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Jeff is Chief Executive Officer and Managing Partner of KCSA Strategic Communications. Jeff brings more than a decade of integrated investor relations, public relations and marketing experience to help clients grow their businesses. Most notably, Jeff has developed financial communications... More
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KCSA Strategic Communications
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My book:
Investor Relations: The Art of Communicating Value
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  • Diary Of An IPO: The Setup . . .

    The scenario unfolding with Facebook could not be more predictable (actually deja vu of the Internet bubble of 2000). As reported in the Wall Street Journal today, there is a frenzy going on to get in on the IPO. Demand has far surpassed supply, so what's a banker to do - raise the stock price range, I mean the valuation of the company? This is a basic economic principle… right?

    But at whose expense are they jacking up the price? It's at the expense of the little guy who doesn't understand the correlation between stock price and valuation. It's at the expense of people like my grandparents who are in an investment club in Sarasota, Florida. People who don't fully understand the correlation between stock price and valuation are getting taken.

    Other than this frenzy, what has changed during the past two weeks that would possibly justify an increase in the value of Facebook by billions of dollars? Absolutely nothing. In fact, there has been an acknowledgment that the company's growth strategy, especially with respect to the all important mobile element, is not sound.

    Here's my prediction: Facebook will crash and burn unless the company can better communicate where it is going with its business. And who will suffer as a result? The little guy who doesn't understand the correlation between stock price and valuation. The person who is caught up in the moment of the frenzy and who purchases Facebook stock at what will probably be a high ($34 - $38).

    Just wait until the company reports its first earnings as a public company - then you will see what I am talking about. Groupon is not an aberration.

    May 15 11:30 AM | Link | Comment!
  • Diary Of An IPO: S-1 Craziness

    I just read that Facebook may raise the price range of its IPO and, if it does, will be filing yet another S-1 in the coming days. I have been blogging about the baselessness of the proposed valuation of Facebook since prior to the roadshow commencing. To sum up almost 10 blogs ( - I believe this might just be one of the most egregious investor abuses and/or insanity in the past several decades.

    Why? Facebook, in its initial S-1, amended S-1 and amended, amended S-1 filed this week in no way justifies its nearly $100 billion valuation. And, now it's being reported that it might increase its valuation by 20% and, as a result, will have to file yet another S-1???

    The craziness is that nothing in the S-1 has changed in regards to the company's business or growth plan/strategies. Indeed, one of the significant changes in the most recent S-1 is that its mobile strategy is problematic and that the company may struggle to monetize any such mobile strategy and achieve profitability.

    Bottom line, a near $100 billion valuation based on this is a far reach - a near $120 billion valuation is absurd. Investors beware. Stay tuned . . .

    May 11 6:04 PM | Link | Comment!
  • Diary Of An IPO: How Do I Get A Golden Ticket (Is It Even Gold)?

    So many of those who attended - I mean those who were invited to - yesterday's Boston investor meeting for Facebook, were probably served a delicious rubber chicken. And no less important, they were likely exposed to the company's mobile strategy and business plan. The Wall Street Journal reported today that Michael Mullaney the Chief Investment Officer at Fiduciary Trust Company said he left the luncheon feeling that the company has a "definite plan" and that he felt "more comfortable with its story" than he was before.

    Lucky Mr. Mullaney! But what about me and the thousands of other interested individuals who only have access to the company's S-1? What about those who did not (and probably will not) have an opportunity to hear the Facebook story and have their questions answered by COO Sandberg and CFO Ebersman (it's worth pointing out that CEO Mark wasn't there - if he is going to continue acting like a college kid we might as well be on a first name basis)?

    My point is that this flies directly in the face of SEC Reg FD. Given the lack of explanation about where Facebook is going in the S-1, the investor playing field is not level. And something needs to be done about this.

    Here's a solution: give me an invitation to all the upcoming investor luncheons. I will attend each of them at my own cost and will blog about what is said so that everyone can have access to the same information as those attending the roadshow meetings. Complete transparency - are they ready for that?

    And, if cost is an issue, the party planners don't have to worry about feeding me a rubber chicken, since I'm a vegetarian.

    May 10 3:16 PM | Link | Comment!
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