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a) Many of the 900 million members are under the age of 16, and have virtually 0 buying power.
b) Most of the adults who use Facebook, hate it.
c) They've already seen declines in quarter over quarter results.
It seems like the IPO was a fine move to "get paid". I see nothing wrong with "getting paid" for the work you've done, and the work Facebook has done up until now is worth some money. But not 100 billion. The IPO was valued at 16 billion, OK fine I am not sure how many employees get a piece of that. But good job for them to raise those funds in an IPO.
But 100 billion valuation for the company as a whole is where the problem lies. I think a lot of people are assuming Facebook is like Apple, and will continuously launch new and innovating products, which would keep their value high. But I see no evidence of this. They do not seem well diversified, and they have huge concerns with privacy that can turn against them practically overnight.
It is a shame that Google+ is a ghost town, from what I understand. Google is probably one of the view companies currently in existence that could compete with Facebook. But Google+ is a failure. I am not sure if this bodes well, or poorly, for Facebook.
I've been following FB and decided to throw up some analysis for you guys. Basically, the 1 day moving average is trending down and it has closed below its 2 day moving average for the first time in, ever, and the RSI(2) has fallen below 50 and Macd(1,2,1) has fallen below 0. So, it's obviously oversold and I am expecting a nice pop here, and using the fib projection tool, the 610,000% fib line is showing a future closing price in the neighborhood of $24,217. Take a look at my chart, I'd be happy to answer any questions.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Okay, here is a view on this FB bologna. 2,140,000,000 shares earn $.31 each? Are the FB earnings about $663,400,000? Does FB have about 900,000,000 users? If those numbers are even close we see that FB earns about $.74 per user.
So if they had a tangible product that everyone loved...say lemonade they might be onto something. BUT to trade at a reasonable multiple...say the same as goog (18.57 times) they need roughly 4.5 Billion users at 31 cents per....or they need to earn about $1.55 per share at current efficiency that is $3.70 per each of the 900,000,000. If that does not seem like much, lets go back to lemonade.
My children make more than $.75 per user at their lemonade stand.
So, send my kids your money, we will offer 100 shares and we will beat FB from my driveway working 12 hrs per week...and if the kids add ice water and cookies to their product line...look out, we will do a non dilutive secondary by 4th of July.
I think the selling group must have been passing the hookah instead of doing their HW on this. The only people to make money here is the UW group the selling group and insider sales into the public offering...Rock star Bono for example banked 1.5 B on this deal.
When the clue phone is ringing, pick up the call folks.
"Thomson Reuters Starmine, meanwhile, using expected growth rates of about 10.8 percent over the next decade, values the shares at $9.59, or less than one-third of its current price."