I'm Taggin' you, You're Taggin' me

May 18, 2012 9:31 AM

Thank you Facebook! A song in celebration of the largest tech IPO in history.
posted by Potomac Avenue (220 comments total)

This is not the best of the web.
posted by gen at 9:33 AM on May 18, 2012 [13 favorites]

Got I hope Zuckerberg becomes a crazy, eccentric billionaire and starts funding moon colonies and underwater cities and cloud fortresses and COME ON WE'RE THE SAME AGE I KNOW YOU WANT THIS SHIT ZUCKERBERG
posted by griphus at 9:35 AM on May 18, 2012 [29 favorites]

Why did Facebook go public?
Because they couldn't figure out the privacy settings either.
posted by Faint of Butt at 9:35 AM on May 18, 2012 [132 favorites]

It'd be a good idea to memorize the lyrics now, by 2021 it will be our International Federation Anthem.



w-w-w. F-a-c-e-b-o-o-k. c-o-m

Facebook -- (I wanna thank you)
I wanna thank you
For bring-in' to me
My friends and family

Facebook -- (I wanna thank you)
I wanna thank you
For bringin' to me
the world community - yeah...

Everyday - you lift me up
When you notify me
Makin' the news - when I share
What's goin' on with me

Play a game, app or chat
And "Comment" when I please
Stay in the loop or in a group
and "Like" what I see -- hey yeah

Facebook -- (I wanna thank you)
I wanna thank you
For bring-in' to me
My friends and family

Facebook -- (I wanna thank you)
I wanna thank you
For bringin' to me
the world community -- yeah...

Holidays and my birthday
People blessin' me
Night and day -- any way
Got friends supportin' me

Show Photos of who we know
and what makes us happy
I'm Taggin' you -- You're Taggin' me
And we're makin' history -- yeah...

Facebook -- (I wanna thank you)
I wanna thank you
For bring-in' to me
My friends and family -- yeah...

Facebook -- (I wanna thank you)
I wanna thank you
For bringin' to me
the world community -- yeah...

Thank you, Thank you, Thank you, Thank you ---
Thank you, Thank you, Thank you, Thank you ---
Thank you, Thank you, Thank you, Thank you ---
Thank you, Thank you, Thank you, Thank you ---

Login - Facebook - it's free and will always be
Connect with friends faster -- wherever they may be
Facebook -- thanks for all the things you do
For the speed and ease in which I can connect with the crew
Always staying cool
Facebook -- you know you Rule

That's why I wanna thank you

Facebook -- (I wanna thank you)
I wanna thank you
For bring-in' to me
My friends and family

Facebook -- (I wanna thank you)
I wanna thank you
For bringin' to me
the world community -- yeah...

Thank you, Thank you, Thank you, Thank you --
Thank you, Thank you, Thank you, Thank you --
Thank you, Thank you, Thank you, Thank you --
Facebook!

So many good things you bring my way
I'm so grateful Facebook that's why I wanna say
Thank you, Thank you, Thank you, Thank you
Facebook!

posted by Potomac Avenue at 9:36 AM on May 18, 2012 [4 favorites]

crickets
posted by griphus at 9:36 AM on May 18, 2012 [8 favorites]

Well, on the upside, now we know what happened to the people in the Songsmith commercial.
posted by bicyclefish at 9:37 AM on May 18, 2012 [6 favorites]

lonely tumbleweed
posted by elizardbits at 9:37 AM on May 18, 2012 [2 favorites]

I was thinking of making a Facebook IPO thread... this is not the one I would have made.
posted by 2bucksplus at 9:38 AM on May 18, 2012

I was thinking to drop some cash on FB to make a bit of short term gain, but when I was setting up the trade page on my online brokerage account I felt dirty and decided to stay away.
posted by Burhanistan at 9:38 AM on May 18, 2012

11 corporate anthems to die for
posted by Blazecock Pileon at 9:39 AM on May 18, 2012 [2 favorites]

facebook: aol 2.0
posted by quonsar II: smock fishpants and the temple of foon at 9:41 AM on May 18, 2012 [3 favorites]

dog barking at nothing
posted by seanmpuckett at 9:41 AM on May 18, 2012 [5 favorites]

speaker/amplifier hiss
posted by jquinby at 9:42 AM on May 18, 2012 [1 favorite]

My day job is on the trading floor of a financial firm.

The people around me are having a really interesting day.
posted by EmpressCallipygos at 9:42 AM on May 18, 2012 [2 favorites]

The IPO price valued the company at 107 times trailing 12- month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential. The valuation also made Facebook, co-founded in 2004 by a then-teenage Mark Zuckerberg, the largest company to go public in the U.S.

Isn't a more normal P/E ratio like 20 or so? Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?
posted by jcreigh at 9:43 AM on May 18, 2012

nervous laughter abruptly silenced
posted by elizardbits at 9:44 AM on May 18, 2012 [2 favorites]

one woman clears her throat
posted by goodnewsfortheinsane at 9:45 AM on May 18, 2012 [2 favorites]

Audience revealed to actually be oil painting.
posted by griphus at 9:46 AM on May 18, 2012 [19 favorites]

cf. Gazprom
posted by BEE-EATING CAT-EATER at 9:46 AM on May 18, 2012

You've got to be fucking kidding me...
posted by odinsdream at 9:48 AM on May 18, 2012 [2 favorites]

Isn't a more normal P/E ratio like 20 or so? Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?

There is some irrational exuberance, and Facebook isn't all that normal.
posted by b1tr0t at 9:51 AM on May 18, 2012 [1 favorite]

I wasn't aware that the Facebook IPO happened in 1991.
posted by uncleozzy at 9:51 AM on May 18, 2012 [8 favorites]

Isn't a more normal P/E ratio like 20 or so? Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?

Because many of the people in control of America's investment capital are wholly divorced from every day reality.
posted by deanklear at 9:52 AM on May 18, 2012 [4 favorites]

scathing yet nerdy remark by Jim Parsons followed by wild laugh track
posted by elizardbits at 9:53 AM on May 18, 2012 [1 favorite]

Here's my comment to link to in 10 years, when the joke is "remember Facebook?"
posted by DU at 9:54 AM on May 18, 2012 [13 favorites]

Come on, at least we can all cheer up about Zynga just collapsing.
posted by TwelveTwo at 9:55 AM on May 18, 2012 [12 favorites]

b1tr0t: "There is some irrational exuberance"

There is irrational exuberance and then there is rolling around on piles of $1000 bills while being fellated by a hooker. Which one is this?
posted by charred husk at 9:55 AM on May 18, 2012 [3 favorites]

What's that thing called where they put a rap interlude in the middle of a song that makes you want to murder people?
posted by orme at 9:55 AM on May 18, 2012 [5 favorites]

Hypothesis: Any attempt to make a uplifting, multicultural, montage-video-backed anthem will sound like Melissa Etheridge singing over the final-credits exit music of an '80s romantic comedy.
posted by gompa at 9:55 AM on May 18, 2012

What's that thing called where they put a rap interlude in the middle of a song that makes you want to murder people?

Synergy.
posted by gompa at 9:56 AM on May 18, 2012 [21 favorites]

Also, I found the choice of using a dial-up sound for the song intro to be... odd.
posted by charred husk at 9:57 AM on May 18, 2012 [2 favorites]

What's that thing called where they put a rap interlude in the middle of a song that makes you want to murder people?

Rap Skits?
posted by TwelveTwo at 9:57 AM on May 18, 2012

Luckily it's the same length as Shoot You Down by The Stone Roses
posted by BEE-EATING CAT-EATER at 9:58 AM on May 18, 2012

Oh, I read that wrong, I thought you were asking what that interlude is in the middle of rap that makes you want to murder people.
posted by TwelveTwo at 9:58 AM on May 18, 2012

What's that thing called where they put a rap interlude in the middle of a song that makes you want to murder people?

Rapture.
posted by elizardbits at 9:59 AM on May 18, 2012 [6 favorites]

I smell #7 on K-TEL hot hits from 2012
posted by chapps at 10:01 AM on May 18, 2012

This morning, with $FB stuck at $38, the world was all possibility. Opportunity. Promise. Potential. It felt, simply, like the morning of our generation's D-Day. But then it opened, the price jumped to $42 and fell back down to $38. Sucker-punched. I don't know how to explain it, other than to say it was our generation's Pearl Harbor. Now it's climbing again, and we see that Victory may, indeed, come to America's shores. I'm in a glass case of emotion.
posted by (Arsenio) Hall and (Warren) Oates at 10:03 AM on May 18, 2012 [18 favorites]

Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?

Eh, it's either Facebook or Greece. And there's no reason to suppose that Greece won't have been replaced by some other college dorm startup in five years' time. Facebook is a comparatively good bet.
posted by Jehan at 10:09 AM on May 18, 2012 [5 favorites]

Huh, after years of being on the internet I was completely unprepared for this to be sincere. I must have watched half of it before I realized there would be no punchline.
posted by elwoodwiles at 10:10 AM on May 18, 2012

Join us now and share the software;
You'll be free, hackers, you'll be free.
Join us now and share the software;
You'll be free, hackers, you'll be free.

Hoarders can get piles of money,
That is true, hackers, that is true.
But they cannot help their neighbors;
That's not good, hackers, that's not good.

When we have enough free software
At our call, hackers, at our call,
We'll kick out those dirty licenses
Ever more, hackers, ever more.

Join us now and share the software;
You'll be free, hackers, you'll be free.
Join us now and share the software;
You'll be free, hackers, you'll be free.
posted by flabdablet at 10:10 AM on May 18, 2012 [4 favorites]

Wait a minute. LinkedIn had an IPO? And now is worth 10B?

That is wrong on so many levels.
posted by DU at 10:12 AM on May 18, 2012

I listen to the radio as I work for most of the day, and I gotta tell ya, the constant updates about Facebook's share value are fucking annoying.
posted by KokuRyu at 10:13 AM on May 18, 2012 [1 favorite]

The real estate market in California is going to go crazy.
posted by TwelveTwo at 10:14 AM on May 18, 2012

The real estate market in California is going to go crazy.

Crap, I just read an article about how it's already begun. Houses are getting double over asking price and so on.
posted by griphus at 10:16 AM on May 18, 2012

I still can't figure out what LinkedIn actually does.
posted by shakespeherian at 10:17 AM on May 18, 2012 [4 favorites]

I still can't figure out what LinkedIn actually does.

It's like the "no soap, radio!" of social networking.
posted by elizardbits at 10:18 AM on May 18, 2012 [5 favorites]

All LinkedIn does is send me spam telling me some person I've never heard of "is in my network". FUCK YOU LINKEDIN!
posted by You Should See the Other Guy at 10:18 AM on May 18, 2012

TwelveTwo: The real estate market in California is going to go crazy.

Huh. I hadn't thought about that. This could make state finances a lot more interesting in the next year or more. Given the budget cuts proposed to offset the increasing deficit (estimated at 9.2 BILLION in January, now up to 16 BILLION a mere FOUR MONTHS LATER), perhaps Facebook's IPO could really help California? Or will it be a series of ridiculously short rollercoasters of boom and bust?
posted by filthy light thief at 10:19 AM on May 18, 2012

It's like OKCupid but for paperwork.
posted by griphus at 10:19 AM on May 18, 2012 [14 favorites]

Crap, I just read an article about how it's already begun. Houses are getting double over asking price and so on.

That sinking feeling is everyone outside of the Facebook IPO being priced right back out of the housing market.
posted by TwelveTwo at 10:19 AM on May 18, 2012 [1 favorite]

I still can't figure out what LinkedIn actually does.

They send you email letting you know that they exist, and that someone else used them, and that you have an account, and that they exist, and that someone wants you to join even though you already have an account, etc, etc.
posted by cortex at 10:20 AM on May 18, 2012 [14 favorites]

On the plus side, LinkedIn doesn't have a Farmville.
posted by flabdablet at 10:20 AM on May 18, 2012 [5 favorites]

Or will it be a series of ridiculously short rollercoasters of boom and bust?

That is the history of California in a nutshell. It is consistent thematically that the state is also known for its seismic activity.
posted by TwelveTwo at 10:21 AM on May 18, 2012 [2 favorites]

It's going to be a while before the lockup lifts and the IPO has a real chance to affect housing.
posted by rhizome at 10:21 AM on May 18, 2012

I think LinkedIn is Farmville for recruiters
posted by TwoWordReview at 10:21 AM on May 18, 2012 [14 favorites]

Given the budget cuts proposed to offset the increasing deficit (estimated at 9.2 BILLION in January, now up to 16 BILLION a mere FOUR MONTHS LATER), perhaps Facebook's IPO could really help California?

LOL
posted by (Arsenio) Hall and (Warren) Oates at 10:22 AM on May 18, 2012

The real estate market in California is going to go crazy.

Crap, I just read an article about how it's already begun. Houses are getting double over asking price and so on.

Pffft. Amateurs.
posted by The Card Cheat at 10:22 AM on May 18, 2012

I think LinkedIn is Farmville for recruiters

In related news, regarding Zynga: -- Zynga Trading Pauses Last Too Long Amid Facebook Difficulty.
posted by ericb at 10:23 AM on May 18, 2012 [1 favorite]

Extraordinary Popular Delusions and the Madness of Crowds.
posted by bukvich at 10:24 AM on May 18, 2012 [4 favorites]

I would try to write alternative lyrics to this song, but I don't think I really want to hear it. With that, I'll toss out things an accurate Facebook song needs to cover:

* learning former classmates are bigots and racist, without ever having real conversations with them
* endless updates from friends who are hooked on games from Zynga and similar
* friends with hundreds or thousands from college and social networking, yet you don't know anything about any of them beyond what they share on Facebook
posted by filthy light thief at 10:24 AM on May 18, 2012 [5 favorites]

Should Facebook, Zynga Consummate Symbiotic Relationship? -- "Facebook's IPO gyrations pointed out the obvious: Zynga is connected to Mark Zuckerberg's hip. Why not just seal the deal?"
posted by ericb at 10:25 AM on May 18, 2012

Since the only value in Facebook is in data mining our lives and relationships to sell advertising and monetizing our leisure and since the economy is obviously moribund and utterly unable to recover in any meaningful and lasting way from the twin catastrophes of unsustainable debt and resource peaks, the stupendous success of the Facebook IPO seems to me to be exactly and explicitly the spectacle of the very wealthy fighting over the scraps of protracted death throes of the middle class.
posted by nanojath at 10:25 AM on May 18, 2012 [8 favorites]

> I still can't figure out what LinkedIn actually does.

How and why classmates.com continues to exist is, for me, the biggest mystery on the internet.
posted by The Card Cheat at 10:25 AM on May 18, 2012 [2 favorites]

Don't knock the value of massive data mining operations, governments in the future will need such intelligence companies to keep the peace.
posted by TwelveTwo at 10:27 AM on May 18, 2012

The real estate market in California is going to go crazy.

Facebook IPO: Silicon Valley Real Estate Industry, Stock Market Eagerly Await Cash.

Flashy Wheels Hit Silicon Valley Streets Ahead Of Facebook IPO.

Silicon Valley Wealth Is Hidden, Except When It's Not.

posted by ericb at 10:30 AM on May 18, 2012

dammit, now i have the title of this thread stuck in my head to the tune of Knowing Me, Knowing You.

did not want midafternoon ABBA attack
posted by elizardbits at 10:31 AM on May 18, 2012

> I still can't figure out what LinkedIn actually does.

I work in the ad agency world, where people change jobs a lot among a large set of similar companies. LinkedIn is extremely valuable for answering the question "Hey do I know anyone from a previous job that is at that company now?" so you can get the inside scoop about what the place is like and maybe get an "in."

I LOLed at the "Farmville for recruiters" line from TwoWordReview. That's also what LinkedIn is, or Tamagochi, or Pokemon.

Anyway, trading volume on FB has dropped quite a bit over the day. The price seems to be settling in about 41.
posted by dammitjim at 10:33 AM on May 18, 2012

Given that California generally can't generate the political will to raise funds for anything using its broken proposition system, and probably isn't going to catch this in time to get the tax rates right on FB billionaires, I would say this isn't likely to patch the state's sucking head wound. I am really peevish about the real estate implications. I really wanted to move back to my home state.
posted by gusandrews at 10:34 AM on May 18, 2012 [1 favorite]

sad clown masturbating
posted by LordSludge at 10:34 AM on May 18, 2012 [4 favorites]

sad mime watching
posted by TwelveTwo at 10:35 AM on May 18, 2012 [8 favorites]

did not want midafternoon ABBA attack

Quick! Hide here!
posted by griphus at 10:37 AM on May 18, 2012

flock of pigeons disperses
posted by jquinby at 10:44 AM on May 18, 2012

Vic Reeves tells a joke.
posted by MartinWisse at 10:45 AM on May 18, 2012 [1 favorite]

Sure, Facebook doesn't make a lot of profit right now, and certainly not enough to justify their current valuation. However, they do own patents on a number of very valuable tulip hybrids.
posted by snofoam at 10:46 AM on May 18, 2012 [9 favorites]

The IPO price valued the company at 107 times trailing 12- month earnings, more than every S&P 500 member except Amazon.com Inc...

I'll just point out that Amazon is a good example to look to for why you shouldn't short Facebook. Just because "everyone" agrees a stock is overvalued doesn't mean anything will actually prompt the value to correct itself. And there may be news that causes it to go up which screws you over. Been there, cried over that.
posted by smackfu at 10:48 AM on May 18, 2012 [1 favorite]

Facebook Shares Cool After IPO.

Facebook's Underwriters Stepped In To Prop Up Share Price.
posted by ericb at 10:48 AM on May 18, 2012

Facebook IPO: Five Things Facebook Won't Be Telling You.
posted by ericb at 10:50 AM on May 18, 2012

This is like a bad music video from the late 80s/early 90s.
posted by livinglearning at 10:51 AM on May 18, 2012

Someone else is also sing a happy tune today!

Bono's Facebook Stake To Make Him Richest Rocker On Earth -- "U2 singer has more than two-percent stake in Facebook, worth $1.5 billion."
posted by ericb at 10:52 AM on May 18, 2012 [1 favorite]

I wasn't aware that the Facebook IPO happened in 1991.
posted by uncleozzy

The dial up modem sounds in the song should have tipped you off!
posted by Daddy-O at 10:55 AM on May 18, 2012

I'm stuck watching CNBC all day, and just for kicks I transcribed the last segment:

"Facebook, facebook, facebook, facebook, facebook. FACEbook. FaceBOOK. Facebook? Facebook! Facebook, facebook, facebook.

And in conclusion: Facebook."
posted by malocchio at 10:55 AM on May 18, 2012 [3 favorites]

And in conclusion: Facebook.

Malkovich Malkovich.
posted by Cash4Lead at 10:58 AM on May 18, 2012 [1 favorite]

Chicken.
posted by flabdablet at 11:00 AM on May 18, 2012 [1 favorite]

Yes, someone MUST record a "Fuck you, Facebook" song. MeFiMusic makers, I'm looking at you...
posted by oneswellfoop at 11:00 AM on May 18, 2012

also, Buffalo.
posted by oneswellfoop at 11:00 AM on May 18, 2012

Facebook = MySpace 2.0, except that MySpace never went public; they were valued at $12 billion in 2008, and $35 million at sale in 2011. There is absolutely no substance within Facebook which is worth even a fraction of this IPO, and while the tulip delusion might keep the price afloat for awhile all it will take is people getting bored of it and tired of security breaches to bring it crashing back to reality.
posted by localroger at 11:04 AM on May 18, 2012 [2 favorites]

Who thought that was a good idea? That is the worst song ever.
posted by ThatCanadianGirl at 11:07 AM on May 18, 2012

localroger: "There is absolutely no substance within Facebook which is worth even a fraction of this IPO"

Facebook is an advertisers wet dream. It's got a larger and more captive audience than pretty much any other medium today, and advertisers (both large and small) get to target their ads with an almost terrifying degree of precision.

Even if Facebook evaporates into little more than a federated login service, they'll keep their userbase (because, I mean, why not?), and still stay valuable because of the demographic data that they'll continue to collect (and sell to other services).

Crazier still, most users don't seem to mind this form of targeting, because Facebook does all of this targeting and matching internally. Facebook gets away with stuff that Google could only dream of.

Intuitively, the IPO feels overvalued to me too, which is why I'm not investing in it. However, when you consider that they've got a bigger audience than most TV networks, and a fraction of their expenses, I think I'm beginning to understand why it's worth so much. It's a completely autonomous cash cow.
posted by schmod at 11:14 AM on May 18, 2012 [1 favorite]

Facebook = MySpace 2.0,

Let's not pretend MySpace wasn't always shitty though.
posted by smackfu at 11:27 AM on May 18, 2012 [1 favorite]

and advertisers (both large and small) get to target their ads with an almost terrifying degree of precision.

Terrifying for whom? I just reloaded my FB page a bunch of times and saw ads for the Ford Fusion, McDonald's, Wendy's, a beer festival an hour and a half from where I live, survival bracelets, some kind of social marketing consultancy ("If you run your own Business, this expert will show you how to attract more customers") and our local semipro baseball team. The only one of these businesses that might conceivably get my money is the baseball team. Figuring out anything meaningful about people's tastes/desires/habits from data, even a massive amount of data, is really hard.
posted by escabeche at 11:30 AM on May 18, 2012 [3 favorites]

Even if Facebook evaporates into little more than a federated login service, they'll keep their userbase (because, I mean, why not?), and still stay valuable because of the demographic data that they'll continue to collect (and sell to other services).

If someone gets tired of Facebook, whether because they realize nobody is reading their updates, they are only getting feedback from the same few close people, or they've read another creepy story about somebody being cyberstalked via FB, there is nothing to bind them to FB. They don't even have the advantage of something like Blogger or Diaryland of being your history on the web, because FB activity is mostly ephemeral. Indeed, this is an advantage MySpace had over FB. It is quite easy to walk away from FB.

So far FB has indeed done a very good job of drawing people in and keeping them, just as MySpace had in 2007. This can change very rapidly with only a couple of missteps though. They are never going to become the must-go default internet portal for everybody because any business that treats them that way will frankly lose too much business from people like me who won't deal with FB. Some are already noticing.
posted by localroger at 11:31 AM on May 18, 2012 [1 favorite]

That song wasn't good, but it was better than that awful Facebook song from this year's Eurovision.

Go feel bad about yourself San Marino.
posted by Bulgaroktonos at 11:32 AM on May 18, 2012

LOL

Please to explain what a law affecting property taxes has to do with corporate stock sales.
posted by psoas at 11:37 AM on May 18, 2012

Please to explain what a law affecting property taxes has to do with corporate stock sales.

Really? Ok, but, well, someone already did:

Given that California generally can't generate the political will to raise funds for anything using its broken proposition system, and probably isn't going to catch this in time to get the tax rates right on FB billionaires, I would say this isn't likely to patch the state's sucking head wound. I am really peevish about the real estate implications. I really wanted to move back to my home state.
posted by gusandrews at 10:34 AM on May 18 [1 favorite +] [!]

Thinking that an infusion of cash into the pocket books of a handful of people is going to solve California's financial woes is silly, considering California is basically prevented from generating revenue through taxation, specifically property tax.
posted by (Arsenio) Hall and (Warren) Oates at 11:44 AM on May 18, 2012 [1 favorite]

There is some irrational exuberance

WSJ: Next Stop: Dow 20,000. Columnist James Altucher provides 10 reasons why he expects to see Dow 20,000 over the next 12 to 18 months.

Same as it ever was. How terrified was Geraldo Rivera when Zuckerberg walked on to the floor in a hoodie, that's what I want to know.
posted by octobersurprise at 11:45 AM on May 18, 2012 [2 favorites]

Fun fact: as a result of the Facebook IPO, CEO Mark Zuckerberg will have a net worth greater than the combined bottom fifth of all U.S. households. That's 60 million people.
posted by Fnarf at 11:45 AM on May 18, 2012 [1 favorite]

Wow, a lot of (admittedly mild) LinkedIn hate. I find LinkedIn to be an invaluable tool for professional networking, and personally think it's pretty well done to achieve that purpose. I think they have a far better value-added proposition and monetization model than I can ever imagine Facebook having, despite the disparities in user base numbers.
posted by Brak at 11:47 AM on May 18, 2012 [2 favorites]

That's 60 million people.

I wonder what the actual number is, since a lot of those people are in debt and have negative net worth.
posted by smackfu at 11:53 AM on May 18, 2012

That is the history of California in a nutshell. It is consistent thematically that the state is also known for its seismic activity.

Earthquakes are our Etch-a-Sketch moments for real estate booms. Shake it up, then start over.
posted by LionIndex at 11:54 AM on May 18, 2012 [2 favorites]

WSJ: Next Stop: Dow 20,000 Could be worse. It could be 30,000.
posted by snofoam at 11:54 AM on May 18, 2012

Face what????
posted by HuronBob at 11:56 AM on May 18, 2012

I meant 36,000.
posted by snofoam at 11:56 AM on May 18, 2012

Just today I found out that to apply for a job at my company now, you can "connect" via LinkedIn or Facebook. When is OAuth having an IPO?
posted by mattbucher at 11:58 AM on May 18, 2012 [1 favorite]

WSJ: Next Stop: Dow 20,000. Columnist James Altucher provides 10 reasons why he expects to see Dow 20,000 over the next 12 to 18 months.

Coincidentally, Altucher was just on CNBC, advising the nouveau riche on how not to lose all their money, much like he did in 2000. And since that prediction was made in June 2011, a 20,000 DJIA must be just around the corner!
posted by malocchio at 11:58 AM on May 18, 2012

Facebook is an advertisers wet dream.

Ahead of Facebook I.P.O., a Skeptical Madison Ave.

What Everyone On Madison Avenue Is Saying About Facebook.
posted by ericb at 12:02 PM on May 18, 2012 [1 favorite]

Facebook is an advertisers wet dream. It's got a larger and more captive audience than pretty much any other medium today, and advertisers (both large and small) get to target their ads with an almost terrifying degree of precision.

Yes, but Facebook's users utterly ignore the ads. I mean, everyone ignores ads, but Facebook's users aren't there to FIND anything, unlike Google's users. They are there to clicky with their friends and whatever.

Clickthrough rates (from Wordstream, which admittedly advertises a lot on Google):
Average for all sites: 0.1%
Facebook: 0.051%
Google: 0.4%
posted by dammitjim at 12:04 PM on May 18, 2012 [4 favorites]

Ahead of Facebook I.P.O., a Skeptical Madison Ave.

Gee, who can have possibly have motivations to talk down a stock that is about to IPO?
posted by smackfu at 12:07 PM on May 18, 2012

I kept thinking about actually buying some of this stock, but every time I pulled up my brokerage's website, I suddenly got this mental image of walking up to the roulette table at the Monte Carlo in a rented tux two sizes too big, saying "EVERYTHING ON 39, MY GOOD MAN" and plunking down a single chip worth about forty cents.
posted by griphus at 12:18 PM on May 18, 2012 [6 favorites]

Honestly, I would sooner invest in Greek government debt.
posted by localroger at 12:19 PM on May 18, 2012

Fuck the Facebook IPO bubble -- is there any way to invest in the speculative-articles-about-the-Facebook-IPO-bubble bubble?
posted by griphus at 12:24 PM on May 18, 2012 [2 favorites]

Desperately clinging to 38 and change.
posted by Burhanistan at 12:36 PM on May 18, 2012

Hope you speculators already sold when it was up.
posted by Burhanistan at 12:36 PM on May 18, 2012

EVERYTHING ON 39, MY GOOD MAN

Considering that the numbers on a Roulette wheel only go up to 36, you may have actually found a worse investment than Facebook.
posted by localroger at 12:36 PM on May 18, 2012 [10 favorites]

Fuck the Facebook IPO bubble -- is there any way to invest in the speculative-articles-about-the-Facebook-IPO-bubble bubble?

There was, but a wandering Dutch sailor took a bite out of one and the whole thing went straight into the tank.
posted by jquinby at 12:39 PM on May 18, 2012 [1 favorite]

Man, they're playing some serious money games right now trying to keep that shit above IPO price.
posted by Burhanistan at 12:39 PM on May 18, 2012

Oh god it would be so great if it actually closed lower than the offering price. Seeing it dip below (seems likely at this point) is going to be good, but closing below 38 might actually cause me to skip home.
posted by dammitjim at 12:39 PM on May 18, 2012

I was just talking this over with a couple of friends, and I think actually that the main problem for Facebook is not going to be monetizing all those terabytes of user data, but making money out of them in a way that is not immediately, obviously horrifying.
posted by en forme de poire at 12:42 PM on May 18, 2012

I'm stuck watching CNBC all day, and just for kicks I transcribed the last segment:

"Facebook, facebook, facebook, facebook, facebook. FACEbook. FaceBOOK. Facebook? Facebook! Facebook, facebook, facebook.

I honestly, truly read your username as 'malkovich,' and just had one of the more surreal moments in recent memory.
posted by Mayor West at 12:46 PM on May 18, 2012 [1 favorite]

Highly unlikely that it will break below 38 today, the syndicate is doing everything possible to prevent it. The bid size at 38 looks nearly infinite on my screen.
posted by malocchio at 12:47 PM on May 18, 2012

(disclosure: I worked for LinkedIn for two years and designed a couple of their larger product offerings)

LinkedIn doesn't really offer much in the way of a consumer product. It is, however, the primary engine driving recruiting and hiring in North America, and is growing VERY rapidly in the world's stronger economies (BRIC). From a bottom-line perspective, it is one of the best businesses in the valley, and, imo, is hugely undervalued at its current market cap of $10B.

If you are an outbound professional (any kind of sales, most marketing positions, client services, etc), LinkedIn is probably your most valuable daily-use internet tool. A LinkedIn Recruiter seat license is ~$15k/year, and every company in the Fortune 500 happily pays for many more than a single recruiter license each year.

As a white collar worker, LinkedIn is currently the best way, aside from direct personal connections, to find a job in North America.

Aside from its indispensable utility as a rolodex-on-steroids, LinkedIn's advertising network is actually much better than Facebook's in terms of ROI. LinkedIn has ~150M users with an average income of >$100k. LinkedIn also has access to much better data (for advertising purposes) about its users than either Facebook or Google, because nearly all of the stuff you put into LinkedIn is very well structured. LinkedIn also has one of the best data science/math/stats engineering groups in the valley.

I spent a fair amount of time designing several aspects of the LinkedIn advertising system. I also worked on Google's advertising system for a while. I can tell you with great confidence that Google and Facebook would absolutely love to have the equivalent of LinkedIn's structured information about their users. With the LinkedIn advertising system, you can target very specific demographic groups. For instance, the aforementioned Silicon Valley realtors who want to sell $5M Palo Alto bungalows to the nouveau riche at Facebook can run targeted ads that are only displayed to senior engineers who work for Facebook and have had a tenure of 2 years or longer. That might be a list as small as 500 - 1000 people, but is probably the most qualified client list the realtor will ever glimpse. LinkedIn's cost-per-click (CPC) is much, much higher than Google's or Facebook's, but that's because those clicks convert to sales at a much higher percentage than they do on competing ad networks.

Facebook's potential as an advertising platform faces enormous challenges. As someone already pointed out, the CTR for ads on Facebook is abysmal when compared with its direct competitors. Yes, you are the product they're selling, but mining such enormous quantities of unstructured data and using it to produce useful targeting controls for advertisers is an incredibly difficult problem. Facebook's ad quality scores are terrible.

I'm pretty heavily biased against Facebook for a huge number of reasons unrelated to its business model, but I am especially skeptical that its user base and engagement numbers alone are enough to justify such an absurd valuation.
posted by drklahn at 12:50 PM on May 18, 2012 [30 favorites]

So . . . who's buying at $38? GS and JPM?
posted by (Arsenio) Hall and (Warren) Oates at 12:55 PM on May 18, 2012

Relevant.
posted by Burhanistan at 12:56 PM on May 18, 2012

I think Morgan Stanley was the lead on the syndicate.

Wow...watching this thing trade in the last 15 minutes was like playing Gemcraft...wave after wave of selling, but they were able to beat back the hordes. Barely.
posted by malocchio at 1:02 PM on May 18, 2012

With the LinkedIn advertising system, you can target very specific demographic groups. For instance, the aforementioned Silicon Valley realtors who want to sell $5M Palo Alto bungalows to the nouveau riche at Facebook can run targeted ads that are only displayed to senior engineers who work for Facebook and have had a tenure of 2 years or longer.

But Facebook has my mother-in-law and an army of Farmville players who would otherwise be cat hoarding. Advantage: Facebook.
posted by benzenedream at 1:03 PM on May 18, 2012 [2 favorites]

Once the dust settles and Zuckerberg & friends all have secured fabulous riches independent of FB, I think this thing will tank pretty hard.
posted by Burhanistan at 1:03 PM on May 18, 2012

Closed less than a half percent above the opening price. P/E ratio is in the high 80s. Lame.
posted by Potsy at 1:05 PM on May 18, 2012

Facebook IPO: More whimper than bang.
posted by ericb at 1:05 PM on May 18, 2012

Well I just got 10 shares at $42 earlier today, not that it'll make me rich in the next few years, but I'm currently holding Amazon, Apple, Netflix, and yes Zynga. I can't believe that I've rode Netflix all the way down from it's $300 high; I really regret that, but my investment strategy is mainly to buy it and hold until I need cash, at which point I'll sell the worst losers first.

I will definitely be picking up some LinkedIn in a few months after reading drklahn's comment.
posted by daHIFI at 1:07 PM on May 18, 2012

5 warning signs that time to invest in Facebook is over.
posted by ericb at 1:07 PM on May 18, 2012

I have nothing really to back it up, but the hype today made me start to ponder just how fast FB is going to fall... perhaps it won't in the near future, or perhaps this time next year FB will be the new Myspace.

Oh, and I've started feeding in all sorts of wildly inaccurate information on social sites. I was born in a tiny town in Chile and am living in Greenland, my high school was Marianas HS (slightly damp and a lot of pressure) over in the Philippines. I am also 96 years old. Next best thing to anonymity is lots of random garbage.
posted by edgeways at 1:09 PM on May 18, 2012 [3 favorites]

Nthing everyone else who expects that within 3-5 years, something will totally replace Facebook, and the world will go on.

I sincerely hope those cashing in on this all expect the same and act to insulate themselves appropriately. And yes--I, too, am irritated at this point by just how much of the media this has dominated.
posted by scaryblackdeath at 1:10 PM on May 18, 2012

Lack of trust in Facebook may hold back ad sales.
posted by ericb at 1:10 PM on May 18, 2012

Facebook IPO disappoints, to the delight of many.
posted by ericb at 1:12 PM on May 18, 2012

my high school was Marianas HS

GoooOOOOO TRENCHES!!!
posted by malocchio at 1:12 PM on May 18, 2012 [6 favorites]

>That's 60 million people.

I wonder what the actual number is, since a lot of those people are in debt and have negative net worth.

Well, to be fair, Zuck still hasn't paid off his student loans, and also owes whack of cash on his used Explorer picked up after graduation.
posted by KokuRyu at 1:13 PM on May 18, 2012

Despite underwhelming IPO, Facebook not giving up.
posted by griphus at 1:20 PM on May 18, 2012

I love LinkedIn. It's the main way for me to keep track of where ex-coworkers are working now and to know what's going on in the local tech community. You never know when you're going to be looking for a job and it's very handy to have everyone you've ever worked with on file.
posted by octothorpe at 1:21 PM on May 18, 2012 [1 favorite]

jcreigh: "Isn't a more normal P/E ratio like 20 or so? Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?"

"Growth". P/E assumes a steady revenue stream. Problem is they'd have to grow to become a major percentage of all advertising revenue worldwide.
posted by pwnguin at 1:23 PM on May 18, 2012

Gotta love how the front page of Yahoo has this headline:

Facebook Closes Near Flat for First Day, Was it Overhyped?

while they have FB ticker up on the top of the front page with Dow/Nasdaq/Gold etc

reminds me of that line from The Natural

And after today, whether you're a goat or a hero...you're gonna make me a great story.

If you are overwhelmed with media hype regarding Facebook you might want to reassess your media choices. Never place your trust in children chasing soccer balls.
posted by any major dude at 1:24 PM on May 18, 2012

LinkedIn has ~150M users with an average income of >$100k.

"Average" is very much the wrong statistic to use here. What's the median?
posted by escabeche at 1:32 PM on May 18, 2012 [6 favorites]

Facebook is an advertisers wet dream. It's got a larger and more captive audience than pretty much any other medium today, and advertisers (both large and small) get to target their ads with an almost terrifying degree of precision.

Right now Facebook is showing me "Meet your Psychic", "Want to Meet Singles", "Yearbook Archive" and an open house announcement for a university I don't recognize by it's initials, so I have to assume you're being sarcastic when you say precision. As such things go, I'd rank them halfway between the Rorschach test and a game where you see who can get from an arbitrary web site to porn in the fewest link clicks.

The terrifying part is that there are people who want to use this kind of technology for homeland security.
posted by Kid Charlemagne at 1:37 PM on May 18, 2012 [3 favorites]

There are also tons of broke-ass job seekers on LinkedIn.
posted by Burhanistan at 1:41 PM on May 18, 2012

Facebook IPO disappoints, to the delight of many.

It's like people don't even understand the point of an IPO. Did Facebook raise cash? Did all the outstanding shares get bought? Good IPO.
posted by smackfu at 1:58 PM on May 18, 2012 [1 favorite]

Comme ci, comme ça IPO
posted by Golden Eternity at 2:02 PM on May 18, 2012

I feel like I am supposed to finally start taking Facebook seriously, but I just can't. Is this how the last generation felt about the Netscape IPO? The whole thing just seems so frivolous.

Then again, anyone who was skeptical about the long-term value of Netscape as a company ended up on the right side of history, short-term bubble profits notwithstanding.
posted by Mars Saxman at 2:16 PM on May 18, 2012

I'm a totally boring ordinary person, and I don't even put any effort into my LinkedIn profile. Yet at least 3 or 4 recruiters have paid $10 just to send me an email.

If Facebook could make $30 from each user, they'd have $150 billion in pure profit. I haven't even logged into Facebook for like 6 months, but I actually don't think they're overvalued.
posted by miyabo at 2:50 PM on May 18, 2012

At mere gain of 23 cents a share, Facebook IPO fails to live up to hype.
posted by ericb at 2:55 PM on May 18, 2012

I've heard this song before, but I think the lyrics said 'Jesus' instead of 'Facebook'.
posted by ikalliom at 3:01 PM on May 18, 2012

If Facebook could make $30 from each user, they'd have $150 billion in pure profit. I haven't even logged into Facebook for like 6 months, but I actually don't think they're overvalued.

They currently make about 5.60 per user, they'd have to sextuple earnings to come close to that.
posted by T.D. Strange at 3:13 PM on May 18, 2012

LinkedIn has ~150M users with an average income of >$100k.

"Average" is very much the wrong statistic to use here. What's the median?

Apologies, you are correct that average is the wrong stat. When I worked for LinkedIn, the median income was >$100k. This obviously changes dramatically as the user base grows. LinkedIn's user growth over the last two years has been on the steep end of the hockey stick. The median income has likely come down during that two years.
posted by drklahn at 3:13 PM on May 18, 2012

Did anybody else read drklahn's LinkedIn spiel in the voice of Alec Baldwin telling the ol' Joes about the Glengarry leads?

Always
Be
Closing
posted by bukvich at 3:47 PM on May 18, 2012 [1 favorite]

I was watching this roll along today and when the first drop to 38 happened they blamed on some orders not being filled quickly enough. But then it dropped back down to 38ish, I was amazed how many order were popping up to buy at 38 - how much money does this syndicate have - how long are they going to support the 38 price point?
posted by Brent Parker at 3:54 PM on May 18, 2012

I sometimes think anything which is popular and/or commercially successful is fairly rapidly dismissed, disparaged and or barbequed by quite a few posters on the blue. I find FB extremely helpful in staying in touch with grandchildren, daughters and friends--we travel extensively and our friends are spread out in the States and Europe and generationally. Further, I am delighted for the people who help develop FB ( investors and employees) those who continue to work there and for the capitol it will put in circulation from those early investors and past/present employees. Some of the new wealth will be frittered away, some will be reinvested in new technologies and some in charitable foundations that will make a dfference. I personally think it is overvalued, that there will be a period of struggle and it is my bet that we will see tiers of service including a subscription service with no advertising and greater privacy. i would be more than glad to pay a small monthly or yearly fee for no ads and the convenience of seeing friends pictures and updates in one convenient location. Sure,most of the updates are ephemeral bit so is most of life. I also have friends who post fascinating links to substantial articles. But I do love the Blue and Green
posted by rmhsinc at 4:09 PM on May 18, 2012

Isn't a more normal P/E ratio like 20 or so? Why the hell do people have this much confidence in Facebook's ability to be more profitable in the future?

I don't think the market in general does. Facebook ended today at their opening price (which would support your theory) but...

Its pretty obvious that the underwriters propped up that price and wouldn't let it fall under the open price on its first day (IPO's are one of the few times they can artificially prop up a price). Give it a week and you might see their market cap closer to where you think it should be. (I think its in for a pretty steep dive personally).

Facebook's earnings this year look to be pretty damn close to last year's earnings and I think its going to start trading much closer to fundamentals. There's a lot of skepticism on its growth potential since its user numbers are only going up at about 3% a year and its not getting anywhere near the return for advertisers as something like AdWords. They're going to have to get very creative to keep growing at the rate indicated by their IPO price.
posted by bitdamaged at 5:01 PM on May 18, 2012

I still can't figure out what LinkedIn actually does.

It ensures that people who use it well remain employed and employable. It is a public reputation system. It is the only "social" network that I have ever paid money for - and it was worth every penny.

Once I realized the value of LinkedIn, I essentially stopped using FaceBook entirely - not just because I have no interest in endless invites to play games, but because it offers no compelling value to me whatsoever.
posted by jkaczor at 5:07 PM on May 18, 2012 [1 favorite]

As a white collar worker, LinkedIn is currently the best way, aside from direct personal connections, to find a job in North America.

LinkedIn is a joke, unless you're in larger metro area and (probably more than "or) also work in specific industries, such as the ones mentioned (tech, advertising, etc.). If you've worked for a university, say, you get sent the e-mails of every single person who works at or ever worked at that university, as if you'd know all 10,000 of them. It's worse if you've worked for any sort of national chain or multi-branch business. And it's job ad targeting is hilarious if you haven't worked in one specific field, or in a very narrow line of work. Think: Netflix suggestions for "movies like" whatever. (A la a Tyler Perry's Madea movie being similar to the French "Mesrine" true crime/action movies. I saw that one lately. Many LinkedIn job recommendations are just as ridiculous.)
posted by raysmj at 7:33 PM on May 18, 2012 [1 favorite]

At mere gain of 23 cents a share, Facebook IPO fails to live up to hype.

A well-priced IPO shouldn't skyrocket. To do so is a failure on the part of the issuer. If I sell you something for $38, what good does it do me if you turn around immediately and sell it for $50? That's a failure on my part to price it correctly.

But today was not lacking of drama. We expected the IPO to start trading at 11:00, but it was delayed for half an hour. Half an hour waiting for the shoe to drop...I don't think CNBC even went to commercial break during that time (oh noes...no ED advertisements!). Hundreds of people in front of the NASDAQ offices, thousands grouped in Menlo Park, all waiting in anticipation. Then trading finally begins, the stock bounces to $42.05. Cheers! Huzzah! But wait!

Did my order get filled? Execution reports were delayed for hours. Did I buy the stock? Can I sell it? What price did I get? What is going on?!?

In the meantime...the stock price drops. The syndicate of underwriters steps in to defend the stock at $38. The first wave of institutional sellers is fended off, and the price recovers. Execution reports are still being delayed...a lot of people are still unsure of where they bought or sold.

Finally, the kink in the execution reports is relieved. But toward the end of the day, selling resumes as the broader market tanks. Who wants to be long equities THIS weekend? $40...39...39.50. The general market is selling off exactly like it has for the past two weeks...quite a day to launch your IPO. Things are looking grim for FB as it keeps inching towards the IPO price. My quote looks something like:

B 38.01 A 38.02 250x100

(Bid price = $38.01; Ask price =$38.02; Bid volume=25,000 shares; Ask volume=10,000 shares - bid/ask volumes display in lots of 100)

Which means I can (easily) sell 25,000 shares at $38.01, or buy 10,000 shares at $38.02. But when the bid hits $38.00 around 3:45 pm, my quote reads:

B 38.00 A 38.01 99999x100

I have never seen a bid volume at this level...that's TEN MILLION shares I can dump, without changing the stock price. Unfathomable. And obviously, the volume is much deeper than that...the 99999 figure is basically a display error, my quote screen is maxed out at this level. (This is why I said earlier that the bid size looked infinite.) This is the price where the syndicate steps up and says "We will buy EVERY SHARE THAT WE CAN!!!"

This level holds for about 5 minutes. Watching the ticker screen (scrolling past just like the old time printouts) I see an incredibly fast moving river of red. EVERY order is a sell order, being bought (presumably) by the syndicate. Not a SINGLE flash of green. No natural buyers at all. But the bid size is stalwart. It will not budge.

99999.

Then...unthinkably...that 99999 becomes 98572 (or something). The ability of the syndicate to buy unlimited amounts of the stock is being tested. 80000...70000...60000. The sellers are SEVERELY stressing the syndicate's ability to absorb. How much do they have in capital reserves? It looks like they've committed over a billion dollars at this point. The time is now about 3:53...it's a race to see who cracks first. And once the syndicate cracks...well, there are few natural buyers to absorb the volume. I don't know how bad it gets, but it gets...bad.

But finally, with five minutes to go in the trading day, and as quickly as it began, the battle ends. The sellers finally relent. With the barbarians unable to breech the gates, the stock jumps thirty cents. The syndicate prevails, catastrophe has been averted. The battle? Nothing short of epic. A few small waves of sellers continues to crash against the gates, but the main army has been deflected.

The underwriters now own a substantial chunk of FB, and I'm sure they'll be looking to unwind. Monday should prove to be interesting, but it won't have all the thrills and spills of today...at least, I hope not.
posted by malocchio at 8:09 PM on May 18, 2012 [18 favorites]

To the tune of The Log Song

What saps your time, keeps you online,
Pulls you in for another look?
There are all those games that are so inane
It's Face- Facebook!

It's Facebook, Facebook, it's huge, it's enormous, it's big!
It's Facebook, Facebook, it's better than a pig in a wig!
Everyone's on Facebook! Come on and take a look!
Update your status on Facebook! Everyone hates Facebook!

Or something like that
posted by filthy light thief at 8:22 PM on May 18, 2012

Forget Facebook. Stocks are at serious risk.

The past 48 hours have shown a serious break down in the credit markets. It is similair to the days just before the 2010 flash crash. The bond markets are signaling red, capital flows moving out of junk bonds, corporate bonds and emerging market bonds at an unprecedented clip, into US treasuries. A flight to safety. Stock market down only a little since volume is low (due to consumers out of stocks anyway), not showing much there (yet). That could change next week. Facebook has been a huge distraction. No wonder it didn't get much of a pop today due to this undercurrent. Driven by Spain contagion and JPM contagion and Asian and US economic news all not good.
posted by stbalbach at 8:30 PM on May 18, 2012 [1 favorite]

When people are fearful, we look to buy; and when people are greedy, we look to sell (that is Warren Buffet supposedly but he was quoting somebody else).

If I was a trader I think I would be looking to buy. Anything but Facebook. That shit is crazy.
posted by bukvich at 8:57 PM on May 18, 2012

malocchio, thanks for that fascinating story and insight.

But didn't the syndicate sell those shares onto the open market at $38/share? Which means that by buying them back at $38, they don't lose anything, and can essentially prop up the price for free? That seems odd.
posted by jcreigh at 10:46 PM on May 18, 2012

A well-priced IPO shouldn't skyrocket. To do so is a failure on the part of the issuer.

But is it wrong to say by corollary that a well-priced IPO shouldn't require such heroic efforts of its syndicate to maintain the initial price point? I'm writing this less in response to you and more in response to the chatter I've seen elsewhere claiming that the small amount of overall movement indicates the IPO was priced perfectly. Doesn't that massive amount of syndicate purchasing pretty much mean by definition that the thing was overvalued?
posted by nobody at 5:15 AM on May 19, 2012

As I understand it, the underwriters put up the money Facebook "raised" in the IPO on the theory that they'd get it back selling the shares, leaving them with no Facebook stock of their own and a profit. Instead they are left with a wash and still holding however much FB stock they had to buy to hold up the price.

If the stock doesn't ever see north of $38 long enough for them to sell off those shares, the IPO is a net loss for the underwriters. I don't think that matters much to FB, since they have their $16B anyway, but it will set an ominous precedent for future IPO's.
posted by localroger at 8:09 AM on May 19, 2012

suckers!
posted by clavdivs at 8:38 AM on May 19, 2012

Your Favorite Old Social Networks: Where Are They Now?
posted by ericb at 9:06 AM on May 19, 2012 [1 favorite]

Facebook IPO postmortem "In other words: in order to make some $67 million for its Investment Banking unit, was MS forced to eat a several hundred million loss in its sales and trading division just to avoid looking like the world's worst underwriter ever? We won't know for a while, but in the meantime, here is a visual summary of the key events during yesterday's far less than historic IPO."
posted by T.D. Strange at 10:10 AM on May 19, 2012 [1 favorite]

From T.D. Strange's link:

The next chart (5 millisecond interval) shows the result of the blast in trades and quotes when Nasdaq's quote returned. Trades printed at least 900 milliseconds before quotes, an impossibility if orders are being routed according to regulations. We have jokingly referred to this anomaly as fantaseconds.

Wow. Just wow.
posted by localroger at 11:05 AM on May 19, 2012

T.D. Strange's link is fascinating but almost completely beyond my comprehension. Could someone knowledgeable chime in here: is the intimation -- both w/r/t trades coming in 900ms before quotes, and (in chart 15) quotes from NASDAQ going dark each time the prices rose above the $38 floor -- that there was outright fraud going on? (If so, perpetrated by and against whom?)
posted by nobody at 11:34 AM on May 19, 2012

nobody, the anomalies suggest at best that the system is not up to regulatory standards. It means the potential for fraud exists, but we can't tell for sure whether there was deliberate fraud (such as shutting down quotes deliberately to keep the price from plunging rather than the mechanism just getting overwhelmed) because, well, the system didn't perform as it should.
posted by localroger at 11:38 AM on May 19, 2012 [1 favorite]

But didn't the syndicate sell those shares onto the open market at $38/share? Which means that by buying them back at $38, they don't lose anything, and can essentially prop up the price for free? That seems odd.

localroger has it right. The underwriters (the syndicate) bought the shares from Facebook at $38, then turned around and sold them to investors at the offering price, leaving them flat shares and capital. (They get paid a flat fee for doing this.) When they bought them back at $38, they had to use their own capital (again) to take a long position.

I was probably wrong to say that there were no natural buyers at $38, I'm sure there were some, but not enough to stabilize that price. I'm going to guess that if the syndicate is a buyer at $38, then they are a seller at $38.01, and of course they are going to be selling to the natural buyers at that price. I think this explains some of the wild fluctuations (between about 38.05 and 38.30) in the final minutes of trading.

But is it wrong to say by corollary that a well-priced IPO shouldn't require such heroic efforts of its syndicate to maintain the initial price point? I'm writing this less in response to you and more in response to the chatter I've seen elsewhere claiming that the small amount of overall movement indicates the IPO was priced perfectly. Doesn't that massive amount of syndicate purchasing pretty much mean by definition that the thing was overvalued?

Absolutely. I think this is going to be a textbook case to study when valuing IPOs. There is certainly a case for leaving some money on the table, so the underwriters have a little breathing room. Also, even though FB as a company got paid at $38 and doesn't care too much about the shares in the aftermarket, they want to maintain a solid price for future offerings or to use as collateral, and of course Zuckerburg and crew are still holding massive amounts of shares. I'm sure they would have loved to have seen the price take off.
posted by malocchio at 2:09 PM on May 19, 2012

localroger has it right. The underwriters (the syndicate) bought the shares from Facebook at $38, then turned around and sold them to investors at the offering price, leaving them flat shares and capital. (They get paid a flat fee for doing this.) When they bought them back at $38, they had to use their own capital (again) to take a long position.

Ah, okay, that makes sense. Thanks to both of you for the explanation.

So why did the underwriters prop up the price at all? Why didn't they just take their fee and walk? Are they afraid that if the stock price drops below the IPO price, then nobody will ever trust them to underwrite an IPO again?
posted by jcreigh at 2:28 PM on May 19, 2012 [1 favorite]

Are they afraid that if the stock price drops below the IPO price, then nobody will ever trust them to underwrite an IPO again?

Yep.
posted by ericb at 3:43 PM on May 19, 2012

Who's the Fool in the Facebook IPO? It May Be You -- "Bankers' fees for the flotation total about $100m. Is Facebook being conned – or is it ultimately someone closer to home?"
posted by ericb at 3:45 PM on May 19, 2012

I'm not an IPO guy, so I'm asking some of the same questions myself. Underwriters aren't necessarily obligated to defend the offering price, but maybe they had an agreement with FB to do so? Or yeah, maybe they were just trying to save face at any cost. This was a huge, prestigious IPO, and there's a lot at stake for Morgan Stanley.

That ZeroHedge article is really interesting, honestly it's really hard to tell what was going on with some of those quotes and trades. I imagine the SEC will launch an investigation, but it will be difficult to unravel everything and determine if there was fraud, and who might have perpetrated it. I'm not sure we ever determined the underlying cause of the 2010 flash crash, and Friday's action will probably be just as difficult to decipher.
posted by malocchio at 4:00 PM on May 19, 2012

Related: Mark Zuckerberg got married yesterday.

I know Facebook gets slagged on for a lot of reasons, but I've always liked Zuckerberg and looked up to him in a lot of ways, and it's really nice that he seems to still be passionate as hell about his work, without sacrificing his personal life. His wife also just got her MD, so geez, busy week for the Zuckerbergs.
posted by Rory Marinich at 4:05 AM on May 20, 2012 [1 favorite]

FB now at $33.00

The syndicate could not hold. Repeat. There is a breach in the syndicate. It could not hold.
posted by (Arsenio) Hall and (Warren) Oates at 6:47 AM on May 21, 2012

I don't get it. Don't we know all those people selling bought at $38+? Why do they feel the need to sell at $33 three days later? That's a pretty terrible IRR.
posted by smackfu at 7:11 AM on May 21, 2012

Some people with pre-IPO shares are selling. Also, there is probably alotta shortin' goin' on.
posted by (Arsenio) Hall and (Warren) Oates at 7:13 AM on May 21, 2012

Could be FB employees turning paper into liquid.
posted by Burhanistan at 7:13 AM on May 21, 2012

I doubt it's FB employees, as the lock-up period is three months. Probably shareholders who bought on the private market.
posted by (Arsenio) Hall and (Warren) Oates at 7:15 AM on May 21, 2012

Why do they feel the need to sell at $33 three days later?

Because they're scared of having to sell at $25 two weeks later?
posted by escabeche at 7:16 AM on May 21, 2012 [1 favorite]

Could be the underwriters themselves cashing out the face-saving shares they had to buy Friday to attempt to minimize losses.
posted by T.D. Strange at 7:59 AM on May 21, 2012

Facebook Loses Face - And How

"The poor performance of the Facebook deal demonstrates a couple things. Be wary of leaked word from underwriters before pricing that IPOs are hugely oversubscribed. Most institutional investors are greedy and want hot deals not because they love the companies but because they want to make money. If the deals fizzle, they head quickly for the exits to limit their losses.

It appears that the underwriters were overly aggressive in pricing the Facebook deal. Not only was the deal size increased to 421 million shares from 337 million shares, a 25% increase, but the price was set at $38, above the original range of $28 to $35. The underwriters bought into the hype and investors paid the price. Winners include Facebook, CEO Mark Zuckerberg and other selling shareholders who netted $38 a share for their holdings sold in the IPO."

posted by ericb at 8:37 AM on May 21, 2012

7 Reasons Why Facebook IPO Was A Bust.
posted by ericb at 8:39 AM on May 21, 2012

New York Post Has One Word For New Facebook Investors: ZUCKERS!
posted by ericb at 8:49 AM on May 21, 2012

I don't get it. Don't we know all those people selling bought at $38+? Why do they feel the need to sell at $33 three days later? That's a pretty terrible IRR.

Some of it is the underwriters cutting their losses, some of it is institutional investors being surprised. Typically IPOs are oversubscribed. You put in a buy offer for X shares and you get a percentage of that, maybe half. Which means next time you put in a bit for 2X to get your desired X shares. I heard on the radio that perhaps institutional investors got a bigger percentage of their request than anticipated. Assuming your goal is to buy into an IPO for the "pop" this is very bad news; part of the pop is due to oversubscription and getting your whole request means there were at least enough shares to go around.

I'm a little curious how the IPO compares to the trading on the old shadow market, but I don't really follow "the market".
posted by pwnguin at 10:38 AM on May 21, 2012

After Facebook IPO debacle, it's blame-game time -- "'There must have been some sober second thoughts about this,' says one analyst."
posted by ericb at 1:53 PM on May 21, 2012

The Facebook IPO was a dud--here are 3 reasons it matters.
posted by ericb at 2:41 PM on May 21, 2012

Inside Job: Facebook I.P.O. Shows System Is Broken.
posted by ericb at 6:59 AM on May 22, 2012

How low can it go?
posted by (Arsenio) Hall and (Warren) Oates at 7:00 AM on May 22, 2012

Facebook IPO: Banks Investigated For Allegedly Keeping Negative News Secret -- "Morgan Stanley, JP Morgan and Goldman Sachs are said to have shared with big investors while keeping public in the dark."
posted by ericb at 2:42 PM on May 22, 2012

5 signs Facebook hates its shareholders -- "The social networking giant's public debut has been rocky -- and not just because of technical glitches and a plummeting price."
posted by ericb at 2:54 PM on May 22, 2012

Zuckerberg, Morgan Stanley sued over Facebook IPO.
posted by ericb at 8:21 AM on May 23, 2012

MIT Technology Review: The Facebook Fallacy -- "For all its valuation, the social network is just another ad-supported site. Without an earth-changing idea, it will collapse and take down the Web."
posted by ericb at 9:29 AM on May 23, 2012

The Inside Story Of What Happened On The Facebook IPO.
posted by ericb at 10:38 AM on May 23, 2012

It seems rather inevitable that if you have a pattern of:

1) Tech IPOs tend to have a bump because they are underpriced.
2) Demand for tech IPO shares is so high that they are severely oversubscribed.

... eventually one that is priced correctly (or overpriced) will have a double whammy of not having a bump, and ending up with people owning more than the expected.

And it really seems like this is just people putting far more faith into the underwriters than they deserved. "I'll buy as many shares you can get me for whatever price you decide to sell it at." How crazy is that? And if they tend to always price things wrong, why is it so shocking when they price them wrong the opposite way?
posted by smackfu at 11:37 AM on May 23, 2012

Wall St. ruins Facebook -- "The social network's debacle of a public offering exposes, once again, the rotten heart of finance."
posted by ericb at 12:04 PM on May 23, 2012

Facebook Forecast Scandal's Big Question: Insider Trading?
posted by ericb at 12:05 PM on May 23, 2012

Senate Banking Committee Reviewing Facebook IPO.
posted by ericb at 12:11 PM on May 23, 2012

Facebook's Dream IPO Starting To Look Like A Nightmare
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posted by ericb at 1:10 PM on May 23, 2012

As critics lay siege to Facebook, Zuckerberg is MIA.
posted by ericb at 1:10 PM on May 23, 2012

Hey, he's just on his honeymoon!

Did anyone else notice the full complement of big security dudes escorting Zuckerberg to his SUV?
posted by Burhanistan at 1:12 PM on May 23, 2012

Facebook's banks reportedly make $100M 'stabilizing' stock -- "Bloomberg reports that Morgan Stanley and the other underwriters made a bundle trading the stock to keep it from sinking."
posted by ericb at 2:28 PM on May 23, 2012

Wall Street Made A Fortune Off The Facebook IPO -- "The Facebook IPO increasingly looks like it will cement the notion that the stock market is a rigged casino in the minds of Main Street investors."
posted by ericb at 2:35 PM on May 23, 2012

Wait, how the hell did Morgan Stanley come out ahead on this? If I understand correctly, they bought a ton of shares at $38, and the price hasn't been north of $38 since then, so how did they profit?

I guess the house always wins.
posted by jcreigh at 12:10 PM on May 24, 2012

...I may be living in hope, but I wonder if this very visible incident is what may finally at long last wake up a number of people about how "hey, the big banks seem to be gaming the system and maybe there's something wrong with that."
posted by EmpressCallipygos at 1:32 PM on May 24, 2012

Morgan Stanley may refund some Facebook investors.
posted by ericb at 2:50 PM on May 24, 2012

What Ignited the Facebook-Analyst Fallout?
posted by ericb at 2:52 PM on May 24, 2012

Facebook fiasco may close tech IPO door.
posted by ericb at 2:55 PM on May 24, 2012

Facebook Weighs Possible Listing With NYSE.
posted by ericb at 2:58 PM on May 24, 2012

I wonder if this very visible incident is what may make even more people think "hey, the big banks seem to be gaming the system and maybe I can get me some of that."
posted by flabdablet at 5:21 PM on May 24, 2012

hey, the big banks seem to be gaming the system and maybe I can get me some of that.

Welcome to the casino, son. Let me show you how this Roulette thing works. Of course you can beat it if you're smart enough -- you do look smart to me, you are smart, aren't you?
posted by localroger at 5:36 PM on May 24, 2012

So, every time FB drops another cent I should double my holding?
posted by flabdablet at 10:52 PM on May 24, 2012

It seems to have stabilized at 32.
posted by smackfu at 7:02 AM on May 25, 2012

Is Mark Zuckerberg Up to the Job? -- "The Facebook CEO botched his company's IPO badly. Newsweek's Dan Lyons on the business challenges ahead—and why the kid genius may not be up for the task."
posted by ericb at 11:25 AM on May 27, 2012

I'm pretty sick of this soap opera by now. On one hand you have FB not leaving any money on the table and being a great company for getting all the money it could. On the other hand you have FB now being seen as a terrible company for not supplying growth in the stock price. Both sides are equally fervently argued, and nobody apparently notices the schism that legitimizes both. I'm not sure how the demographics of the opposing sides plays out, though.
posted by rhizome at 12:31 PM on May 27, 2012

The Social Media Bubble has popped.
posted by ericb at 1:25 PM on June 3, 2012

Yeah, maybe. But Ballmer is gonna have a crack at it anyway.
posted by flabdablet at 8:13 AM on June 4, 2012

Nasdaq plans $40 million Facebook IPO fix.
posted by ericb at 1:19 PM on June 6, 2012

SEC questioned Facebook about Zynga, mobile before IPO

New documents show that federal regulators wanted to know more about Facebook's mobile users and the company's relationship with Zynga before Facebook's initial public offering of stock.

posted by ericb at 9:47 AM on June 15, 2012