New Scaratings

Bigger flop????????



Now that Facebook and how miserable they did on the opening day of the IPO today what will be a bigger disappointment Facebook or NTN in a year?



I think that within a year NTN will be worth more as far as the opening high versus low as for as the cost of buying a share of stock for what the IPO started out.



Today with the Facebook the backers of Facebook have $2 billion in funds to keep the stock price up above the $38 IPO. After the opening it came back down in value to the $38 at least 75 times. The backers then bought more shares at a higher cost to keep it above that $38 level.

The backers can keep this up for some time. Plus with a couple more times more stock will be release it will water down the want to own Facebook and the cost will go down for a share. The value of facebook is just on advertising that is brought in. Each person that is on Facebook is worth a little over $5.00. Each person should be worth about $100 for the value that the stock IPO came out today. Plus it is also a worry that most of the share holders announced before the stock went on the market today were selling off the majority stocks they had. This is unheard of. All of the times a IPO came out the current owners want to get more shares not sell off the first day as the value of the stock shot up and then sold some as the price might of come down after awhile.



So I am thinking that a share of Facebook will be down around the $!.50 to $3.25 in a year which is a far bigger lost than what NTN ever did in value.

So I say it is foolish to buy Facebook till some better business model come out.

It's too late to get back to you on this tonight, but I will have some thoughts to share with you.

p.s. I probably learned a thing or two after 32 years in the brokerage business. I've got a lot going on in my life right now, but I will do my best to get back to this thread, as soon as I have time.

p.p.s. At this point I am not so sure that your price predictions are right, but I have a feeling that you are correct about the stock being overvalued on the IPO.

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"The game is afoot."

You are right, the backers (underwriting syndicate) will normally support an IPO that they bring to market for about a month. I would be concerned what Facebook shares will do once that support is gone. Institutions as well as big individual investors gobbled the shares up on the IPO in expectation, that those who were unable to get in on the initial offering would be driving the price up once it started trading. So far this does not seem to be what is happening. Right now it does not appear that those, who picked up the shares on the offering, are going to be able to flip the stock for a quick profit, or to move Sell-Stop orders up as the price goes higher. One has to be concerned about a stock, where there is no fundamental reason to own or buy it. (Because "it's going up" is not a fundamental reason.) When it stops going up, LOOK OUT...! Those who own the stock will start to ask themselves, "Why do I own this thing? It has no track record. It pays no dividend, and probably won't until after I'm dead, if ever. The price to earnings ratio (if the company even has any earnings) is insanely high, and it's NOT GOING UP!

The next thoughts are, "It's not appreciating as I had expected. Maybe I made a mistake. I probably should get out of this thing, before everyone else starts selling it." When the emotion of fear overrides the emotion of greed, look out on the downside. Panic spreads very fast, and it's a long way down, if an IPO was overpriced. The decline often is often very steep and rapid, and does not provide people with an easy way out.

I would suggest to anyone, who owns Facebook or is considering buying it, be very careful and consider it a speculation, where you can afford to lose money.

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"The game is afoot."

What kind of fundamentals did Google have when it went public in 2004?

I wouldn't touch Facebook at present, but I'd bet a lot of doughnuts that it way outperforms the overall market over the next five years.

BO

I love Google. I use it every day. It costs me nothing, and I totally ignore the commercials that I have to tolerate while I'm using it.

However, that isn't the question here. Google pays NO dividend to it's shareholders, and is selling at a price that is approximately 20 times what they earn per share. Why would someone buy this stock...? The only possible answer is that "it's going up." Yeah, it probably will keep going up. However, with a stock that pays no dividend the only way you will make a penny out of your investment is to SELL it for more than you paid for it. However, how can anyone ever sell it as long as it's going up? (If by luck a company gets bought out by another company for cash, the shareholders might be forced to take a profit against their will.)

"I wouldn't touch Facebook at present, but I'd bet a lot of doughnuts that it way outperforms the overall market over the next five years." (Quoting Bo.)

BO, I ain't taking that bet, but you don't need me to place it. It's real easy, there are a gazillion brokerage firms out there that will be more than happy to sell you as many shares of Facebook as you want to buy.

You might take a second mortgage out on your house, place your bet on Facebook, and win so much money that you would never have to work again, but there is another possibility that isn't quite so good. My post that you are responding to was to warn people that there are risks to investing in IPO's, not that people couldn't make money speculating.

p.s. I'm not going to waste my time doing it, but if someone with nothing better to do, wants to look into it, check out all of the IPO's that came to the market during the "Dot-Com" frenzy, and how many of them worked out.

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"The game is afoot."

You totally missed my point and ignored my question to boot.

What kind of fundamentals did Google have when it went public in 2004? Everybody knows what the fundamentals are now. The reason I ask is because I'd think that Google was in a similar position then that Facebook is now. And Google is now trading at 7.5 times it's IPO and has been even higher. But yes, initially Google had to find it's legs when it went public.

Was Google profitable when it went public? Facebook has almost a billion users and that figure isn't going to drop off the map any time soon. Same as Google had a boatload of users that weren't going away any time soon.

I just think Facebook is in a very similar position in many regards at present than Google was in back in 2004. Most importantly, the volume of users is key.

BO

Okay, please tell me when I should buy it, and if I live long enough, when I should sell it. Heck, I'll give you a reasonable percentage of my profits, as long as you are willing to repay me anything I lose.

p.s. I have never heard of any stock analyst talking about a current price to IPO ratio before. Please explain to me what this means, and how people can use this new measurement to figure out what to invest in.



................... Goodnight, I'm going to bed.

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"The game is afoot."

The funny thing is I pretty much predicted this on facebook at six in the morning that it was going to open the IPO>

Harry Spangler Jr.

I am hoping that when the LITTLE people like us are able to buy Facebook. That you do not. It does not have the earnings that it should. Plus some of the real founders are planning to sell the bulk of the stock they own themselve. It ist was sound stock that the founding partners would not consider doing that.
Like · · Friday at 6:38am near Phoenix ·
Junie Bug, Kelley Leigh Spangler and Jess Commenator like this..

Jess Commenator When the little people are able to buy it it will be way too expensive.
Friday at 7:19am via mobile · Unlike · 1.

Jimmy Gannon Good to see you up and about and shaking things up.
Friday at 7:20am via mobile · Unlike · 1.

Harry Spangler Jr. Well the way it went today when it finished out I think the true value is $24. I think it will go even lower in over a year. I say this because the first month the main investors will prop up Facebook stack at the $38.00. The did it today about 75 times. If you want to for those that know Buzztime NTN would be a better buy.

Bo I understood what you are saying- asking but buy stock then VS now has changed. People back then were hoping and more greedy and they did have the .com bust but the fundumentals and economy was way diffrent then. People and the big investors are taking a diffrent aproach that some product or income needs to be showing at the present time of purchase. Facebook does not have that income that they need nor are they saying how that extra income will occure down the road.

I guess really then could be thought almost like a pyramid scam.

A friend of mine bought Facebook when it started trading. I have advised this friend to put a stop order to sell the shares, if it drops to a price where they can't afford to lose any more money. Exactly what price that stop order to sell should be put is very difficult determine, because there is NO trading history on this stock. Trying to guess when it may have violated support is virtually impossible to determine at this time. I suggested that the friend place the stop order low enough that it would be unlikely to be triggered by intra-day fluctuations in the stock, because, who knows, it might drop during the day's trading, but turn around and go back up. You want to avoid putting a stop too close to the trading price of a stock, where this is likely to happen.

If you think that $31.00 is where you want to bailout, put your stop order to sell at $31.05. Why...? The answer is that most people will put their stops on dollar amounts that don't involve nickels and dimes, and you want your trade to go off (in this example) before the stock drops to $31.00, and get caught up in a lot of sell pressure that drives the price farther down than the price that triggered the sale. (A stop order does not guarantee the price where you placed your stop. It only guarantees you a market order to sell after the stock trades at or BELOW your stop, at whatever the price might be.)

In the old days people couldn't place stop orders on OTC stocks. However, as l was leaving the business, I believe that people were able to place stop orders under some non-listed NASDAQ stocks. Non-listed means (or at least used to mean) that the stocks do not trade on the NYSE or the AMEX, which merged in 2008.

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"The game is afoot."

I'm concerned about Facebook...

It closed today at $34.03 down $4.20‎ (-10.99%‎). This does not bode well for the stock. I may be wrong, but if I had clients in Facebook, I would be telling them to sell at the market opening tomorrow, and I wouldn't be screwing around with the stop orders, that I talked about in a previous post. Yeah, they might miss a miraculous rebound, but I would be more concerned that they would be caught in a precipitous decline in the stock.

If you own this stock, call your investment adviser, and ask him/her what to do. Don't listen to me, I'm just an old guy, who used think he knew something, before being put out to pasture.

If this chart is right, I don't like what I see, and what worries me more is that very few others will like what they see either.

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"The game is afoot."

WTF? It's been trading two whole days and you're worried about the stock? Give me a break. I'd think somebody your age wouldn't buy into all this "the sky is falling" blabber based on two days of trading.

Yes, FB will be very volatile in the near future, both up and down. On days it goes up I'm not going to start screaming from the hilltops that it's on it's way to 1000.

BO

Mark Zuckerberg got married this weekend and was worth over $19 billion when married. Today as in Monday he had to go home and tell his new wife he is worth $2 billion less and he is only worth $17 billion. Wonder how that is going to go.

I don't think it makes a lot of sense to apply logic to the Facebook stock, at least in the short term.

One of the best ways to determine if a stock is over or under priced is to look at it's price to earnings ratio. (Yes, I know that in certain situations there are exceptions to this, and stocks in different sectors command different P/E ratios.)

However, I learned today that the Facebook IPO was priced at approximately 100 times their last year's stated earnings, and that even at the current depressed price its P/E ratio is still a lofty 85 times earnings. When you compare this to the NASDAQ Composite Index of Technology Stocks trading at 15.7 times earnings, and that Apple is at a P/E multiple of 13.6 and Google's P/E ratio is only 18.2, you really have to wonder if Facebook's prospects are all that rosy to justify paying the price that it is still trading at. Unless there is some wonderful surprise in store, I say get out of it NOW!

It won't be long before those, who are stuck with the shares, start looking at Facebook as a tax write-off to take, and decide to cut their losses. I don't think Facebook will be able to make any kind of significant recovery until they show investors some real earnings improvement or other fundamental reason to buy the stock, now that the excitement and over optimism seem to have vanished.

Please DO NOT act on any of my comments on this thread. Over the years I have been very wrong many times. Just consider my thoughts as a reason to contact your financial adviser and have a discussion with him/her about what you should do.

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"The game is afoot."

This is a CLOUDY prediction. I'll eat my hat if there isn't a class action suit brought against Morgan Stanley for pricing "Facebook" at 100 times earnings on the IPO. If you bought the stock, join the class action suit, you will probably get some money from the settlement. Joining a class action suit costs you nothing. The only downside is that when you do, you relinquish your rights to sue as an individual.

(Gotta get my disclaimer in here. Do NOT act on my post, without consulting with your financial adviser and attorney first.)



............. Goodnight I'm going to bed.

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"The game is afoot."

And on the plus side, as when I was part of a class against a company that committed one of the most egregious of all sins I've ever seen vis-a-vis stocks, you might end up getting $6.32 after the lawyers take their cut.

DANTE, lawyers are going to take their cut either way you go. I think the only reason to sue as an individual would be if you lost really BIG BUCKS.

p.s. Facebook closed at $27.72 today. That's down 27% from the IPO price. It doesn't look like the institutions or fat cats ever got the chance to flip it for a quick profit after gobbling up the shares on the IPO, before the little guys got a chance to buy it once it started trading. I wonder how long they will continue to keep their positions in the stock, now that it looks more and more like a loser, at least for the near future. My guess is that they are looking to get out of it, but it is unlikely they will dump it all at once. Big positions in a stock are difficult to get out of gracefully. Exiting the stock for them will have to be made piecemeal over time. They can't dump 5 million shares at one time, because there won't be enough buyers there to keep that sell pressure from driving the price instantly WAY DOWN. However, I have a feeling that they will be inching their way out of Facebook as gracefully and as fast as they can over the weeks to come.

p.p.s. Gotta put my disclaimer in again. These are just my thoughts, which could turn out to be very wrong. Anyone reading this post should consult with their financial advisor before taking any action.

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"The game is afoot."

Well I wanted to wait a till the stock was out for awhile to see the trend. It pretty much did what I thought and will keep on going down. I base that on that right before the stock went out that Facebook annouced that the ad money declined over this last quarter before the IPO started. They also said they had no idea how to get that ad money flowing back in or even more so. I think that was why Morgan Stanley did the some what questioned annoucement or it down grade hours before. Thing was it was released by and to the media at the same time which might be the saving grace for them. But it was during the road show which has diffrent rules.

Everyone still has to remember this is the first month still that the IPO can buy stocks and keep the stock from completly dropping off the face of the earth. Also to Cloudys point on these other investers and trying to get rid of the stock they have to not completely go into the hole. The thing is that facebook is due to release more stock and will make it even harder to sell what they have and the value will fall more so.

The problem with getting ad money for Facebook it the fan pages that companies like Best Buy and Pepsi have. Fan pages facebook does not cost the companies anything to run. A fan page you or I could also make one up for a company we work for or like with out being directly from the company itself. (But in general they are.) So to say they should
start charging for these is easier said that done. Most facebook fan pages are for any number of thing from a friend that died to what ever that has nothing to do with any type of sales.
I think in over the maybe three years on Facebook I might of notice three ads maybe and have not clicked on one of them. I think one was a dating service and the some othe companies I have never heard of or know what the product was that they were doing.

Thursday was a how can I put it. BS as far as the stock going up. As you can see the number of shares trades has gone down except that day from opening day. It would of also been that way on Thursday. I was watching CNBC on Thursday and the stock was down and volume was slow as in maybe would of closed at maybe the slowest amount of stock sold. The stock was also down a other three percent then also But funny thing is. That 15 minutes a great deal of trading went on before the president of Morgan Stanley went on the air. The stock kept going higher and higher. I forgot his name now the Morgan Stanley president kept on getting a bigger and bigger smile on his face. And the more it went up the more he defended how it was going up and all this other BS. He was on the last hour of the day before the stock market closed. With the increase in the number of stockes traded and the turn aoround in such a crazy manner that should of run then into the next day. I say It was the IPO buy and driving up the stock and the volume then.

Date Price Shares
06/01/2012 27.72 41,837,160
05/31/2012 29.60 110,940,500
05/30/2012 28.19 57,237,340
05/29/2012 28.84 77,941,380
05/25/2012 31.91 37,101,630
05/24/2012 33.03 50,208,760
05/23/2012 32.00 73,541,150
05/22/2012 31.00 101,667,700
05/21/2012 34.03 167,943,600
05/18/2012 38.2318 579,377,500

I still say the Facebool is really worth $3.00 to $4.50 a share now and wil go down in value with the added shares coming out. Even though I think that it will flat line out some place around $15.00 to $18.00 for some time.

I think anyone that is intrested in this stock should have a Facebook account. It is free and will alway will be because most of the people have other place that they can run off to of they start to charge. That way they can see for themself that the ads and what ever are not going to be around. Facebook might go and try and buy a other company if they can to try and get some money flow but that is really even worst if you have to do that.

BTW (or as Cloudy does...P.S.) this is just my personal opinion so take it for what it is worth. 0

The more I look at this, it looks like a Morgan Stanly flip deal that didn't work out for them, their institutional friends, or fat cat individual investors with good connections. Pricing the stock at 100 times earnings on the IPO is very hard to understand. I have to think that the greed factor entered into this. They thought that the little guys were idiots, and would be suckers, who would buy it in a feeding frenzy, because they were locked out of the offering. Their pent up buying insanity would run the stock up, and as more idiots jumped into it, because it was going up, Morgan Stanley and their buddies would have flipped it to them.

Bo, if you are still listening to this thread, I think that Facebook is probably a good company, and will do well over time. However, let me share with you a maxim that I think I created many years ago. "With stocks it is more important what you pay for them, than how good they might be."

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"The game is afoot."

My quote from above...


I believe that at present, very few if any stocks are actually traded based on a company's fundamentals.

Out of curiosity CLOUDY, if this thread wasn't in the free for all forum would you have been aware of it?

BO

To answer your last question first. Possibly not, but aren't you glad that it was here and I got involved...?

On what you first said, I think I will disagree with you. It doesn't look like this is a goofy, runaway market today that doesn't consider the fundamentals of stocks. The most fundamental measurement of a stock is the earnings it reports. Though I no longer follow stocks like I did back in the days, when I was in the business, it looks like they still drop, when they report disappointing earnings, and still go up, when they report better than expected earnings. This is pretty fundamental stuff. Are there other fundamental things to consider...? Of course there are, but earnings ia the most important fundamental thing when it come to price movement in a stock.

Please don't challenge me with the momentum argument on stocks with little or no earnings that are going up just because they are going up. Looking at the stock market this way is gambling, not investing. Yeah, you might win, but there is another possibility. I have always adhered to a value approach to selecting stocks, which is not very exciting, but usually pays off in the long term.

Don't think I need to add a disclaimer to this post.

(Belated edit: For any of you that might have read this post last night, I decided that "is" not "are" was the right word to use, and changed it.)

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"The game is afoot."

I don't understand how you get that valuation. That would put it at about 10 times earnings. They _are_ a profitable company, and worse companies are trading across all market segments better than that.

If you really think that, you seriously could make a killing in some put options right now.

Put option ask on DEC 22 20 would cost you $157.00 assuming you use a broker like Scottrade. $4.50 a share would give you a massively awesome profit.

Then again, I'm almost certain you'd lose your butt betting on it going that low, as I'm almost certain most people doing options lose their butt, as people never seem to know what they're doing!

I put the value at that $3.00 to $4.50 from Facebook itself. They said that the ad income was about $5.45 per person. But that was about a month or so before the IPO went out. Then they said that the last month that they lost about a dollar per user in ad income. Which is about the number of shares that was released.

I also said that I thought that the value of shares would flatline some place around $13 50 - $18.00. So it would not really go down to where the true value should be really.