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Facebook, Inc. (FB) Message Board

  • m.beckend m.beckend Jun 5, 2012 4:10 PM Flag


    Seriously, what value would they bring to the table? They can't buy anything directly. They may be able to influence their parents into buying them things, however I just don't see it adding up to additional advertisements/revenue. I see this as a desperate move on the part of FB to justify their preposterously large market cap. Here are a few issues I see with FB and why I see them going lower - into the teens IMHO:

    1. It is clear now that Zuckerberg is too young to be the CEO of a large cap company. His lack of presence after the IPO is disturbing. I understand he is on his honeymoon, but the lawsuits are piling up, negative discussions, and share value has a stone attached to it. He needs to address it and soon. Realistically, he just doesn't care about profitability and that should terrify ANYONE that owns FB stock. He has said flat out he doesn't care about money. He went public because he HAD to.

    2. I don't believe that their 900M users are valid. I think there are a LOT of duplicates and multiples, pets, abandoned accounts, kids under 13 (and until age 16 I see no real value), and flat out phony accounts. The number is substantial no doubt, but I wouldn't be shocked if 30% add zero value.

    3. FB still has not proven they they can generate the types of profit or growth that justifies their sky high PE ratio. They make $0.39 per share. By comparison Apple makes $41. Google makes $33. Their prices are higher (per share) but their profit is 100 fold greater.

    4. People don't shop on FB. People go to catch up with friends, etc. They don't look at ads. I never did when I had a FB account. I could not tell you a single ad I ever saw on FB.

    5. There are serious concerns about privacy. FB is collecting data on every user. Every single one. To sell. To potentially be hacked. Scary scary stuff.

    6. FB can't figure out how to monetize mobile users. They said so themselves. Now rumor is they want to throw their hat into the hardware ring by making phones? Companies that have been in that low margin business for decades are dying on the vine. FB knows NOTHING about the hardware business. If they control the platform (phone) they can monetize the users - but how many people are really going to give up their Droid and Apple platform devices for a social media based phone? Give up their App stores. All the apps they use every day? Not gonna happen.

    Bottom line is this, FB's IPO was a disaster before it ever hit the street. The valuation was too high, the business case unproven, and the future uncertain. Even if they pop in the short term long this thing is a dud.

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