lot of people were expecting the stock to go down, but it is up from $20 --> $22
are underwritters / banks buying back to bolster stock price?
any theories?
Facebook stock up after the lockup expires...
By permanent_marker Follow Wed, 14 Nov 2012, 11:40am 1,164 views 11 comments
In Mountain View CA 94041
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Yeah, talk about confusing. The Dow is down by more than 100 points, and most of the market is red today. One theory is that the market already priced-in the lock-up expiration, possibly over-reacting on the downside, and it is now normalizing to where it should be. I find a 12% rally with 3-4x average trading volumes and a flood of new shares a little odd, but who knows. It LOOKS like a pump-and-dump, but we'll have to wait & see if someone was actually pumping it. Given that the company's GAAP numbers went from net income in Q3 2011 to a net loss in Q3 2012, and that the market responded to this with another rally, there is still way too much hype around the stock and too many large players involved in keeping it super volatile.
If you want quick money, go to Vegas. If you want a solid long-term investment, there are dozens of other established stocks that make more sense. This one still has too much hype around it and too much attention from speculators. You will only make money on it if you are an insider.
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If you needed to buy millions of shares, today was the perfect day. Stock market down, lock-out period ending to create liquidity and still bid up all day.
It's a classic sign that someone is targeting FB and loading up. I would be a buyer.
Or it could be like Yelp, a little more run up after lock-up and come crashing back down. lol
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I would avoid FB stock.
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zzyzzx says
Yeah, I avoid it (and many stocks) the same way that I avoid the roulette table. Shit, the roulette table has better overall odds I think...47.4% chance of 200% return. Facebook is particularly risky given how much hype there still is in the market, and the major players that can easily manipulate the stock price for their own return (at MY expense).
Big companies that provide basic necessities and give dividends...yes please. I'll leave day trading to the day traders.
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Another mini-rally today. Any theories?
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No ideas here.
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bmwman91 says
Facebook has by far the most interesting advertsing tool prospectively. If they can figure out how to gather data, measure the data, and quantify the benefit to advertisers in a focused way, it would be the most powerful and profitable tool in the world. Williams Sonoma spend 20M to create, print and mail their catalogs. that money will be easily replaced by Facebook prospectively.
Advertising is a huge business, just look at the NFL contract and what the Los Angeles Dodger will get locally (5X more than 10 years ago). It's growing exponentially.
For example, one of my friend runs a kareoke business hardware/software/download service. It would be their wet dream to be able to reach Kareoke enthusist, all 100K of them spread out in this world. Facebook is their platform.
It's already a 4B a year business. These things have little cost of goods sold. Potentially, FB could be a 80% gross margin and 40% profit margin type business. That's why its an investment case. Executing of course is the key. If you think that is not possible, look at BIDU another advertising company that already achieved 60% profit margins for several years.
It's really tough, two years ago, everyone is on their computer and they were collecting Zynga royalties, now everyone is on the Iphones/pads. When they went public, there was this annoying FB advertising fiasco everyone hated, now that is corrected and gone. In the end, FB have by far recruited the best collection of talent in the world overall so I would not sell them short.
Man, I love business strategies.
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Ah, Facebook. The single thing that just zapped a huge chunk of productivity gains made by technology, and the internet. Where else can a person share useles and mundane daily activities with others who couldn't give a shit less?
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i used my gambling money to short-term trade facebook. buy at $21.7x. sold last week at $24.yy.
it's super volatile and scary.
i also tried to buy fb when it IPO'd but i got locked out because the computers couldn't handle the order volume. i'm really happy/lucky that i was able to successfully cancel my buy order that day; in hindsight, that the price should have, but didn't drop below $38.00 was a sign i should not have been on the buy-side since there was heavy selling pressure but from what i read the investment banks were propping it up to keep it above the $38.00 IPO price.
i also traded zinga for a tiny profit going long, despite it falling in price about 85%+ percent. got out just in the nick of time on that one. lol.
my biggest mistake so far this year was selling a large chunk of my total-market fund and going to cash in my 401k, i actually timed it well and got out close to a top in march (i think or maybe april/june - too lazy to look it up), but didn't believe the rally and missed the run up from june to october. i could have got back in a few weeks ago at what i sold at, but i'm a bit cautious and think there may be some down side and i can get back in at a better price. it's all kinds of fucked up though because of bernake and QE3 ($40B/month buying MBSs will do that); the fed has a huge influence ("don't fight the fed) and because of that you need to understand the economy as well as the feds influence on it
i'm considering buy some more of the total market fund to increase my equity exposure a bit since i'm not anywhere confident of being able to predict the market direction today, even though i'm negatively biased.
good news is i haven't taken a capital loss so far this year on any position which is great (and slightly lucky).
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Hysteresis says
Hysteresis
Facebook will be a premiere stock for Option trading, a la Apple.
The best way to play Facebook and Apple (For people like us) in my opinion is to use vertical call strategy.
Heck, even a long call is better than owning outright.
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I was thinking about the greatest acquisition of all time and damn, Google's acquisition of Youtube must be the greatest ever. 1.6B. Youtube is worth at least 50B. MTV, Viacom execs should be fired for letting this one go to Google. Just young Google execs kicking old Viacom execs ass.
WTF, Gangnam style 1B views in 5 months. What an advertising monster this will become if not huge already.
It's the reason why I don't underestimate Facebook. Advertising is huge business and the format is dynamic and profitable long term. Youtube will be a 50% profit margin huge growth type business. (I know Thomas will disagree)