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Weakish demand for the Facebook (FB) IPO isn't a surprise for Minyanville's Conor Sen, who says...

Weakish demand for the Facebook (FB) IPO isn't a surprise for Minyanville's Conor Sen, who says the public markets are doing a great job sifting through new share offerings. The revenue growth isn't there, he tweets. If Facebook grows revenues at 20-25% in 2012, give it an 8X sales multiple and call it generous ... that's $40B.
Comments (18)
  • :))) This is going to be epic.

     

    Can't wait..
    10 May 2012, 08:51 PM Reply Like
  • It looks like they might have waited 6 months too long, the second market hype is starting to wear off.
    10 May 2012, 08:54 PM Reply Like
  • Just about every social media company waited 6 months too long or went 6 years too early. ZNGA, GRPN, and now FB were too late while ANGI and YELP were too early.

     

    Why give it 8x sales with that limited growth?
    10 May 2012, 10:06 PM Reply Like
  • They're too late to the game. I mean, they already have a billion users, you can't really expect too much more user growth. And users are fickle bunches, no one can expect that they'll be able to dramatically increase per user revenue without causing a backlash over too much advertising or privacy abuse.

     

    Simply, i don't see how it will live up to the hype it's gotten, nor can i see how the valuation will stand up when its publicly traded as opposed to small lots of shares exchanging hands on Second Market.com.

     

    Add to that a CEO with complete control of the company who's already demonstrated lack of fiscal restraint in making a billion dollar purchase, it just doesn't seem like anything a rational person might want to be involved in. But then, I won't touch Amazon with a ten foot pole, and so far that's been the wrong attitude to have taken...
    10 May 2012, 09:01 PM Reply Like
  • Great points. The big problem with all these social media firms is that they grab users without the ads and then they expect to 'monetize' those users at some point. After years of using the service, people just aren't going to appreciate adds. You can't give something away and then change the model. Its time to get away from the users metrics and focus on the RPU. Appears that just about anybody can create a free service that users will latch onto, but the key is creating one that they'll pay to use such as umm AAPL.

     

    The other issue is that FB is losing traffic to Twitter and Pinterest amongst others. Heck I spend 10x more time on Twitter now and have noticed a big decrease in postings in my news feed.

     

    My kids aren't interested in playing FB games anymore either. They much prefer the games on the iPhone and after playing so much in the car while traveling, I typically push them outside instead of onto the computer.

     

    Twitter is where you go to interact with people of interest, where as Facebook is where you interact with people from the past that you mostly don't care about anymore.

     

    The FB model looks to be in serious trouble to me.
    10 May 2012, 10:19 PM Reply Like
  • What you gotta remember about amazon is: they sell real products. and lots of them.

     

    For example, in the past month I have:
    1. bought a book on my Kindle
    2. rented a movie through my amazon PS3 app
    3. as a prime member, I do most of my online shopping through amazon if possible because of the free two-day shipping

     

    Facebook, on the other hand: I use adblock and don't even see any of the ads. Also, I am extremely creeped out by facebook's attempts to get me to post more things (which they can sell), so I removed basically everything but my picture and name from my facebook account.

     

    I feel like one of those companies is close to hitting its growth limit, while the other is just getting started with great new ideas to make money.
    11 May 2012, 01:30 AM Reply Like
  • This IPO is not worth it - the money has already been made. Better to invest in something small with prospect.
    10 May 2012, 09:02 PM Reply Like
  • Small bio-techs. Let's sniff 'em out!!
    10 May 2012, 10:00 PM Reply Like
  • Like Twitter, Long via SVVC.
    10 May 2012, 09:18 PM Reply Like
  • Can't wait to see if this one flops. I doubt it though.
    10 May 2012, 09:32 PM Reply Like
  • I have talked about rough fundamentals for some time now. If it was not for an arcane SEC rule Facebook would not be going public.

     

    It is a rich price but If search pays off it will do well.
    10 May 2012, 09:56 PM Reply Like
  • Don't understand why anybody would go to FB to use search especially when your using Twitter. lol
    10 May 2012, 10:20 PM Reply Like
  • Zuck wants Facebook to be your portal to the web. By having a very good search client it keeps you on the site instead of going to Google. That also allows them to better target advertising towards users.
    10 May 2012, 10:48 PM Reply Like
  • All the media bashing directed at Facebook reminds me of the Google IPO.
    10 May 2012, 11:16 PM Reply Like
  • Netscape all over again!
    11 May 2012, 12:01 AM Reply Like
  • I just read its already oversubscribed....how is that weak demand?
    11 May 2012, 12:09 AM Reply Like
  • I saw that article and was wondering the same thing
    11 May 2012, 09:04 AM Reply Like
  • A lot of people want FB to blow up.. I get it. I personally don't care either way but, it's going to be a blockbuster.
    11 May 2012, 02:08 AM Reply Like
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