facebook stock value
The much anticipated announcement from Facebook today (Thursday) has left us investors with two questions.
The first, what is Facebook Home?
The second, is this finally the development that CEO Mark Zuckerberg needs to rally investors behind Facebook stock, and lift it back above its IPO price of $38?
The social-networking giant Thursday unveiled Facebook Home, a customized homescreen for Android smartphones. Facebook Home highlights all things Facebook - a dream come true for anyone who loves the social media tool.
Facebook IPO Deal Leaves Wall Street Seeing Red
The U.S. Securities and Exchange Commission on Monday approved Nasdaq's plan to pay $62 million in compensation to brokers for mishandling the Facebook IPO. The Nasdaq missteps during Facebook's (Nasdaq: FB) debut cost Wall Street a collective $500 million and firms have fought to recoup those losses.
The amount was cleared by the SEC after Nasdaq offered to pay more than is allowed under its existing bylaws. As a self-regulatory organization, the Nasdaq enjoys certain legal protections which could have resulted in a significantly smaller settlement.
Nasdaq proposed the voluntary $62 million as more firms claimed that the exchange misrepresented facts of what went wrong in trading that day. The amount is much more than the $3 million cap its rules permit for technical glitches.
Not everyone's on board with the decision. Citigroup Inc (NYSE: C) and UBS AG (NYSE: UBS) urged the SEC to reject it, saying losses within their market-making units exceed $62 million. In fact, Citigroup raised the immunity argument last August in a letter to the SEC.
"Market participants suffered hundreds of millions of dollars of losses as a result of Nasdaq's profit-driven conduct prior to and during the Facebook IPO, not a result of protected regulatory activity by Nasdaq, or routine system failures. Nasdaq should not be permitted to hide behind regulatory immunity," Citi wrote in a letter to the SEC.
UBS, which claims to have lost more than $350 million, told the SEC brokers should be made whole. Many agree.
"Why should the banks and brokers be left holding the bag for Nasdaq's snafus?" Scott Sales, a lawyer at Paul Hasting LLP who handles corporate listings and is not involved in the settlement, told The Wall Street Journal last month.
The SEC acknowledges the proposal won't compensate for all losses, but added it provides "significantly more compensation for eligible claims, outside of litigation, than would otherwise be available."
Can Mobile Really Drive a Facebook Stock Rally?
One of the reasons Facebook stock (Nasdaq: FB) hasn't fared better since it started trading - it's off 25% from its $38 IPO price - is the company's failure to profit from increased mobile activity among users.
But now, less than a year after Facebook's acknowledgement that it needed to monetize its growing mobile member usage, the company bills itself as a truly mobile company.
"After initially struggling, Facebook has now mastered mobile, and I think the company has a bright future," CNBC's Jim Cramer said.
The company has made headway in the arena. Mobile monthly active users increased to 680 million in January, up 57% from a year earlier.
And mobile ad revenue tripled from the third to fourth quarter and now comprises 23% of total ad revenue.
"Over the last six months, while the public has pondered its mobile strategy, Facebook has quietly emerged as the superpower of application discovery, and is progressively playing a powerful role in reshaping e-commerce, media and advertising on mobile platforms," wrote All Things D. "Facebook's new products - ranging from open graph and timeline to mobile installs - are reshaping how brands, companies and app developers can connect with their audiences and facilitate discovery in a crowded app world."
More than half of Facebook users now access the site via mobile devices even though the on-the-go site lacks many features included in the PC version.
Nonetheless, the shift has been dynamic and is chipping away at FB's desktop income stream, which generates greater, but now waning, revenue.
All Things D says that as Facebook's mobile infrastructure develops, the social media behemoth is poised to transform mobile's future much like Google's (Nasdaq: GOOG) Adwords changed the face of search.
So does this mean the Facebook stock price will start to reward investors?
Facebook Earnings Report Gives Investors Zero Reasons to Stick Around
The first Facebook earnings report since the company went public was released today (Thursday), and the numbers came in right in line with lowered, underwhelming expectations.
Facebook met earnings per share estimates of 12 cents on revenue of $1.18 billion. Analysts had expected EPS of 12 cents on revenue of $1.16 billion.
Estimates had been slashed several times and many experts did not think Facebook (Nasdaq: FB) would miss these lowered estimates - especially after is horrible IPO already delivered a colossal disappointment.
But the fact that earnings forecasts were so low made the fact that the company beat them a non-event.
"These earnings are meh," one equities analyst told Business Insider.
Another problem with the earnings report: There were no real clues as to how Facebook was ever going to make real money.
Facebook has had a hard time turning users into profits as more people use Facebook via mobile, an area Facebook has yet to monetize - and a key issue investors want addressed in today's earnings call.
"Everything is moving toward mobile," Debra Williamson, an analyst at eMarketer, told USA Today. "Gaining revenue from mobile and improving that experience are two things that Facebook absolutely has to focus on in coming years."
Reports surfaced Thursday that Facebook hired a team of former Apple Inc. (Nasdaq: AAPL) employees to completely redesign the Facebook iPhone app, which will no doubt include some of its new advertising plans. The aim is to generate more revenue from its growing mobile user base.
But it's still unclear whether or not Facebook can do that.
Facebook Stock Price Gets Small Bump in Lackluster Debut
In what was one of the most highly anticipated initial public offerings in history, Facebook (Nasdaq: FB) finally made its debut among much fanfare and frenzy Friday.
But the Facebook stock price failed to soar as high as the hype. While not exactly a dud, the intro was definitely subdued.
Shares opened around 11:30 a.m. in New York at $42.05, up about 11% from Facebook's IPO price. Momentum quickly ebbed, and shares dropped as low at the $38 IPO price in the first half hour of trading.
By 3 p.m. shares were hovering just above $38. But with an hour of trading still to go, investors shouldn't get complacent.
"The day isn't over," cautioned Money Morning Chief Investment Strategist Keith Fitz-Gerald. But regarding Facebook's debut, "initial trading has not been impressive."
Facebook Stock Ready to Roll – But Where Will it Go?
The Facebook IPO price was set and the stock is ready to start trading - but will it live up to its hype or sharply sell-off?
The social media giant priced at $38 a share, the company announced after market close yesterday (Thursday).
That makes Facebook the largest tech IPO in history, valued at $16 billion.
It's the third largest U.S. IPO ever, behind first place Visa at $19.7 billion and then General Motors, which raised $18.1 billion.
While the stock has created unrivaled investor frenzy, there is a wide range of predictions for how Facebook will do in its first trading day - and who the real winners will be.
"The ones who make out on IPOs are the early investors, venture capitalists, founders, and underwriters," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "The public almost always goes along for the ride...whether or not they get taken for a ride remains to be seen." The Facebook stock price will be determined when it starts trading today at 11 a.m.
Where the cutoff is for considering the IPO a success varies - with many thinking anything below 50% would be a disappointment.
"I think anything over 50 percent will be considered a successful offering - anything under that would be underwhelming, Jim Krapfel, an analyst at Morningstar, told Reuters. "A lot of retail investors are not concerned about valuation. That's what is going to drive the first day pop."
Sorry, NYSE: Facebook (NASDAQ: FB) Will Trade on Nasdaq
Investors finally have the answer to where Facebook Inc. will choose to list shares when the social media powerhouse starts trading this year.
Say hello to NASDAQ: FB.
Facebook had no comment as to why it chose Nasdaq. The news was reported in The New York Times citing a source speaking on anonymity.
Facebook plans to raise up to $5 billion in its initial public offering (IPO), which it filed for Feb. 1. It's expected to start trading in May.
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Facebook IPO: Where's the Love, Mark Zuckerberg?
The long-awaited Facebook IPO is finally arriving - and it's time for Mark Zuckerberg to share the love.
But most of Facebook's 800 million users won't get a chance to grab a piece of the multibillion-dollar deal.
Instead, the shares will be reserved for the wealthiest investors, not the loyal users who have fueled Zuckerberg's rise to riches.
Before Facebook, Zuckererg was just a college student....
Today, Zuckerberg's net worth is $17.5 billion and he's ranked No. 52 on the Forbes list of billionaires - No. 22 in the United States - and No. 9 on the Forbes list of powerful people.
"Zuckerberg made history with Facebook - and now he's the king of social media and social networking - the man with the Midas touch," said Money Morning Capital Waves Strategist Shah Gilani. "But now it's time for him to give some of the gold that he's earned as the head of Facebook back to the people who helped make that happen. They're the ones who have brought his company to the forefront. They're the ones who should be participating in this."
So, how could Zuckerberg use the Facebook IPO to give back to those who've helped him become an Internet legend?
Gilani has a plan for that...
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Zynga IPO Flop Proves Social Media Listings Are Still Suspect
A strong debut by Zynga Inc. (Nasdaq: ZNGA) today (Friday) could have redeemed the tarnished reputation of social media companies. Instead, the online game-maker became the latest addition to salvage yard full of over-hyped social media companies that didn't live up to the promise of their initial listings.
After debuting at $10 a share, Zynga stock tumbled 7.75% to $9.25 in just four short hours of trading.
Money Morning Capital Waves Strategist Shah Gilani wasn't surprised.
"I don't particularly like the position the company's in. It's got a lot of competition at its heels and I'm not sure about the valuation of the stock," he said on Fox Business' "Varney & Co." program this morning. "I think there's a lot of hype in the social media space."
Indeed, Zynga's failure follows in the footsteps of Pandora Media Inc. (NYSE: P), LinkedIn Corp. (NYSE: LNKD), and Groupon Inc. (Nasdaq: GRPN).
But that's not all.
Here's what Zynga's initial public offering (IPO) means to investors going forward:
- Zynga will set the tone for 2012: The tech IPO market this year has fizzled, and was in desperate need of a spark that Zynga didn't provide. This is an undesirable lead-in for Facebook Inc., which is expected to debut in the second quarter of 2012. It might also hurt Yelp! Inc., the business review site that filed for an IPO on Nov. 17.
- It could influence future tech-IPO overpricing: Zynga drastically scaled back its initial pricing by more than 50% since July, when it was valued at $20 billion. Tech IPOs priced earlier in the year received a barrage of criticism for overpricing, but there's been much less of the same talk surrounding Zynga's range of $8.50 to $10. If it fails to close above $10 a share today, future tech IPOs may rethink their strategies.
A Tech IPO Bellwether: What to Watch as Zynga Stock Starts Trading
Social-gaming giant Zynga Inc. starts trading today (Friday), capping off a rocky year for tech initial public offerings (IPOs). A strong performance from Zynga stock today and into the New Year would shed the "bubble" reputation surrounding the sector in 2011.
Here's what you need to know about this latest tech IPO:
- Zynga will set the tone for 2012: The tech IPO market this year has fizzled, and could use a spark. Zynga could provide one. Scott Sweet of IPO Boutique told clients in an e-mail Wednesday morning there was more investor interest in Zynga than available shares. A strong debut for Zynga stock would be a good lead-in for Facebook Inc., which is expected to debut in the second quarter of 2012. It might also help Yelp! Inc., the business review site that filed for an IPO on Nov. 17. Finally, it might even subdue talk that tech is doomed for a second dot-com bubble.
- It's Facebook-dependent: Zynga's growth is tied directly to Facebook. It generates a whopping 95% of its revenue through the social networking site, and that's not going to change anytime soon. While the relationship is an incredible revenue boost for Zynga, it's also a huge investor concern. If the business relationship soured, Zynga's revenue stream would dry up immediately.
Still, this dependence could give Zynga stock a boost, in that investors eager to profit from Facebook's growth can do so with the social gamer.
Zynga's contract with Facebook isn't up for review until 2015, giving Zynga three years to develop new revenue sources and decrease its Facebook dependence - if it proves detrimental. The company plans to push its product toward high-growth Asian markets.
- It could mark the end of drastic tech-IPO overpricing: Zynga has drastically scaled back its initial pricing by more than 50% since July, when it was valued at $20 billion. Tech IPOs priced earlier in the year received a barrage of criticism for overpricing, but there's been much less of the same talk surrounding Zynga's adjusted range.
BTIG analyst Richard Greenfield recommended participating in the IPO in the $8.50 to $10 range, and said even at the higher end he thinks it could yield up to a 50% return for investors within a year. Greenfield said the lower IPO price range favors investors and expects the company's revenue to grow by about 45% over the next two years.