Tag Archives: initial public offering

gravity settings on facebook accounts to change, sun to rise in the west

mark zuckerberg is possibly satan.  at least, some folks feel that way when they find out the terms and conditions on facebook have changed or that timeline is mandatory or that privacy settings have suddenly shifted so that your mother now sees all the pictures of you passed out on your friend’s couch with a case of empties on the coffee table in front of you.

it’s possible that mark is satan because he has defied the essential laws of nature.  including the most basic economic law of supply and demand.

the dismal science of economics’ first principle is that if there is more demand (people want) for any asset (beer, gold, oil) the price of that asset will go up. if there is an increase in the supply (more more more) of any asset, the price will fall. but get out a six pack and look at this chart and you can figure out the implications without having to shell out tuition money to the university of chicago business school.

on may 18, facebook went public in one of the most anticipated initial public offering ever.  this meant that you didn’t have to be a facebook employee or a real not just facebook friend of mark zuckerberg in order to make money on the one billion member online nation.  the stock price on that first day was $38 and when mark zuckerberg wed priscilla chan that same week, it seemed as if everything he touched would turn to gold.

but that spring of his content was made inglorious by the summer’s discontent.  facebook’s stock price plummeted to an astonishing record breaking low of $17.55 per share.  facebook was washed up.  couldn’t compete with other social networks in the mobile device market.  had an eye popping 9% rate of profiles useless to advertisers.  some early investors in facebook, including cofounder paul thiele, sold what stocks they could–suggesting to the marketplace a sort of no confidence vote in facebook.

this past wednesday was predicted to be a bloodletting:  852 million shares in facebook, nearly as many shares as the pre-existing 921 million shares, would be released for sale.  past and present employees and early private investors were not allowed to sell these shares under legal trade restrictions that expired at midnight.  the morning bell at the new york stock exchange was to be the death toll as the shares were added to the already bloated supply of facebook shares.

more facebook shares.  lower price.  law of nature.

instead, wednesday’s trading on the new york stock exchange in facebook shares was as bizarre as if mark zuckerberg had declared that gravity would not be enforced, that one should look westward for the sunrise and that thing where your older brother told you santa doesn’t exist?

better watch out, better not cry!

by the end of trading, the facebook shares were settling into a nice 12% INCREASE to a price of $22.22.  this makes no sense whatsoever.  unless . . . well, sure, the rational explanation is that there is a class of investors who decided they would wait, that they would hold back and forbear until the trade restrictions expired.  smart investors.

and those folks who purchased on may 18 thinking they were in on the ground floor?  suckas!

or perhaps there’s something larger at work.  maybe mark has created something so magical and wonderful that it is beyond everything we have ever seen.  maybe he’s not satan.  and maybe his next trick . . .

or maybe he’s just an ordinary guy who came up with an idea in his harvard dorm room and turned it into a billion nation empire in less than a decade. i could have done it too, but i was using my dorm room for partying, sleeping and playing james taylor on my eight track.


it’s been a great summer for my friend mark zuckerberg

so lots of folks are frowning about facebook.  the social media network built in mark zuckerberg’s harvard university dorm room in 2004 offered up its shares to the public in may.  at the opening bell, it was trading at $38 per share and expectations were high.  it was the most anticipated of ipo’s!

since then, share prices have plummeted to less than $20 as i write.  board member and one of facebook’s biggest investors peter thiel sold off 80% of his shares today and that’s gotta hurt.  thiel was an early angel to the company, with a $500,000 check.  he’s going to end up with over a billion dollars.  that is so much more of a return on investment than i netted when my ex husband and i sold the family home this summer.  and i don’t see any articles on cnn.com about what a lousy investment the presser family made in real estate.

dustin moskovitz, one of facebook’s cofounders, is selling 7 million shares today, netting him about $9 million. that sounds like a defection, like a friendship issue. but it’s not. moskovitz still has 126 million shares, or about $2.4 billion in the company. so mark, don’ t hit the “defriend” button!

 

but let’s look at mark’s summer.  and facebook’s summer.

mark and his girlfriend priscilla chan married a few days after the ipo in may. contrary to the storyline of “the social network” mark and priscilla were an item beginning even before facebook was started. he’ll always know she loves him for himself! and she graduated from medical school this year and is pursuing her own dream of being a pediatrician. what a happy couple! i have no idea where my “save the date” postcard and my invite went. but that engraved toaster i got you at bloomingdale’s is on its way!

so on a personal note, mark is having a great summer.  and professionally?  well, he’s young and he’s created something so amazing that he could walk away and everybody would still think he’s a genius.

but is he going to walk away?  no.  just because facebook (and the other social network systems) have been overvalued doesn’t mean there’s a fundamental problem.  it just means that some people were a little overenthusiastic.  a social network’s only asset is information about its users.  the only thing facebook owns is information about you–your pictures, your posts, that status update–that it can sell to advertisers.  there’s never been a company model quite like facebook, groupon, zynga, linkedin before.  it’s to be expected some mistakes would happen in figuring out how to value information about its users.

but with mistakes comes opportunity.  the price is dropping.  some analysts think facebook is going to settle around $12 a share and that still leaves mark zuckerberg incredibly wealthy.

mark and priscilla have lived in this home for quite a while. it’s big, to be sure, but not quite what you would expect for a gazillionaire. and i respect that the two of them handed out candy at halloween on their own. they’re pretty regular, all things considered.

and here’s the great thing about the shares settling in the teens–it means that mark can look forward to regular type folks investing in facebook.  including me!

see you at the board meeting, mark!

 

 

 


add a few new members to the 1% club and make sure to log out every once in a while!

there are a few new members to the 1% club as facebook announces an initial public offering.

a lot of the fire in the occupy movement centers around the 1% of americans who make a whole lot of dough but--according to occupiers--don't pay their fair share of taxes. there will be many new millionaires created by facebook's offering, people who either work for the company or were early investors.

mark zuckerberg, the c.e.o. and inventor of facebook, owns 533.8 million shares and stands to be worth $28.3 billion if the valuation of the company at $100 billion is correct.

the winklevoss twins were mark's classmates at harvard and they had some ideas they shared with him that could be considered the facebook concept. uh, that's about as much as my lawyer said i could say. go rent the movie "the social network" or "mean girls" if you want to get a better idea of the whole story. really, either movie would work.

i like the fact that zuckerberg is going to be a billionaire, especially because i know he’ll pay his “fair share” of taxes but because he’s created a product that helps me keep in touch with my friend.  but i know we have to be careful, because it’s important to log out every once in a while and have real interactions with our friends — logging out is the toughest click!

mark zuckerberg needs a fly haircut and some new clothes but i guess with his money he'll be able to do all that.

mark zuckerberg has said something that i’ve always hoped is true for him:  “we don’t build services to make money, we make money to build better service.”

so i have to ask you–


hey, where’s my facebook money? and the need for early supporters. . .

so i’ve been having a wonderful year of meeting facebook friends.  i didn’t meet all 325 of the friends i had as of january 2011, but i got ninety percent of the way there.

some of my friends didn't have time or resources to respond to my request to see them. this dude wrote "harbinger of doom" and is a fan of my grandfather fritz leiber. i never saw him this year although i tried!

 

one of the things i appreciate most about libby hellmann (f2fb friend #7) is that she showed up!  it was january of last year.  i told her my resolution to meet all my facebook friends.  she was a facebook friend.  i said i wanted to spend some time with her.  it took some faith on her part to take part in my resolution when there was no way of telling whether i’d complete it.

i like index cards, datebooks, and lists. libby is on this list as one of the first friends i saw last year. if you have a new years resolution, get some index cards, get some organization, figure out what you have to do each day to get closer to your goal.

 

so last year, right around this time, we met at a restaurant in northfield called seul’s and spent a happy few friendship hours.  i made a video.  i posted a blog.  she was f2fb friend #7–if i was going to finish up 325 friends i just had 317 more to go.  she had faith in me.

libby writes suspense and i am such a fan! you can find her at libbyhellmann.com

 

today we met at the same restaurant because she wanted to celebrate the completion of my project.  the restaurant is now called stormy’s.  the interior is well decorated.  libby looks great.  she is off to cuba because her newest book is set there and she needs to do research.  and i realized how wonderful every one of my facebook friends has been to me!

 

one of the things i appreciate about libby is that she was an early supporter.   if you have a new years resolution you need to find your early supporters.  you need to find the friends who say “you can do it”.  you do have friends who might not give you that support but they might later.  there are friends we need at all stages of what we do.

facebook is set to open itself up to investors with what’s going to be the largest public offering ever.  mark zuckerberg is going to be a very wealthy and since he’s the dude who set this thing up in his dorm room in 2004 i think he deserves a big paycheck.  but. . .

 

 


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