and suffer a public relations disaster that destroys Facebook's reputation. His goal is aggrandizement - getting big for the sake of getting big; it is a reflection of Zuckerbergs unbalanced and immature personality. Zuckerberg doesn't give a flying click for civic responsibility, social capital, or personal privacy. He is an ego-fueled businessman. Such a person cannot build an enduring social network, because he lacks humanistic morals. He will end up selling people into Chinese gulags or driving people to suicide by selling their privacy to the highest bidder. He is a huckster trading in human relations.

scrappy's picture

Yes it is iNT gathering, but remember, it cuts both ways.


BS Data Rights is the new 21c Human Rights issue.


And this is bad for National Security in my view.


Jee, who would want to undermine U.S.


Follow the money...





q99x2's picture

Don't need members when you have fraud.

Cable Guy's picture

I know alot of people that are obsessed with FB.  They log on throughout the day.  They share their entire life FB.  That's pretty vanuable stuff once they figure out how to monetize it.  And I think there are millions of users.  You can dispute the overall number, but its well into the millions.  My bet is that in 10 years, FB, and Google, will be triple what they are now.....

GreatUncle's picture

Personal opinion "stay well away from facebook". Why?

Well Google, Microsoft and Apple, all old names really and a bit like an old corporation they get there in the end the wheels turning slowly. Fall under their wheels and you would be crushed but plenty of time to move out of the way.

Facebook, vroom, pile of dead bodies behind them. They ran everybody over before they even touched the brake. Let alone then going in reverse and vroom now you been run over twice. Facebook is a speed freak desperate to impact the market in such a short space of time. Reflected in the way it bends it own rules to make larger profits and that's when you get run over.

What Facebook needs is the reputation of time and how it behaves sadly lacking hence touch it at your peril. It also means the management older and more mature then you may end up with a classy product.

Not anti Facebook, more like don't care not using it for at least another 7-8 years when the reputation of time they have finally earned and those running the show a bit have grown up a bit in how to treat people.


scrappy's picture



This is a frontel assualt on wht we should all have in the 21st c.


Data Rights.


FB is the worst overt offender, what about the rest of the corps. and datamining co.s???


We best get a handle on this.


Get educated.  https://www.eff.org/

cornflakesdisease's picture

Facebook is useless to me.


1.  It isn't very customizable in the least and works poorly navigation-wize.  Like Apple and Microshaft, "It's gonna tell you how you can use your computer, gadget, etc."

2.  It helps my business in no way at all. It is useless.  It does however help people spread bad info about your business if you screw up.

3.  It's core user is broke and has no money i.e. young people.

4.  It's a fad and it is tedious, time consuming, and waining in popularity (much like TV and major news organization that continue to fizzle every day.)

It's limitied success can be attributed to the old 60's pop music expression, "I'll sign you up because I'd hate to be wrong."

It's the good looking lead singer of some new group.  Only trouble is, he can't sing or play an instrument, and your stuck with a 2 record contract with this turkey.

cornflakesdisease's picture

Facebook is useless to me.


1.  It isn't very customizable in the least and works poorly navigation-wize.  Like Apple and Microshaft, "It's gonna tell you how you can use your computer, gadget, etc."

2.  It helps my business in no way at all. It is useless.  I does however help people spread bad info about your business if you screw up.

3.  It's core user is broke and has no money i.e. young people.

4.  It's a fad and it is tedious, time consuming, and waining in popularity (much like TV and major news organization that continue to fizzle every day.)

It's limitied success can be attributed to the old 60's pop music expression, "I'll sign you up because I'd hate to be wrong."

RebelDevil's picture

How about Facebook as an activist platform?

That's the best thing that I see in Facebook - to spread the word!

machineh's picture

You make Facebonk sound like CB radio back in the daze.

10-4 good buddy ...

moneybots's picture

Goldman's investment advice does not suck for Goldman.  After all, Goldman is competing against their clients.  Who has the inside information?  Goldman.  Who is selling what Goldman is telling the client to buy?  Goldman.  So which is going to be the one to make money on the deal?  Goldman.  The muppet is left holding the bag, while Goldman laughs all the way to their bank and at the muppet they just fleeced.

Several years ago, 8 brokerage analysts SIMULTANEOUSLY placed buy recommendations on GOOG.  The stock was going into double top resistance at 513, at the time.  Want to guess what direction the stock went?  It dropped some 70 dollars a share in the next month or so.  Brokerages were looking to dump a stock they knew was going down.  Thus they recommended buying it.

The brokerage is not a neutral advisor, giving objective advice.  They have a vested interest in giving BAD advice.  They are not a client's ally, they are a client's adversary.

After the 2002 bottom was in, Smith Barney ran ads telling people not to sell.  Well, the borkerages were buying at the bottom and if people continued to sell, it would be the brokerages losing money.  Smith Barney wasn't telling the public not to sell, for the publics benefit, but their vested interest.

Goldman talks of a new regime, a new dynamic, as the market closes in on the all time high, but a look at the chart page in IBD, shows distribution days recently.  If there is a new dynamic, there shouldn't be distribution days.



ebworthen's picture

I'd mail my Pet Rock to Zuckerburg but it still has sentimental value.

rlouis's picture

I'm doing my best to help shrink FB - I see I'm not alone. Bloomberg must be desperate to maintain credibility if they've turned on GS - lol - the rats.

Thanks Reggie, enjoyed your analysis. 

JustObserving's picture

Maybe you may want to use Google Trends:

Dec 2012

FB 100

Google+ 0

Twitter 6

Instagram 1

Linkedin 1 


Jan 2103

FB 96

Google+ 0

Twitter 6

Instagram 1

Linkedin 1 



Hedge Fund of One's picture

Check out TastyTrade's epic rap battle: Facebook vs. Twitter

richard in norway's picture

Come on Reggie, rip into Microsoft which is Google's real target

toxic8's picture

when's a good time to slap a short on this sucker?

ebworthen's picture

Careful, you've got the FED and CALPERS on the other side of that trade.

dark pools of soros's picture

Does Reggie officially work for Google now or is it still a wink wink as he buries appl, fb and anything else non google?

alien-IQ's picture

The only thing more annoying to me than his Google obsession is how he relentlessly speaks in third person. The only two characters I have ever seen speak in third person more often than Reggie are Herman Cain and Elmo.

There are some psychologists that have suggested that speaking in third person is a way of distancing oneself from responsibility for the statements being made therefore if the statement is proven wrong...it wasn't really "you" that said it but rather the "theoretical you". This somehow seems to fit Reggie quite nicely. One fine example of which is when Google had that catastrophic earnings report and suddenly...Reggie's computer was down and he couldn't comment on it.

Ironically, the name of the study from which the above observation is found is called "Identifying and Understanding the Narcissistic Personality".

If you search the planet to find a word that describes Reggie, I doubt you would be able to find one more fitting than "Narcissistic".

bank guy in Brussels's picture

Reggie had pooh-pooh slammed the new Blackberry phone saying it was nothing much special, but it was clear he hadn't really looked at it very closely, was just knee-jerking as a Goog fanboy

Interesting that a tech computer geek like Karl Denninger thinks the new Blackberry Z10 - BB10 phones might be the best thing out there, because of perhaps the first really good browser on a mobile phone, as well as the other features like much better security etc.

Denninger has taken apart Google's Android software and phones and says they are shite ... and he pointed out how Blackberry phones are getting US $1500 bids on eBay

Denninger writes:

« Android's browser sucks and does not work properly ... It either won't load the site at all or mangles it beyond usability.

This is where BB10 wins, provided the browser is there.

This is where BB10 wins for any site where the option exists to use the web browser, and that's a lot of them.

And it's a unique advantage, at least for right now -- because none of the other systems are worth a damn when you try to do this.

Nobody is paying attention to this but it matters, a lot, to business and professional users.  Being able to get online and actually see and interact with a conventional web page is an essential function.  And none of the other phones can do it properly.

This is where BB10 will win, and win large. »


adr's picture

I get 100% of the web on my nearly three old Android phone. New Android phones have a stock full fledged Chrome browser.

BB10 looks a bit better than iOS, but iOS hasn't ever changed, so it doeasn't say much. The Z10 isn't even in the same class as the GSIII, and barely matches $100 Android phones. The Z10 doesn't even have a Gorilla glass screen, and is prone to scratching easily.

Apps and content are priced 25% higher in Blackberry World that the Play store or even the App store.

When the Z10 goes on sale in the US in March it will be two generations behind in tech going up against quad core 1080p screened Android phones. Plus Samsung has now released a secure enterprise system for Galaxy devices.

dark pools of soros's picture

Good points.. I'll have to check it out.   iPhones give you about a 60-70% web experience.. you go in knowing a bunch of stuff won't work but it is at least graceful (non crashing) in excluding it

Element's picture

ssssch! ... you're upsetting the suckers

(what's the bet faceplant gets a public bailout ... eventually?)

mjcOH1's picture

I'd say 0%, with GM on multi-billion dollar bailout #3 by the time Facebook gets bought out by a hip-hop star with big hair

Now for the real question - can a Bieberized Facebook compete with TimberSpace?

francis_sawyer's picture

No need for a 'taxpayer' bailout... It's an INTELLIGENCE GATHERING operation... & as we all know, they're fully funded by drug money laundering...