Facebook Shares Fall

This is an interesting one, because lots of noises were being made last week to the effect that, No, it wasn't like the dot.com bubble...

http://news.sky.com/home/business/article/16232408

Facebook Shares Tumble By 13% On Second Day

Facebook shares dropped by more than 13% on their second day of trading.

The shares dropped below their debut price of $38 (£24) in early Wall Street trading, at one point falling to $33 (£21) - down 13.7%.
They began to rise as the day progressed. The shares ended their first day, Friday, flat, despite an initial surge to $43 (£27).
The fall has raised concerns about the value of the stock should its lead underwriter, Morgan Stanley, stop propping it up.
There are also fears that investors, hoping for a surge in price, decide to pull out.
The company has a host of high-profile investors, including Apple co-founder Steve Wozniak and U2 frontman Bono, and more than 500 million shares exchanged hands on the stock's first day of trading.

There was some speculation after Facebook's stockmarket debut on Friday that its IPO (Initial Public Offering) partner, Morgan Stanley, was buying shares itself to keep their value above the opening price of $38.
A spokesman for Morgan Stanley would not confirm or deny this strategy when asked by the Wall Street Journal.
Analysts have suggsted that short traders - who make a profit from falling share prices - have been trying to capitalise on Morgan Stanley's actions and that the bank has stopped intervening to discourage them from doing so.
Shares in other recently floated technology companies such as LinkedIn, Groupon and Zynga were dragged lower by Facebook's performance but the wider Nasdaq index of technology shares rose.
Meanwhile the Nasdaq exchange has apologised that a glitch in its system affected trading in newly-issued Facebook shares on Friday.

The US stock exchange is planning to revamp its technology systems that handle IPOs after trading in Facebook shares was delayed by half an hour as the company went public and investors were left unaware for hours as to whether their buy and sell orders had been executed.
With shares at $38 (£24) a piece, the company was valued at $104bn (£66bn) on Friday, making it more valuable than Amazon, Disney, McDonalds or the Ford Motor Company.
Facebook has more than 900 million active users globally who log in at least once a month. But the firm makes only a tiny proportion of its income from its users – mainly through advertising.
The founding of the social networking site by Mark Zuckerberg in a Harvard dorm room was made into a film in 2010.


Does FB ever get any good publicity?

I'm not sure, Bonny. There is so much wrong about FB.

It isn't really anything, is it? It's just a bloated, irresponsible monster - it isn't for anything.

Not really, Bonny. It is fun now and then but it is also burdensome and can also be as false as false can be.

They do make loads and loads of money by selling data of each and every FB user - without consent.

http://news.sky.com/home/business/article/16233200


Facebook Share Value Plunges On Nasdaq


Katie Stallard, media and technology correspondent
Facebook shares have fallen sharply for a second day, wiping billions off the notional value of the company.

The social network stock, branded 'FB' on the Nasdaq exchange, fell more than 8% on opening on Tuesday, before rallying to 4.2% down within 90 minutes of opening.
Facebook shares fell 11% on their second day, after the hype surrounding the firm's flotation on Friday evaporated.

Shares were initially priced at $38 (£24), valuing the company at around $104bn (£66bn), but doubts have persisted about whether the company can convert its huge global following into revenue.

Facebook now has more than 901m users worldwide, but some have questioned its ability to deliver that reach into a tangible return for advertisers.
General Motors cancelled its $10m (£6.3m) marketing contract with the social network last week, claiming its adverts had little impact on its consumers’ decisions to buy cars.
Investors said the firm would have to justify its valuation and demonstrate its maturity.
David Rolfe, chief investment officer at Wedgewood Partners, said: "Wall Street is a severe task master and they're going to want to see quarterly results, then guidance, then subsequently they're going to want to see that guidance beaten, and then the guidance raised."
Questions have also been raised about the decision to price opening shares at $38, up from the initial range of $28-35 (£18-22) per share.
Financial blogger and chief market strategist at Fusion IQ in New York, Barry Ritholtz, blamed the company, its underwriters, and the exchange itself.
He said: "What we see are a series of bad decisions made by Facebook's executives going back many years. The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange."
Founder Mark Zuckerberg rang the opening bell by remote internet link from California on Friday, surrounded by thousands of cheering Facebook staffers.
He announced his marriage to long-term girlfriends Priscilla Chan on Saturday by updating his relationship status on the social network.
The company’s plunging share price since will make for uncomfortable honeymoon viewing.

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I didn't realise GM had pulled out. Though I doubt if Zuckerberg will care, he's made his pile.

I am astounded, all over again, at the failure of so many supposed financial geniuses to see that the FB bubble was going to burst, like the dot.coms all over again.

Face Book appears to be successful because so many millions of really thick people use it, but those with a bit of sense are beginning to realise that it is not a good place to be. The rest of us wouldn't touch it with a barge pole.

FB's woes are continuing:

http://news.sky.com/home/business/article/16233722

That's a good point in one of the comments:

An investment analyst should simply ask the question - "would I or my clients buy a product or service because it si advertised on Facebook?" If the answer is no, than that is a good reason not to invest in the share offering.

Personally, it would put me off buying a product, if it was tied into FB. Between the bad publicity, and the morons who use FB, it can't be a good platform for advertisers, so it's pretty worthless.

Oh dear, it just gets worse. Or better.

http://news.sky.com/home/business/article/16233722

Facebook Founder And Banks Sued Over Float

3:04pm UK, Wednesday May 23, 2012
Facebook, its founder and several banks behind its flotation last week have been sued by disgrunteld shareholders in a New York court.

The shareholders have claimed the defendants hid the social networking site's weakened growth forecasts ahead of its $16bn (£10bn) initial public offering (IPO).
The defendants were accused of concealing during the IPO marketing process "a severe and pronounced reduction" in Facebook revenue growth forecasts, resulting from increased use of its app or website through mobile devices.
The lawsuit was filed in the US district court in Manhattan, according to a lawyer for the plaintiff.

The Facebook share price has suffered since Friday's $38 (£24) launch and it fell $3.03 on Tuesday to close at $31 (£19.75) - a drop of more than 18% on the IPO.
Early market trades on Wednesday showing only a minor share price improvement.
The legal action comes after regulators said they are investigating Morgan Stanley, the lead investment bank that handled the IPO last week.
A report emerged that claimed it selectively informed clients of an analyst's negative report about the company before the stock started trading.
Financial Industry Regulatory Authority boss Rick Ketchum, the self-policing body for the securities industry, said the question is "a matter of regulatory concern" for his organisation and the powerful Securities and Exchange Commission (SEC) watchdog.


The top securities regulator for Massachusetts, William Galvin, said he had also subpoenaed Morgan Stanley over the claim only divulged to some clients the revenue cut estimates for Facebook.
Morgan Stanley said that it "followed the same procedures for the Facebook offering that it follows for all IPOs" and that its procedures complied with regulations.

The questions about the role played by Morgan Stanley as lead underwriter have added to the confusion surrounding Facebook's IPO, which was one of the most hotly anticipated stock debut in years.
The IPO raised $16bn (£10bn) for the social networking company and valued it at $104bn (£66bn).
Meanwhile, stock market boss Robert Greifeld acknowledged to shareholders of Nasdaq's parent company that "clearly we had mistakes within the Facebook listing".


The stock debut, originally set for 11am on May 18, was delayed by more than half an hour because of technical problems, with some brokerages still sorting out the aftermath on May 22.
"Unfortunately, our clients continue to feel the effects of this in some cases," Fidelity Investments spokesman Stephen Austin said.
But brokerage firm Needhams has issued a "buy" rating for the stock, with a $40 (£25.60) target price.
According to Reuters, Morgan Stanley analyst Scott Devitt cut his estimate for Facebook's revenue this year to $4.85bn (£3.05bn) from more than $5bn earlier.

Further scrutiny has been levelled at the IPO after the Wall Street Journal reported that Facebook's chief financial officer David Ebersman decided shortly before the stock debut to raise the number of shares the company would offer by 25%.
The newspaper claimed that underwriter Morgan Stanley had assured Mr Ebersman there was plenty of demand for the stock.
A spokesman for California-based Facebook declined to comment on the claims.


You'd need a heart of stone not to laugh at Zuckerberg gettiing his comeupance like this.

My eldest son and my broker both said "Don't even consider buying these shares", so i didn't. I prefer to acquire property or land, to be truthful. LL

I don't pretend to understand the process of Selling and Listing this sort of thing, but it has been obvious to me for some time that Face Book was losing popularity, and surely the value must be related to how many people use Face Book.

Personally, I think that The Pitch Forking hasn't helped, especially when Face Book appears to do nothing about it.

I would think FB has been used as a vehicle of abuse in every language known to man by now, Sabot, and knuckledraggers are NOT the kind of people who are interested in high quality goods, so it would be a waste of money advertising on it.

It seems to get just as much bad publicity in the US as it does in the UK. I have no sympathy for them whatsoever, frankly.

No, nor me, Bonny. The whole thing terrifies me.
Of course Face Book is abused World Wide. And Paedophile Grooming won't just be happening in The West.
It was bound to sink when certain people began to realise how little control there is.
Whatshisname probably got out just in time.

I only hope that some of The Morons bought shares. A lot of them seem to have more money than sense.