I think it's reasonable to say the FB IPO was bungled, but the price is not to be criticized. Whatever hype and exuberance caused gamblers to roll the dice, they're just lambs to the slaughter. There are factors which will send FB lower, short term, a matter of days and weeks, but longer term, there's a degree of inevitability that FB will trade higher as it becomes subject to long term accumulation and distribution cycles (designed to fleece those lambs rather than slaughter them all.)

As for FB money around Silicon Valley, obviously the money is not here yet and it could be six months to five years before it causes measurable expansion in the property bubble around Palo Alto and Menlo Park (what used to be called the "golden triangle" of commercial office space has become the epicenter of several nuclear scale residential market implosions, so there's no reason to expect new money to come rushing in ...) These are savvy tech geeks who can get on the Web and see the facts without getting zuckered into buying high when it comes to cars and houses. Anyway, the culture around here these days is to not be the ostentatious materialist, so the parking lots of these high flying tech companies are not filled with new Porsches and Ferraris, you'll see a sea of Prius and Tesla battery burners, but rarely a Porsche unless it's a Cayenne Hybrid with mountain bikes on the roof racks -- even that cliche is played out and a bit embarrassing.

If you look at the local car dealers, they're still sitting in their polyester suits at their desks, waiting for that rush of Faceplant "easy come, easy go" money. It hasn't come in and I don't expect it will. I imagine the McLaren dealer will lose a couple of deposits they expected to be "in the bag" and conversely, maybe a GT2 or RS will sell above market, but otherwise, FB has been a non-event to the local luxury discretionary market.

As for FB as a stock, I'll trade the options with a bullish bias, selling the 60%+ volatility and accumulating long stock from short puts. No genius in this strategy -- certainly not yet since I'm under water now with FB below $30 -- and just bought some today at $28.50 with FB already lower at $28.18 ... bloody thing ... : )

My accumulation plan is not even 5% complete so even if FB goes to a projected $13/share "floor" I see all the risk to the upside (I'm happy to share my actual strategy) and full well expect to be selling all the way to $100 and above, and paying taxes in 2013. : )

If ever there was a new issue "household name brand" security, it is FaceBook, now, unflatteringly know as FacePlant. Being such a high profile ticker, it has extraordinary event risk. Any news can be seen as good or bad, large or small, no matter the facts or common sense. Rumors abound and second-guessing runs rampant. I think it's fair to say the people behind the IPO and FB itself are not idiots and they will be serving their own best interests to work towards FB doubling and re-doubling its IPO price. From quarterly earnings to media reports, FB will move and it will move the market with it. Eventually FB will end up in the NASDAQ-100 and that will cause long term accumulation and a degree of price stability. For now, it's a liquid market and a great place to trade, but not a vehicle for "buy and hold" investors will be enjoy the ride unless the investor is familiar with taking significant drawdown and waiting long term (months and years) to see real returns.

 

I'm afraid I can't say I agree. Looks like a dog to me. This is a business with a big address book... ok, a VERY big address book, but no obvious monetisation strategy beyond advertising. And tech customers are notoriously fickle. particularly when the cost to change is $0. Think

Yahoo
Friends Reunited
MySpace

These were not small entities at their peak. This is why i suggest Zuckerberg should have sold more stock. He could have kept 10% instead of 50% and still been the biggest shareholder. I'm speaking from personal experience here as founder and major shareholder of a firm which IPO'd during the dotcom boom. Zuckerberg will hate being answerable to the pension funds and institutional shareholders who demand blood from his baby. He'll become frustrated and the business will fragment before, soon enough, some bright spark will be along with a superior social medium and Facebook will faceplode... IMO of course.

 

Unrelated to this thread, I have enjoyed the 991 detractor 'proof' of "they must be bad because they are not flying off the lot". Of course wait times and sales numbers don't seem to back up the assertion. So I expect it to change soon to "they must be bad because they sell well -- they must be for the unsophisticated buyer."

 

I commute daily into one of the boroughs and first hand see the lack of car culture here in NY. Thats why i rent a private garage. Very few people have respect for other peoples cars and you really take a chance parking on the street and most of the valets could care less either. On the upper east side just looking at the car bumpers tells you most of the story, parking is tight and many use the touch system, also few people in taxi cabs have much concern about what the door hits when they swing it open. I do drive Manhattan and if you drive aggressively taxis and other cars seem to give you room as they correctly perceive that you must be psychotic to start with, driving such a nice car in manhattan, and they dont want to set you off.

 

I think this "Peter Lynch" empirical observation approach is valid and both sides of the observation are valid -- not to make it an each-way bet, but to say that the observations make sense, it's the conclusions or assertions that are tenuous.

We're in the dark depths of a global recession, countries are falling, currencies are devalued to pennies on the dollar, consumers can't borrow for discretionary spending and the outlook is bleak, especially for the US consumer once the election is over and reality kicks in.

As a measure of Porsche, I think they could be doing far better in a warmer economic climate. Rennlist users are not a representative sample of Porsche buyers and I don't doubt Porsche and VW have built a car to selling for five years around the world, not to win over the hearts and minds of enthusiasts that tend to use their 911 in ways that void the warranty. : )

As a buyer, I'd see it as an opportunity to get significant ($10K+) discounts on the 997 and some degree of discount on the 991 or a generous trade-in deal -- it's a buyer's market. Incentives in terms of lease rates are also in favor of the buyer.

So I'd agree the 991 isn't a runaway sales success, but it's conjecture as to the cause. I think it's because the full model line-up is in disarray, we don't have wide body or turbo or AWD or Targa, we don't have all options like adaptive cruise or back-up camera or whatever else makes a buyer wait. If you go into a showroom, it's a mess -- there's competing vehicles side by side, there's every reason to look at discounted 997 off the lot, there's no answers on specifics, it's hard to order a car to exact specs and the order processing at the factory is hit-or-miss. It could be a year before Porsche sorts out these obstacles and allows a customer to visit the Web site, read a review, take a demo drive, order a car and have it arrive in an orderly manner. For now, each of those steps in the sales cycle is an obstacle presenting the customer with good reasons to choose to defer because there's no clear cut decision and motivation to make a purchase.

Conversely, the 991 per se is a solid product and one that is demonstrably superior to competing products from Audi, BMW, Mercedes or their niche micro-brands. It's just a matter of time for the 991 to be available in all flavors and to address early concerns and reservations. This is also the teething process of the sales machine learning how to sell the new product, for the economy to find a bottom, for governments to throw out their central bankers, for wars to run out of money, for political reform to sweep through the corruption in government. Some would say that's an eight year cycle and the world is in the first two to four years of that cycle until laws are put in place and for those laws to take effect. Tough times to be selling shiny metal! : )

 

FB went into the IPO years ago. It's taken years and I think they still rushed it, perhaps in part because the underwriters said "better to sweep money of the table now than risk the perturbations and repercussions of the election cycle."

FB went to market with the elephant in the room given a name and nowhere to hide and that name is monetization. Some companies like GRPN tried to get the elephant to stand still and put a lamp shade on its trunk. ZNGA tried to hire clowns to stand around in front of the elephant. But FB has the asset metric that's used to value companies even when they don't have a healthy P&L -- active subscriber accounts. Of course the question is how active and the concern is really, how many? Of the touted 900M, I'd say perhaps 10% are active and perhaps the "reach" is 50%.

As for feeding that elephant and having it put to work, there's no shortage of methods. FB can compete with established subscriber model players (eg. Skype) and it will surely take its slice of advertiser and customer relationship businesses from Google and Microsoft to Salesforce or entertainment and loyalty like video games, versions, updates, subscriptions (like Portal and Valve) or channels to market through sports franchises, or wholly new markets for them around the world like HR or medical services, aggregation like the way many people now log into sites like Rennlist or posts comments to engage with their favorite sites, etc.

Personally, I hope to see FB also move immediately to political awareness like YouTube, to move to philanthropy and enabling individual freedom, access to resources, education and all those boring things that tend to be the first to get hit with a budget cut and the last to experience the rapid growth and progress that more exciting things like motion-detecting 3D video games or smart phones get without question. High order targets. I don't think FB has the "right" to be lazy and just find ways to make billions from being the intermediary with a lot of tolerant friends.

No doubt FB has a year or planned "wow" events to carry their own brand value through quarterly earnings and to play the wall street game of setting expectations and playing nicely so they appear to have good adult supervision.

FB will have all the usual demons -- government will want to tax and regulate, patent trolls will be waging all kinds of nuisance litigation, competitors will have been laying down minefields in all directions for years, Suckerberg is probably incapable of running the company and his threat to FB is "founderitis" so hopefully they've already got him in a sandbox somewhere away from operations.

I don't think too much about attrition, people rarely actively close their accounts at sites, they tend to only exit a site like Yahoo! because, well, YHOO management is not very good at their job, so they actively send spam to their own subscribers and encourage them to close their accounts just to get rid of the annoyance.

I have a facebook.com account, my browser knows my password, but I've long since forgotten it and would probably just create a new account rather than retrieve my password. Twitter annoys me on a frequent basis (not unlike Yahoo!) so I have it filtered out and ignore it completely. I imagine that's the fate of Twitter, to be filter out to obscurity as an add-on novelty or a device that delivers things like trend detection and analytics to other companies that will go further and do something important.

In terms of connection to the customer, AAPL does it right -- make the customer happy to give their credit card number. AMZN does this well, too, but with the emphasis on service. They're smart to have used their weakness (server costs) as a strength (selling cloud services.) Dear, old GOOG makes their service invaluable at every link in the value chain. The challenge for FB is not to cling to 900M user accounts, but to be compelling and invaluable ... then ask for the credit card number. : )

So I would question how difficult it will be for any team to execute such a "big" business that's also very young and small and immature. FB will have to move forward quickly and remain ahead of the pack, but be sure to be running ahead in the direction the pack is running. To that question of "capacity to execute" I'd say "they've made it this far." If I was to gauge their impact in the market, I'd say I expect all their competitors are chuckling at the IPO fumble, but they're still watching closely to see what happens as FB does a lot more than just buy innovative startups and rejig their Web site design.

As for my interest in FB, it goes not further than trading the thing because it's already its own market, it's its own $50-100B index. My word of caution about FB is to realize that it is not a fair game. The securities markets are no longer the slow-moving asset accumulation auctions that they were from the 1700's through to the mid 1900's. I have no doubt whatsoever that FB will go through repeated accumulation-distribution cycles. One might argue that this move from $38-45 at IPO down to $28 today is the first of those cycles and just looking at the price action, it's been done masterfully to the tune of billions taken from the many and distributed to the few in barely one week of trading -- even AAPL wasn't that destructive. The best advice I can give is to observe that "everyone" was wrong to be greedy about getting into the FB IPO and then wrong to be fearful and get out of FB now and declare it a flop. I'm not encouraging others to buy FB now, but to at least observe its path over the next year and see how consistently the general public investor is on the wrong side of the market.

 

With this I agree 100%! Tough times to be selling 100+ K cars.
What I don't agree with is the assertion that Porsche sales of the 991 seem low because :
a) ' we see too many sitting on the dealer lots ' or ' we don't see too many on the streets '. I mean it's been 4-5 months since it's launch,for God's sake,how many of these 100+ K cars are we suppose to see in this short time?! It's not like Hyundai launched their newly redesigned Sonata or Honda their brand new Accord!
b) ' the 997 is a better 911,which makes buyers stay away from the 991 for now ' (also not true!).

 

Ah, but are they really? Sales numbers do not seem to be indicating any staying away.

 

Anecdotally, I only see about one 911 per week in Houston. This is the the third largest city with arguably the strongest economy in the nation. Of course it's spread out over a couple of thousand square miles.

I've seen two 991s since they started shipping. This isn't the latest Ford truck. It will take a while to get more than a few on the road.

 

I'm with you fbroen,
I edited my original post because it was misunderstood.
The 997 comment was supposed to be the second silly reason some folks think the 991 sales are low.

 

Got it. Thx. Sorry that i misunderstood.

 

The hamptons/sag harbor are chock full of astons/rollers/bentleys/ more 997 cabrios than you could shake a stick at/ Last weekend i saw a ferarri ff as well as an sls and new sl63 and more than one cobra 427. Some of those are far more rare than the numbers of 991's sold in the metro area

 

I live in Cleveland, OH. I have only seen one other, my dad's. Which I am completely ok with.