Facebook raises share price range after strong demand

[DVTimes]

Facebook has raised the price at which it hopes to sell its shares from $28-$35 to $34-$38, potentially putting its total value above $100bn (£62.2bn).

The company said strong demand had pushed up the price. Trading in the shares is expected to begin on Friday.

A valuation at this level would make it worth more than the US corporate giants Disney, Ford and Kraft Foods.

The eight-year-old social network has 900 million users worldwide and made a profit of $1bn last year.

If investors buy the shares at the mid-point of $36, Facebook would raise $12.1bn through its planned sale of 337.4 million shares.

Despite the strong interest, a Facebook team is continuing to tour the US with an investor road show, a move undertaken by companies to drum up demand ahead of a sale of new shares.

Facebook is set to list on the Nasdaq and its value will rival Amazon's current worth of $100bn.

Facebook founder and chief executive Mark Zuckerberg will remain in control of the company even after the flotation, controlling more than 57.3% of the voting power through shares he holds and through voting agreements with other shareholders.

Small shareholders

Many private investors are unlikely to be able to buy as many shares as they want.

Major stock market listings of private companies generally have only a small allocation of shares for private investors of up to 20%.

Individuals hoping to buy ahead of open trading must register with a broker, if they do not already have one and put in a formal request.

The brokers themselves have to wait to see how many shares they will be allocated from one of the leading investment companies who are underwriting the issue.

Fidelity, which will be getting a its shares from one of the underwriters Deutsche Bank, says customers should have $500,000 (£312,000) in their accounts and have made 36 trades in the past year to be eligible.

Other companies' account requirements are a bit less onerous, but still require customers to have made a number of trades and have a substantial sum of money in their accounts.

Even if a customer meets the requirements, there is no guarantee they will get any shares.


http://www.bbc.co.uk/news/business-18070141

[Paul Markham]

How can a company be valued at 100 times the profit it makes in a year?

It seems someone is going to get burned big time when the reality sets in.

[DamianJ]

Originally Posted by Paul Markham

How can a company be valued at 100 times the profit it makes in a year?

Do you really not know?

[DVTimes]

Originally Posted by Paul Markham

How can a company be valued at 100 times the profit it makes in a year?

It seems someone is going to get burned big time when the reality sets in.

It depends if they can keep going.

If they can do well with app store and such then they could do well.

I think the next few years will be the mobile phone game, so if they can get there apps on the phones then they will make it rich.

I suspect appel may be thinking that way too by selling (or rummers are) the ipad mini in oct at less than its value as its the apps they will make cash on.

however myspace was the big thing and do people use it today as they once did.

i suspect it could be like the property boom, were people buy when the house prioses were high, then it drops.

google is interesting as they seem to work smart. they now have a car that drives itself on the back of there maps. i wonder if that was there plans when they started to film the streets, to simply provide data for its cars.

thats a clever long term thing. as ok, today it may be a few cars that self drive. but in say 20 years when people feel ok with self drive many cars will be. just think how much say bus firms will save if there buses have no drivers. and as cars are going electric anyway then you can see how easy this will be. so google has a long term method of money making.

at the moment google now has many methods to make money and adverts on google are just one.

facebook has a problem that its still limited to mainly making money from adverts. If it does not expand like google into other areas then it may have problems.

google seems now to have long term plans, and one wonders if facebook can see that far forward.

today i would say google will be the one that lasts. you can now see how the google thing is cleverly comming together.

[mineistaken]

Originally Posted by Paul Markham

How can a company be valued at 100 times the profit it makes in a year?

It seems someone is going to get burned big time when the reality sets in.

its a bubble.

[Verbal]

This is the beginning of the end for Facebook. I'm guessing in 5 years they will be another MySpace and there will be some other newer "greatest thing".

[DVTimes]

http://www.dvtimes.com/2012/05/15/go...ged-the-world/

[L-Pink]

100 X earnings

.

[DVTimes]

Originally Posted by Verbal

This is the beginning of the end for Facebook. I'm guessing in 5 years they will be another MySpace and there will be some other newer "greatest thing".

it depends if they can add to facbook.

google has many bows. the car thing shows its long term. if it develops lots of patents for self driving cars then its going to be earning from them for years.

so even if google had no users its still going to make money.

the question is what if facebook lost its users.

the bulk of faccebook seems to rely on its website online. i personaly am finding the site does not always work 100%. some times i go on and its not working.

many many many people use facebook apa. and with such phones getting so cheap its likly this can only increase.

and as facebook aps do not carry adverts (as often they are made by independent firms who will not include them) it becomers much harder to make money.

of couse you have the data on peoples uses. but local laws may stop that too. for instance in the uk we have information technology acts which limits what you can do with somones data.

facebook seems at the moment focused only on one area while google seems to have its fingers all over the place.

it may be that once facebook makes money from shares it will use the money to go buy lots of other firms. that is what i would do if i was them. buy say a tv station (a small one) and invest in making tv shows to sell to big networks. buy a small car firm and make it big. if i was facebook i would have bought saab and gone heavy on its reasech and development side. there are lots of firms that are not coping as they cannot get cash that are or will go bust that you could buy cheap and pump in the cash to boost them. for instance i would (if i was facebook) buy a uk train firm.

i suspect its going to be what facebook does with the huge cash it will make thats interesting.

it may simply do not much and just put its eggs all into the facebook site with add ons. if so then its pronbably not going to have a long shelf life.

[Verbal]

Originally Posted by DVTimes

it depends if they can add to facbook.

google has many bows. the car thing shows its long term. if it develops lots of patents for self driving cars then its going to be earning from them for years.

so even if google had no users its still going to make money.

the question is what if facebook lost its users.

the bulk of faccebook seems to rely on its website online. i personaly am finding the site does not always work 100%. some times i go on and its not working.

many many many people use facebook apa. and with such phones getting so cheap its likly this can only increase.

and as facebook aps do not carry adverts (as often they are made by independent firms who will not include them) it becomers much harder to make money.

of couse you have the data on peoples uses. but local laws may stop that too. for instance in the uk we have information technology acts which limits what you can do with somones data.

facebook seems at the moment focused only on one area while google seems to have its fingers all over the place.

it may be that once facebook makes money from shares it will use the money to go buy lots of other firms. that is what i would do if i was them. buy say a tv station (a small one) and invest in making tv shows to sell to big networks. buy a small car firm and make it big. if i was facebook i would have bought saab and gone heavy on its reasech and development side. there are lots of firms that are not coping as they cannot get cash that are or will go bust that you could buy cheap and pump in the cash to boost them. for instance i would (if i was facebook) buy a uk train firm.

i suspect its going to be what facebook does with the huge cash it will make thats interesting.

it may simply do not much and just put its eggs all into the facebook site with add ons. if so then its pronbably not going to have a long shelf life.

It will be interesting to see how it plays out. Personally, I've noticed many people moving away from FaceBook, or at least be less involved. I'm sure their stats won't back this up but it's something I've noticed. With their new responsibility to shareholders, I foresee an ever-increasing intrusion to the user experience. Whether people will care or not will be the big question ... That being said, they haven't cared in the past, but FB WILL need to do something drastic to generate a lot more revenue to justify the IPO or eventually to compete with GOOG.

[tammix]

up ...up ...and *pop!*

[2intense]

facebook is for retards

[arock10]

selling all my sites for 100x yearly earnings, its a bargain!

[sleazydoesit]

Would you buy 1,000 shares if you had the money and the opportunity?

I think I'd pass. But that just means the stock will blow up and I'd miss out because that's how most of my investing decisions go.

[Paul Markham]

Originally Posted by mineistaken

its a bubble.

We've seen enough of them in the recent years.

Let's wait and see what the shares actually do when released. Still 100 x the profit margin is a bit over the top.

[12clicks]

just proves there's still a lot of dumb money out there

[DVTimes]

Facebook is later this week set to become the first $100billion IPO - but half of Americans still think the social networking site is just a 'passing fad'.

Mark Zuckerberg's firm's expected asking price - which will see its value eclipse that of Disney, Ford and Kraft Foods - is also 'too high', believe the same number of U.S. citizens.

Despite having 900million global users, and 40 per cent of all Americans logging in at least once a week, the Associated Press-CNBC poll revealed skepticism as to whether the site's 'bubble' can last.

http://www.dailymail.co.uk/news/arti...ssing-fad.html

[eroticsexxx]

I honestly don't believe FB is a passing fad because of the countless opportunities for societal integration, but Zuckerberg is having a damn good run, regardless.

[Paul Markham]

Originally Posted by DVTimes

Facebook is later this week set to become the first $100billion IPO - but half of Americans still think the social networking site is just a 'passing fad'.

Mark Zuckerberg's firm's expected asking price - which will see its value eclipse that of Disney, Ford and Kraft Foods - is also 'too high', believe the same number of U.S. citizens.

Despite having 900million global users, and 40 per cent of all Americans logging in at least once a week, the Associated Press-CNBC poll revealed skepticism as to whether the site's 'bubble' can last.

http://www.dailymail.co.uk/news/arti...ssing-fad.html

The proof will be those who buy the shares and what they will be valued at a month after the launch.

[DVTimes]

http://www.dailymail.co.uk/sciencete...l-network.html

Interesting stuff.

They are saying that the adverts are no use to them. Be interesting if others stop too.

[2intense]

Originally Posted by DVTimes

http://www.dailymail.co.uk/sciencete...l-network.html

Interesting stuff.

They are saying that the adverts are no use to them. Be interesting if others stop too.

[DVTimes]

Originally Posted by Paul Markham

The proof will be those who buy the shares and what they will be valued at a month after the launch.

watch them drop in price after 24 hours I bet.

[Firehorse]

Diversification is often the best long-term business model, and Google is a great example of this.

[12clicks]

Originally Posted by DVTimes

http://www.dailymail.co.uk/sciencete...l-network.html

Interesting stuff.

They are saying that the adverts are no use to them. Be interesting if others stop too.

I've been saying this for a while. as soon as all the people who WANT to try advertising on face book actually GET to advertise on facebook, the demand will die because roi isn't there.
Kinda like the early days of advertising on yahoo.

[DVTimes]

Originally Posted by 12clicks

I've been saying this for a while. as soon as all the people who WANT to try advertising on face book actually GET to advertise on facebook, the demand will die because roi isn't there.
Kinda like the early days of advertising on yahoo.

yes

i wonder if this will affect share prices.