patrick.net

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.

John Bailo says

It's a 300 stock...

you better load up on it!

it can't miss!

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.

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.

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!"

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.

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. . . .

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

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.

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

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.

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

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.

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!

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

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

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

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

MershedPerturders says

ya and selling your private data to the NSA.

Privatized selling of data :)

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!!

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.

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?

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 ;)

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?

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?

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.

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.

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.

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.

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!

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?

I drive a Ferrari, make millions, in fact, I don't have to work at all. I have so much disposable time I can brag about it on Pat.net.

Just letting you guys know so you won't think I consider this site or your peasant responses important. Peasant fucks.

btw, I'm a Christian. God is good. He's always protecting my hoard of wealth.

p.s - I love you SFace.

E-man says

To show you that people have other purpose in life.

Tenants and toilets and purpose in life do not belong in one sentence, IMO. Landlording is something you fall back at in your old age or after you fail at anything productive. To flaunt this as your sole occupation and purpose in life all over the Net is bizarre.

Straw Man says

Tenants and toilets and purpose in life do not belong in one sentence, IMO. Landlording is something you fall back at in your old age or after you fail at anything productive.

Yeah man. Someone who claims they can sit on their ass from one of the most unproductive activities in a capitalist society claiming they have a purpose. What is the world coming to?

E-man says

Jealousy I see. I started my journey right here on Patnet as a newbie in 2009. I didn't listen to the bears and have made millions for myself, my family members and a couple of investors including someone I met on Patnet. Now you call that waiving dick? Sure, whatever you say.

I'll let you know when I get "jealous" of someone bragging about their wealth and millions on the internet. Hasn't happened yet, and there are a lot of you on Pat.net!

E-man, but how rich are you, and can you tell us more about it?

Straw Man says

E-man says

To show you that people have other purpose in life.

Tenants and toilets and purpose in life do not belong in one sentence, IMO. Landlording is something you fall back at in your old age or after you fail at anything productive. To flaunt this as your sole occupation and purpose in life all over the Net is bizarre.

Actually, I call that forward thinking. I'm building an asset class that will take care of my family and my heirs for years to come. Anyways, gotta run now. Chat later.

E-man says

I didn't listen to the bears and have made millions for myself, my family members and a couple of investors including someone I met on Patnet.

How did you make millions since 2009? Flipping homes?

nw888 says

How did you make millions since 2009? Flipping homes?

Definitely not bragging about it on Pat.net.

E-man says

Why screw around with stocks when we can build equity at this pace. :)

Well, if you had put $400K in SRS at $20 you would have made $100K in a couple of weeks as it is approaching $25 now, of course before capital gains tax. That seems to beat flipping homes to me. But what makes real estate so interesting (and dangerous for the rest of the world) is that you get that kind of taxpayer-backstopped leverage that you would never get from your brokerage (because it could go broke instantly), plus all kinds of tax gimmicks such as no capital gains up to 250K when selling a house after 2 years or longer. And if things go south you can just walk away or whine to Obama for yet another refinancing scheme paid by the taxpayer, whereas making a huge wrong bet in stocks can definitely cream you. In that respect real estate definitely has a (mildly put) "unfair" edge.