Felix Investments, a New York City investment manager, is giving rich clients a chance to [snag shares of Facebook before it goes public]. Felix is among a handful of firms vying to get an early jump on Facebook's initial public offering (though the company says it has no plans of doing one). These firms have been pooling clients' money to buy blocks of employee-held shares of the social network company before any IPO. Felix Investments wouldn't comment, but sources say the firm is looking to pay around $25 per share of Facebook, which values the company at close to $11 billion, according to private share marketplace SharesPost...The company's revenue is secret--estimates for 2009 range from $300 million to $500 million--and there are no big publicly traded social networking sites for comparison...This is just a lesson in supply and demand: Few shares are for sale, and everyone wants Facebook bragging rights.The high price of Facebook stock is a prime example of the role that scarcity plays in our economy: since resources are limited, prices go up. While Forbes goes on to say that Facebook might not have great long term potential, it's interesting to watch the contagious Facebook addiction spread throughout the financial sector.
Saturday, January 9, 2010
Bridgett Colling...is buying Facebook stock.
So according to Forbes.com, rumors are floating around that Facebook might be set to go public soon. Apparently, your ultimate procrastination tool is worth big bucks to those who can afford to buy a share:
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It is funny to hear that facebook as spread to the financial sector. Who would have thought that they would someday be able to buy stock in one of the main procrastination promoting websites on the internet.
ReplyDeleteI a curious to see how successul the facebook stock proves to be and how long it will last.
Facebook is the place to be right now. It seems that everyone has a Facebook these days. There is no doubt in my mind that Facebook is worth about $11 billion. The major issue that runs through my mind is how long Facebook will be the top social networking site. A few years back Myspace seemed to be the top social networking site, but Facebook seems to have taken the lead in social networking. If Facebook is the place to be now, will it be the place to be in 10 years? Would investing in this site be a good move or a bad move if it goes public? (A)
ReplyDeleteI agree with Jason's points regarding how long Facebook will be the top social networking site. Mankiw's fourth principle, "people respond to incentives", can be applied in this case. The current marginal benefits are greater than the marginal costs so why not try to make a few bucks doing it. No matter what happens, Facebook will always be prevalent in social networking and will never totally die off allowing the market to stay open. A E
ReplyDeleteI just can't imagine how much longer facebook is going to be a big deal. Facebook seems to have pretty much saturated its market already. I'm not sure how much those stocks are going to increase. Of course, I also don't really know what I'm talking about. A
ReplyDeleteYeah I'm kind of with Ethan here. What if a bunch of people go into this, only to watch the Facebook craze die down? Myspace used to be the same way and I don't know anyone who has a Myspace still. A
ReplyDeleteIf I had the money, I would definitely take part in buying Facebook stock. I believe doing so would benefit greatly in the short-term. Facebook has had so much buzz for the past couple of years that I think it should carry on for at least 3-4 more years. I say buying Facebook stock has a short-term benefit, because just as facebook was to myspace, there will always be a next best thing. Apple does this well also, as they come out with something new every six months it seems like. I can see in 3-4 years, a new social networking fad coming around, which will be the end of facebook. Until then however, investing in facebook while its hot is a smart thing to do. (E,A)
ReplyDeleteI've always wondered this..
ReplyDeleteWhen a company goes public, what happens to the Class A stock?
and what if the employees end up selling?
...Q?
I really wish that our country was focused on issues greater than Facebook. Sure Facebook Stock is going to be big on Wallstreet, but is it really what we need to be putting time and thought into? What about scarcity issues that really hit home like scarcity of school funding due to state budget cuts?
ReplyDeleteI think it might be risky to spend large amount of money on Facebook...People's interest on this kind of things shifts fast and it has already been popular for a long time. But anyway I'm curious about how things will be like if the site really goes to public. A
ReplyDeleteFacebook might be a good short term investment if it goes public but I tend to agree with some of the other comments that Facebook isn't going to stay popular forever. Newer and better social networking programs are bound to be created in the future. Aside from that I'm pretty amazed at how valuable Facebook is estimated to be when it really isn't providing anything terribly important.
ReplyDeleteI agree with what's already been said about the potential longevity of Facebook. Popular as it is now, I doubt it will stay popular forever. Seeing my parents, and even grandparents, joining Facebook makes me wonder how long until our generation leaves Facebook in search of a newer form of social networking.
ReplyDeleteSince Facebook became the main social network site and mostly everyone knows what Facebook is, to a company that owns part of it would mean that they are part of what people are interested now a days. Of course like many of you have said “Facebook is not going to be popular forever, newer social networking sites are going to appear and they are going to overlap Facebook; just as Facebook overlapped Myspace.” Myspace used to be the main social networking site and now it’s all about Facebook. A
ReplyDeleteI am unsure about how successful Facebook will be in the future. Myspace, Xanga, and Livejournal have all waned in existence since Facebook came about. But like those sites, will Facebook have the same fate?
ReplyDeleteI think that since technology is becoming the primary way of communication, Facebook will only prosper, and hopefully boost the economy.
However, I also agree with Hannah in that we should be worrying and investing our money and energy into more significant parts of society.
Everyone wants a piece of the "facebook pie." Facebook has been all the hype since 2004 and still standing strong in 2010.This may be a good investment however,there is always the risk that it may lose its popularity now that twitter has entered the social networking realm as of 2009. While everybody wants to invest in facebook stock, the demand being greater than the supply, I wonder if this is a good investment. It is a competitive market out there in facebook land that many people are trying to get their hands in but will it be the right decision in the end. A
ReplyDeletei think facebook might be a good short term investment, but unsure about what will it be in the future.
ReplyDeleteIt is also a kind of investment of technology thinkgs, according to people are getting more and more familiar with those things nowadays, thinking about many people wants to invest in facebook stock, it might booste the economy in some way. A
Although many have already placed in their bid against the longevity of Facebook, I find myself disagreeing. It is my belief that the social networking site has found a niche and setup a particular network that remains balanced in the public's eye. The prominence of older generations jumping on the bandwagon is evidence of this, such a demographic tends to steer clear of flash in the pan fads of younger generations, but yet we see them entering in droves towards this phenomenon.This can be seen in Facebook's comparison to other social networking sites.
ReplyDeleteThe site allows personalization without the annoyances and instablilty that resulted from the Myspace customization. So far as it stands today it is more prevalent and relevant to social networking than Twitter, as it contains twitters main function within the site already and already has a much larger public base than the oddly specific (in terms of function) website. And with the additions of Facebook games, it allows easier and more carefree interaction between individuals, even the older generations, who find these games easily accessible and still fun to play. I think that Facebook might be slightly more stable than most give it credit for. If it wasn't there wouldn't be such a mad dash to quire stock in a company that hasn't even announced an IPO yet. Demand for a stock, signifies a public belief that a company is not only viable but profitable, and most importantly, stable enough for investment. Personally I would wait until this initial frenzy dies down and see where the company stands at that point.
However I would also wonder, how going public would effect the company and whether the move towards a public offering is actually beneficiary, or would it bring instability. With an IPO comes demand for growth and higher and higher quarterly statements, something that would force innovation from the Facebook team. Forced growth and expansion will most likely not be as well thought out as it could be in a private company where the decisions made behind expansion are based sole upon those who have seen the company grow from the ground up. It would be my assumption that these individuals would be more fit to lead in a company with such an original path and unfounded opportunities. As it has been said before, there is no other public social networking site, Facebook finds itself in unexplored territory.
On the pro-public side, it would offer the company a much wider reach of capital, and innovation. It would inherently be easier to make larger expansions in the company but at higher risk than before.
It should be watch, the progress of this company. Facebook find's itself in a unique position.
As someone who has paid close attention to tech matters for some time now, I certainly see Facebook as a solid investment. Facebook emerged to dominate the potential user-base at just the right time. Its success can be compared to that of Microsoft Windows: though far from perfect, it provides a solid product for users that has become to be expected as the default (though it makes its money through the sale of the treasure trove of information it collects to any company interested in data mining). Its future is bright.
ReplyDeleteI do certainly agree with Hannah about the priorities of the market actors and observers, but such is the reality of post-industrial capitalism.
(A, E)
I wouldn't buy Facebook simply based on history. 3-4 years ago Myspace was more popular than Facebook, but all of a sudden people grew sick of Myspace and switched to Facebook. Facebook is beginning to get more My-spacey every day, and I really believe that Facebook activity will begin to decrease. But where will people go for their social networking needs when they grow tired of Facebook? Twitter! It happened from Myspace to Facebook, and I think the next great social networking migration will be from Facebook to Twitter. Put Twitter on the market, I'll buy it in a second.
ReplyDeleteI read an article in high school that stated Bill Gates bought a little over a percent of facebook for millions which made his estimate of the company value over hundreds of millions of dollars. This might be a good stock...
ReplyDeleteI feel that having Facebook become public will create an extreme beneficial advantage to those who invest in it. Over the few years that it has been around, facebook has become the most popular sites on the internet. There actually seem to be more people who have them than those who don't. Speaking from my first hand experience with the website, it is very addictive. Having this knowledge also leads me to say that whoever decides to buy a share an invest in this organization will be very happy with the results.
ReplyDeleteI guess I just don't understand the concept of stocks very well. What happens with the money from shareholders? If Facebook is a free service then what is the point in buying stock? Is it just for the advertisements?
ReplyDeleteJason Merrit had an interesting comment on whether or not Facebook will still be the main social networking site in 10 years or whether it will fade away like MySpace.
ReplyDeleteI'm willing to bet that Facebook will still be going strong 10 years from now. It differs from MySpace in that EVERYTHING and EVERYONE is on Facebook. Small businesses, big businesses, musicians, all the well-known brands, actors, producers, publicists, the list goes on forever. Plus, Facebook provides a degree of interaction we really haven't seen before.
As a people, we tend to invent things and then become dependent on it, from transportation to cell phones. I really think we're starting to depend on Facebook. I'm positive that it'll still be around when we reach the next decade.
If facebook were to be sold I feel that its business platform would change dramatically. It would only take someone or some company to purchase it and charge money for it and so on. Therefore it can be said that there can be no guarantee for how long it would stay the same or if would remain popular under new leadership.
ReplyDelete