Peter Schiff on facebook and he is totally right!

I forgot the trader's name to give him credit for the quote, but he told cnbc this morning, " after this Facebook mess, you can pretty much kiss the average retail investor goodbye." I happen to agree. Sad...
 
lol, there must be about 58,232 other users who on ANY given day declare the best times for FB to be overs. Get into the queue and relax, nobody is copying from you, mate. ;-)


Quote from S2007S:

I think Peter Schiff is reading my posts, he said the same thing I said a few days ago about how the best days of facebook are behind it, he is 1000% correct on that, and the reason is simple, there are about 7 billion people in the world, about 2.3 Billion are connected to the internet and out of those many people 900+ million are on facebook...does that make sense now or do some fools in here still need math 101 to comprehend that the huge growth days for facebook are over. The only people who made the money off this ipo and company again were those buying on the secondary market years back when it was trading at just a few dollars a share. Of course those who were able to participate in the secondary market arent your regular mom and dad or friend, they were people with lots of money. So most of the money has already been made on facebook. Facebook from 2004 to the day of the ipo had its biggest growth ever, it will NEVER, NEVER have that same growth ever again. That kind of growth is over.


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Less than a week after Facebook's (FB) IPO there are already rumors that Facebook is considering a move from the Nasdaq (NDAQ) to the NYSE (NYX). According to Peter Schiff of Euro Pacific Capital, switching exchanges will accomplish nothing for Facebook.

"The problem isn't where it's listed—it's the valuation!" says the author of The Real Crash.

Though valued like a growth company, Schiff thinks Facebook's best days are behind it. "How many people on earth are members? It's not like there's that much opportunity to grow." For the record, there are roughly 6.8 billion people on earth, 901 million of whom have Facebook accounts.

Schiff says Facebook is only the latest example of a flawed system. He blames the regulators, not because there are too few rules, but because there are way too many. The high cost of jumping through regulatory hoops means only more mature, expensive companies can afford to go public. Up until then, the only people invested in a company were Venture Capitalists, Private Equity, and assorted well-connected, well-heeled individuals.

Those lucky few are using the IPO as a chance to cash out to the public. "By the time the average American gets a shot at all, the upside is gone," says Schiff.

In the case of Facebook, the little guys may have gotten doubly hosed. During the road show, the underwriters reportedly lowered earnings estimates prior to the IPO, then only disseminated the news to select institutions and clients.

The specifics of Facebook are different, but in the larger picture Schiff says the Facebook IPO is no different than any other offering. The insiders who are selling know the company is ripe to be sold while the outsiders wager on better days.

Schiff says of the average IPO investor: "You're betting on the come but meanwhile you're paying through the nose." That's not a recipe for investing success.
More...
 
now that I would strongly agree with. Does anyone know what the top 5 IT companies were 20 years ago? I do not out of the top of my head.

Quote from S2007S:

I hope he was being sarcastic because 9 billion will NEVER happen, maybe 1 billion but 9 Billion haha.

20 years from now no one will know what facebook is.
More...
 
concur, adding, however, that AMZN has built itself into a very stable business built on real products and not advertisement dollars that may vanish overnight. They very aggressively push into the publishing and editing business as well, way to go... Microsoft's margins are not too impressive either but both companies have in common that they are a near monopolists in their respective fields which can by far not be said of FB. FB is not even allowed to do business in the most populous country of the world. Products such as FB's are highly volatile and very hard to price, simply because changing regulations can easily shut a 100 million users out of the site overnight.

Btw, Netflix comes to mind when thinking of failed business models. I was smirking when I read in the middle of 2009 a message by the CEO during an earnings call: "The company doesn’t believe that a streaming-only subscription would drive as big a shift away from DVDs as people think". Lol, thats as if Amazon said in 2009 that cloud services are not really something people look at. Easy of course to muse in hindsight but I remember when I got my first media streamer in 2008 that I knew right away I could soon toss my DVD player away for good.

By the way, regarding Amazon vs brick and mortar book shops,
here one of the coolest book shops I have been, central Tokyo, imho the only way for such stores to survive is to turn them into social meeting hubs:

http://www.japantrends.com/retail-innovation-daikanyama-t-site/




Quote from atticus:

Schiff's impression of Captain Obvious. The entire space is littered with companies with a failed biz model. Look at AMZN at what, 170x earnings? They earn 1% net.

You know the Keynes cliche is coming... the market can remain irrational longer than you can remain solvent. AMZN has been >$200 for over a year.
More...
 
The Californian company and banks, including Morgan Stanley and Goldman Sachs, are accused of failing to let all potential investors know that the banks had cut their revenue estimates for Facebook in advance of the shares launch.

http://www.telegraph.co.uk/technolo...acebook-sued-by-investors-over-flotation.html

Pump and dump internet ipo scamming for billions $ , investors duped in wall street's thieving scams.

They get fund management fees to lumber your funds with dot com fraudulent toilet paper called shares.That is why you invest in pension funds.
 
Quote from S2007S:

I think Peter Schiff is reading my posts, he said the same thing I said a few days ago about how the best days of facebook are behind it, he is 1000% correct on that, and the reason is simple, there are about 7 billion people in the world, about 2.3 Billion are connected to the internet and out of those many people 900+ million are on facebook...does that make sense now or do some fools in here still need math 101 to comprehend that the huge growth days for facebook are over. The only people who made the money off this ipo and company again were those buying on the secondary market years back when it was trading at just a few dollars a share. Of course those who were able to participate in the secondary market arent your regular mom and dad or friend, they were people with lots of money. So most of the money has already been made on facebook. Facebook from 2004 to the day of the ipo had its biggest growth ever, it will NEVER, NEVER have that same growth ever again. That kind of growth is over.


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Less than a week after Facebook's (FB) IPO there are already rumors that Facebook is considering a move from the Nasdaq (NDAQ) to the NYSE (NYX). According to Peter Schiff of Euro Pacific Capital, switching exchanges will accomplish nothing for Facebook.

"The problem isn't where it's listed—it's the valuation!" says the author of The Real Crash.

Though valued like a growth company, Schiff thinks Facebook's best days are behind it. "How many people on earth are members? It's not like there's that much opportunity to grow." For the record, there are roughly 6.8 billion people on earth, 901 million of whom have Facebook accounts.

Schiff says Facebook is only the latest example of a flawed system. He blames the regulators, not because there are too few rules, but because there are way too many. The high cost of jumping through regulatory hoops means only more mature, expensive companies can afford to go public. Up until then, the only people invested in a company were Venture Capitalists, Private Equity, and assorted well-connected, well-heeled individuals.

Those lucky few are using the IPO as a chance to cash out to the public. "By the time the average American gets a shot at all, the upside is gone," says Schiff.

In the case of Facebook, the little guys may have gotten doubly hosed. During the road show, the underwriters reportedly lowered earnings estimates prior to the IPO, then only disseminated the news to select institutions and clients.

The specifics of Facebook are different, but in the larger picture Schiff says the Facebook IPO is no different than any other offering. The insiders who are selling know the company is ripe to be sold while the outsiders wager on better days.

Schiff says of the average IPO investor: "You're betting on the come but meanwhile you're paying through the nose." That's not a recipe for investing success.
More...

The stock price doesn't care how many users facebook has, it only cares about how much earnings it has. So you're right, the growth rate for users is bound to slow, but it has yet to tap in to the profit potential of the users it already has. Assume it makes $5 per user per year, if in the future the raise that to $20 per user per year, even with the same amount of users their profits quadruple.

I think the biggest advantage a place like facebook has is the information angle. Just imagine if you're a car company and can advertise to only people currently looking to buy a car. Imagine you are Tide and can only advertise to moms or single dads who buy laundry detergent. On TV the advertisement goes out to everyone, but if you could find the specific people looking to buy your type of product and advertise to them specifically, how much more efficient your advertising dollars would be spent.

Facebook may be the only company on the planet which has the potential to data mine on such a broad scale. People reveal their entire lives on facebook for the world to see. FAcebook has all this information on their servers. Imagine if they can create data mining tools to figure out who are the 2 million people currently looking to buy cars. Those are as good as leads. In the private market, some leads can go for $50 a piece (i know SEO leads go for that much at times). You can sell the information of all these people looking to buy cars to their local car dealerships, and they would have salesmen contact them. this is just one example.

I'm not saying that i would invest in facebook as the valuation is rich. However, the profit potential for facebook may be higher than any other IT company on the planet at the current time.
 
Quote from atticus:

We know you're long. My suggestion is to cover on a touch of $34.
More...

Don't have a position yet actually. Still watching.
Just don't think it's a black & white 100% Bearish situation.
So I wouldn't write them off just yet.
They have all that money, all those customers (+ potential customers), and all that brain power behind them.
All they need is 1 or 2 ideas to monetize with, and off it goes....
Let FB fall to 20 first, and then start climbing next year. Doesn't matter longer term.
Volume keeps going down. Not collapsing....
:)
 

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