Facebook IPO Prices At $38/Share

Tyler Durden's picture




 

Finally, we can move on:

  • FACEBOOK SAYS 421.2 MLN SHARES PRICED AT $38-SHR

Now, all that Facebook needs are those elusive +/-25 billion users to "grow" into its "valuation." We only have four outstanding questions:

  1. What is Ben Bernanke's IPO allocation?
  2. Does the CIA use tax or cost basis accounting?
  3. When do the puts start trading?
  4. What is the fair value of Like relative to intrinsics and is Bruno Iksil long or short it?

Finally, from the inimmitable Andy Borowitz:

A Letter from Mark Zuckerberg

About Facebook’s IPO

MENLO PARK, CA (The Borowitz Report) – On the eve of Facebook’s IPO, Founder and CEO Mark Zuckerberg published the following letter to potential investors:

Dear Potential Investor:

For years, you’ve wasted your time on Facebook.  Now here’s your chance to waste your money on it, too.

Tomorrow is Facebook’s IPO, and I know what some of you are thinking.  How will Facebook be any different from the dot-com bubble of the early 2000’s?

For one thing, those bad dot-com stocks were all speculation and hype, and weren’t based on real businesses.  Facebook, on the other hand, is based on a solid foundation of angry birds and imaginary sheep.

Second, Facebook is the most successful social network in the world, enabling millions to share information of no interest with people they barely know.

Third, every time someone clicks on a Facebook ad, Facebook makes money.  And while no one has ever done this on purpose, millions have done it by mistake while drunk.  We totally stole this idea from iTunes.

Finally, if you invest in Facebook, you’ll be far from alone.  As a result of using Facebook for the past few years, over 900 million people in the world have suffered mild to moderate brain damage, impairing their ability to make reasoned judgments.  These will be your fellow Facebook investors.

With your help, if all goes as planned tomorrow, Facebook’s IPO will net $100 billion.  To put that number in context, it would take JP Morgan four or five trades to lose that much money.

One last thing: what will, I, Mark Zuckerberg, do with the $18 billion I’m expected to earn from Facebook’s IPO?  Well, I’m considering buying Greece, but that would still leave me with $18 billion.  LOL.

Friend me,

Mark

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Thu, 05/17/2012 - 16:13 | 2437043 in4mayshun
in4mayshun's picture

Someone is going to become rich shorting this POS.

Thu, 05/17/2012 - 16:17 | 2437076 vast-dom
vast-dom's picture

FuckBook will shit fan at $31 close tomorrow -- yes i am calling this turd!

Thu, 05/17/2012 - 16:20 | 2437096 Ahmeexnal
Ahmeexnal's picture

Facebook IPO??? more like..failbook IPO

Thu, 05/17/2012 - 16:25 | 2437123 vast-dom
vast-dom's picture

FACEBOOK, CREATED BY DOUCHEBAGS FOR DOUCHEBAGS, EXCLUSIVELY.

Thu, 05/17/2012 - 16:44 | 2437232 HeNateMe
HeNateMe's picture

Zerohedge Comments, created by Tyler Durden for Douchebags who make categorical Douchebaggy statements.

Thu, 05/17/2012 - 16:53 | 2437262 MillionDollarBonus_
MillionDollarBonus_'s picture

My first price target is $100, followed by $200 shortly after. Buy while you can as this buying window will NOT last for long. FB is going to be the next AAPL, but not everybody will be smart enough to buy now while it's still cheap.

Thu, 05/17/2012 - 16:56 | 2437286 CharlieSDT
CharlieSDT's picture

Last year Facebook had $3.8 billion in revenue, not profit, just revenue. We don’t know how profitable Facebook is because it’s a private company. Let’s say Facebook’s executive team is absolutely stellar and they have even better margins than Google with 27.5% (Google achieved 25.7% profit margin in 2011). That would mean they earned $1.045 billion in profit which would imply a P/E ratio of 95.7 and a return of only a little over 1% on your investment.  That's a pretty bad investment which does not begin to keep pace with inflation.

 

But of course on Friday, there will be a mass IPO hysteria and all sorts of retards will bid the stock up to ridiculous levels, and yes, Facebook will reach and probably exceed that 100 billion valuation. Then I will wait impatiently for a week or two for people to write some puts. On a long enough timeline, I guarantee you, Facebook is a losing investment and I can’t wait to take the other side of that bet.

 

http://www.singledudetravel.com/2012/05/why-facebook-isnt-worth-100-bill...

Thu, 05/17/2012 - 16:59 | 2437296 Dr. Richard Head
Dr. Richard Head's picture

P/E ratios?  What do you think this is?  A real market?  pfssst

Thu, 05/17/2012 - 17:01 | 2437303 TheFourthStooge-ing
TheFourthStooge-ing's picture

pets.com

 

Thu, 05/17/2012 - 17:35 | 2437327 AlaricBalth
AlaricBalth's picture

Options start trading May 29. Plenty of time to raise cash for the Put of your life. Hopefully it trades LEAPS. I figure the July 2014 35's puts will be well in the money by then.

Thu, 05/17/2012 - 19:13 | 2437776 smlbizman
smlbizman's picture

add all the hype of all the superbowls up and it still would not add up to how much this thing has been hyped...

Thu, 05/17/2012 - 20:25 | 2437942 hedgeless_horseman
hedgeless_horseman's picture

 

 

5.  When does the lock-up period end?

Thu, 05/17/2012 - 23:48 | 2438328 The Big Ching-aso
The Big Ching-aso's picture

 

 

The last sucker, I mean investor, who buys this from a really really bright seller please turn off the IPad.

Thu, 05/17/2012 - 17:59 | 2437563 tallen
tallen's picture

Cramer: Facebook Could Hit $70 On First Day

http://www.cnbc.com/id/47452321

For shits and giggles.

Thu, 05/17/2012 - 18:53 | 2437711 The Big Ching-aso
The Big Ching-aso's picture

 

 

I bet if they ever do a Faceporn IPO they'd make some really obscene profits.

Thu, 05/17/2012 - 19:04 | 2437751 Stuck on Zero
Stuck on Zero's picture

At this point we need some Chinese accounting firm to do an analysis of Facebook and publicly announce the company is only worth $4 a share.  Why not?  We do it to their IPOs.

Thu, 05/17/2012 - 23:47 | 2438421 The Big Ching-aso
The Big Ching-aso's picture

 

 

Initial Public Offaling?

Thu, 05/17/2012 - 20:52 | 2437987 Blizzard_Esq
Blizzard_Esq's picture

1. Facebook took $3.7 billion in revenue last year and producing $668 million in net profit off that income

 2. 44 percent of Facebook’s revenue last year (or about $1.63 billion) came from outside the United States

3. Facebook's revenue per  USA user (157 million users) is about $13.37 in 2011. 

4. Facebook's revenue per Foreign user (733 million users) is about $2.21 in 2011. 

5. Facebook's PROFIT per user in total per year is about $0.75. 

6. Google produced an estimated $24 per user in 2011.

7. = Facebook has a long way to go in foreign markets and even if they reach parity with US market users they are not going to be make a lot of money.....tops is nowhere near the Apple and Google horde. 

 

Fri, 05/18/2012 - 06:29 | 2438846 BorisSDT
BorisSDT's picture

Where did you get these numbers?

Fri, 05/18/2012 - 13:36 | 2440780 Blizzard_Esq
Blizzard_Esq's picture

Most of it came from: 

http://www.digitaltrends.com/social-media/inside-facebook-what-sec-documents-reveal-about-the-social-networking-monolith/ which itself cites the SEC S-1 Document Facebook filed. 

FACEBOOK REGISTRATION STATEMENT:

1. Page 50: the profit per user in USA vs foreign was just extrapolating the revenue and dividing by user counts.

"In 2011, we generated approximately 56% of our revenue from advertisers and Platform developers based in the United States" -- Ergo 44% overseas.

The Prospectus Summary states: "We had 845 million MAUs as of December 31, 2011"

Recently Google's DoubleClick estimates 890 million users.

 

Sun, 05/20/2012 - 12:00 | 2445149 BorisSDT
BorisSDT's picture

Great thanks.  So how did they get from $677 million there to the $1 billion net income for 2011 they're now claiming?

Thu, 05/17/2012 - 21:37 | 2438102 Buck Johnson
Buck Johnson's picture

What I hate the most is the fact that CNBC was pumping this stock all day let alone all week.  This is outrageous, they didn't put that much power into other stocks.  I feel a 31 dollar a share day.

Thu, 05/17/2012 - 23:22 | 2438365 Problem Is
Problem Is's picture

If you have not figured out by now CNBC is full of fiucktards, liars and propagandists and shut the fucking TeeVee off...

I can't help you...

Fri, 05/18/2012 - 01:40 | 2438645 pq7
pq7's picture

"$1 billion was Facebook’s net income (read: profit) in 2011. This is pretty solid given growth from previous years: $229 million in 2009 and $606 million in 2010."

 

source: http://www.zdnet.com/blog/facebook/facebook-ipo-final-numbers/13257

Thu, 05/17/2012 - 17:07 | 2437330 jus_lite_reading
jus_lite_reading's picture

My first price target is $2000, followed by $3000 shortly after...

Oooops. Sorry, I was talking about gold...

All I will say about Farcebook is... compare GOOGLE's valuation and revenues and then look at Farcebook...

Like Tyler said, unless every man woman in child in India, China, Africa, Mars and Jupiter start "signing up" this price is absurd as LNKD, JCP, NFLX and YELP's business models...

Thu, 05/17/2012 - 19:04 | 2437750 Matt
Matt's picture

I just think the 99X P/E is a bit rich. The company itself is actually making profits; with Dot Com there were companies that didn't even have revenues, let alone profits, going for IPO. I am sure it will settle down to a much lower share price within a few months, barring the requested $4 trillion QE3.

Thu, 05/17/2012 - 17:25 | 2437368 ebworthen
ebworthen's picture

MillionDollarBonus said:

"FB is going to be the next AAPL"

Reminders:

MySpace

AOL

Netscape

HP

Compaq

Enron

...

Thu, 05/17/2012 - 19:16 | 2437787 The Alarmist
The Alarmist's picture

Does GM also fit in with this rogues gallery?

Thu, 05/17/2012 - 21:22 | 2438056 Spastica Rex
Spastica Rex's picture

I think they're big in China.

Thu, 05/17/2012 - 23:56 | 2438438 James-Morrison
James-Morrison's picture

I've traded AAPL after I owned a few apple products.

I've traded GOOG and I use it daily. 

I don't use Facebook.   I kicked the tires but it seems like a MIP burner to me.  I'll pass...

 

Fri, 05/25/2012 - 19:34 | 2464022 exartizo
exartizo's picture

Ummm... you look a little bit like Jamie Dimon on steroids (or crack).

Thu, 05/17/2012 - 16:59 | 2437298 IMA5U
IMA5U's picture

learn to use it

 

douchebagz get laid

Thu, 05/17/2012 - 16:26 | 2437130 in4mayshun
in4mayshun's picture

Dividends will be paid in "Likes" and "friend requests."

Thu, 05/17/2012 - 16:28 | 2437137 derek_vineyard
derek_vineyard's picture

somehow i get spam from a company called 'fuckbook'  (only spam i look at)

when's their IPO?

Thu, 05/17/2012 - 16:35 | 2437184 in4mayshun
in4mayshun's picture

Now those friend requests would be worth something...

Thu, 05/17/2012 - 16:47 | 2437240 Dr. Richard Head
Dr. Richard Head's picture

I would buy into the redtube or youporn ipo in a heartbeat.

Thu, 05/17/2012 - 17:40 | 2437478 sgt_doom
sgt_doom's picture

http://www.pcworld.com/article/190650/narus_develops_a_scary_sleuth_for_social_media.html

Narus is developing a new technology that sleuths through billions of pieces of data on social networks and Internet services and connects the dots.

The new program, code-named Hone, is designed to give intelligence and law enforcement agencies a leg up on criminals who are now operating anonymously on the Internet.

http://www.wired.com/epicenter/tag/narus/

http://www.facebook.com/note.php?note_id=339793017605

http://internetsgovernance.blogspot.com/2011/02/egypt-crisis-egypt-is-burning-and.html

http://ccicada.rutgers.edu/Workshops/ResearchRetreat/2010.03/Bhagat_hone-mar8.pdf

 

 

Thu, 05/17/2012 - 18:24 | 2437646 B-rock
B-rock's picture

What kind of beat?

Thu, 05/17/2012 - 17:18 | 2437352 LouisDega
LouisDega's picture

Don't feel bad. I get spam for Ron Jeremys patented peter pumper 

Thu, 05/17/2012 - 16:47 | 2437241 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Hey, you're Dutch right? Then you'll remember World Online which was also around the stock market top.

Thu, 05/17/2012 - 19:11 | 2437772 Manthong
Manthong's picture

And tulips might be a fitting analog.

Thu, 05/17/2012 - 16:25 | 2437126 ZeroPower
ZeroPower's picture

Not before hitting $60 at least.

It'll finally open for secondary trading at $40+, then will explode higher based on shitty retail orders.

Revisit this post tomorrow, just watch. The big boys are supporting this to no-end and will be scooping up shares the second it gets close to the offered price..

Thu, 05/17/2012 - 16:28 | 2437136 onelight
onelight's picture

I guess that means the markets find a bottom tomorrow...thank God for fundamentals 

/sarc

Sat, 05/26/2012 - 01:15 | 2464598 ska11153
ska11153's picture

good call

Thu, 05/17/2012 - 16:25 | 2437128 homersimpson
homersimpson's picture

Put me down for $25, and low as $19. 421 million shares? $25/share still puts them at a valuation close to $100 billion if they sell all 421 shares (which they won't at $38).

Thu, 05/17/2012 - 16:29 | 2437146 Seize Mars
Seize Mars's picture

Oh it's shit alright. Like BATS - shit.

I give it 100 milliseconds beofre it hits actual zero.

Thu, 05/17/2012 - 19:26 | 2437821 CClarity
CClarity's picture

An awful lot of you don't get it.  FB is neither a fad nor a joke.  It is destructing social and the genie is out of the bottle.  But, you'll see for yourselves soon enough.  If you're not using it regularly you just won't get it.  GM's problem.  Ford doesn't have the same problem.  The point is targeting via data aggregation, not pablum adverts for any 'ol eyeballs.

Discussion to be continued.

 

Thu, 05/17/2012 - 16:30 | 2437154 derek_vineyard
derek_vineyard's picture

vast--fuck book is a name already taken by another company

google it

Thu, 05/17/2012 - 16:17 | 2437079 ACP
ACP's picture

Depends on whether or not they get a multi-billion dollar contract with the NSA...

Thu, 05/17/2012 - 16:44 | 2437221 onelight
onelight's picture

well, it seems like they ARE a multi-billion dollar contract with the NSA...

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