Support and connections? FB isn't looking for a job, it needs profits and revenues. No position either way, just remarking on the fact that I see lots of interest from casual investors. For a $63B website, plenty of air below.
shooting the moon
- Thread starter billyjoerob
- Start date
Znga had this to say on their conf call:
"Weâve all seen the cost of customer acquisition on a per installed basis on mobile build up substantially in the last year and I think analyst project that theyâll continue to go up, and so the value of that distribution and those efficiencies I think will continue to pay off and go up in the future.
Mark J. Pincus
And with respect to mobile acquisition cost or player acquisition cost, as Mark mentioned, we think it will get more competitive and we are seeing rates that are above what were normally seen in the web space."
Finding mobile game customers is a big business. IDT has Zedge, which is just starting to roll out game recs to its big user base (50m) of ringtones/wallpaper users. I don't have any idea if Zedge will succeed at that, but could be big.
"Weâve all seen the cost of customer acquisition on a per installed basis on mobile build up substantially in the last year and I think analyst project that theyâll continue to go up, and so the value of that distribution and those efficiencies I think will continue to pay off and go up in the future.
Mark J. Pincus
And with respect to mobile acquisition cost or player acquisition cost, as Mark mentioned, we think it will get more competitive and we are seeing rates that are above what were normally seen in the web space."
Finding mobile game customers is a big business. IDT has Zedge, which is just starting to roll out game recs to its big user base (50m) of ringtones/wallpaper users. I don't have any idea if Zedge will succeed at that, but could be big.
let me expand my observations :
based on what i have seen, every politician and celebrity is supporting fb this or the other way. Yes, it could be any other website but it is this one. And getting people to use fb exclusively costs money and connections. I can see daily adds for fb in AU. Presume elsewhere is the same. What kind ob budget can afford this ?
My view is that the marketing budget is not going from fb coffers but from somewhere else.
So it was chosen to be media young generation will use and will grow with them. So it will generate revenues and all sorts of other services way down the track.
One can assume any competitor will be shut down and not by forces of market, because investment was already too large.
i bet 2 russian programmers get together and come up with better site in a year but they do not.
That's an interesting theory, if I can understand you. It's kind of a sleepy stock at this point. Getting over the IPO price will be tough, path of least resistance may be south. Not much short interest. You might be able to buy it below $10 if sentiment switches.
Maybe the four of five occasional web surfers who reach this thread by accident might be interested in this, if they happen to be searching for something about Warren Buffett.
One thing to keep in mind about Buffett (and I've read many of the biographies and most of his annual reports, etc) is that he sees a stock as a bond. Just as a bond has principal, coupon and reinvestment rate, the same is true of stocks. The principal of the bond is equivalent to the book value or liquidation value, I suppose. The coupon is the income stream, the free cash flow. And the reinvestment rate is the incremental ROI. Of the three, the third is the most important, both for stocks and bonds. According to Buffett, stocks should earn a higher return than a company's corporate bonds. If the investment is a utility, and the utility sells bonds for at 8%, then the stock should yield at least 10% or more. If you read Buffetology, written by a daughter-in-law (Buffett disowned the children after the divorce), Buffett usually aims for a yield of 16%, or did before he got so big.
That's the income yield he targets, but he's not interested in what he calls "savings account" businesses, in which a dollar on the balance sheet is worth a dollar. Instead, he invests in business that reinvest a dollar at such a high rate that a dollar is worth $2. These are what he calls "compounders." If the reinvestment rate is 20%, then a dollar reinvested in the business is worth at least $2.
We can see how this understand of stocks influended his approach to investing. Buffett's three principles of investing were
a) take advantage of Mr. Market - wait until he offers at least 16% yield. There is no opportunity cost to waiting.
b) stocks are pieces of business, ie they are streams of income with reinvestment rates, or quasi bonds
c) maintain a margin of safety - losses also compound.
One thing to keep in mind about Buffett (and I've read many of the biographies and most of his annual reports, etc) is that he sees a stock as a bond. Just as a bond has principal, coupon and reinvestment rate, the same is true of stocks. The principal of the bond is equivalent to the book value or liquidation value, I suppose. The coupon is the income stream, the free cash flow. And the reinvestment rate is the incremental ROI. Of the three, the third is the most important, both for stocks and bonds. According to Buffett, stocks should earn a higher return than a company's corporate bonds. If the investment is a utility, and the utility sells bonds for at 8%, then the stock should yield at least 10% or more. If you read Buffetology, written by a daughter-in-law (Buffett disowned the children after the divorce), Buffett usually aims for a yield of 16%, or did before he got so big.
That's the income yield he targets, but he's not interested in what he calls "savings account" businesses, in which a dollar on the balance sheet is worth a dollar. Instead, he invests in business that reinvest a dollar at such a high rate that a dollar is worth $2. These are what he calls "compounders." If the reinvestment rate is 20%, then a dollar reinvested in the business is worth at least $2.
We can see how this understand of stocks influended his approach to investing. Buffett's three principles of investing were
a) take advantage of Mr. Market - wait until he offers at least 16% yield. There is no opportunity cost to waiting.
b) stocks are pieces of business, ie they are streams of income with reinvestment rates, or quasi bonds
c) maintain a margin of safety - losses also compound.
Based on reading some of his biographies, I would say there are two things about Buffett that are distinctive, and related:
a) very deep sense of justice. He believes that justice will be rewarded, eventually. The stock market to him a justice machine that rewards the righteous. As long as he sticks to the narrow path, he will be rewarded.
b) aversion to uncertainty. He wants only sure things. Investment to most people means taking risk, and most people are fascinated by 50-50 propositions. Who will win the super bowl? Samsung or Apple? Google or Amazon? Unlike most of the rest of us, Buffett has no interest in anything that isn't a lock. He's looking to bet on whether the sun will rise tomorrow, not the winner of the OKC - Houston series. To Buffett, a stock like Coca-Cola is not at all risky, it is a safe bond in disguise. You can see this in his life too - he eats the same food and visits the same restaurant. The idea of eating sushi makes him physically ill. Variety is not the spice of his life.
In investing, nothing is more of a sure thing than a company buying its own shares. He was especially attracted to closed end funds selling at a discount. In fact he created his own fun-house-mirror closed end fund investment by buying shares of Blue Chip stamps at a discount, which owned shares of Berkshire, which also owned shares of itself via the insurance company. If each sells at a 20% discount, you can see how each discount compounds. He was buying 50c dollars by buying holding companies holding themselves. Munger did the same thing. He bought into a closed end fund (I think it was called the America Fund) and then put 30% of the fund assets IN THE SAME FUND. Compounding compounder compounds.
a) very deep sense of justice. He believes that justice will be rewarded, eventually. The stock market to him a justice machine that rewards the righteous. As long as he sticks to the narrow path, he will be rewarded.
b) aversion to uncertainty. He wants only sure things. Investment to most people means taking risk, and most people are fascinated by 50-50 propositions. Who will win the super bowl? Samsung or Apple? Google or Amazon? Unlike most of the rest of us, Buffett has no interest in anything that isn't a lock. He's looking to bet on whether the sun will rise tomorrow, not the winner of the OKC - Houston series. To Buffett, a stock like Coca-Cola is not at all risky, it is a safe bond in disguise. You can see this in his life too - he eats the same food and visits the same restaurant. The idea of eating sushi makes him physically ill. Variety is not the spice of his life.
In investing, nothing is more of a sure thing than a company buying its own shares. He was especially attracted to closed end funds selling at a discount. In fact he created his own fun-house-mirror closed end fund investment by buying shares of Blue Chip stamps at a discount, which owned shares of Berkshire, which also owned shares of itself via the insurance company. If each sells at a 20% discount, you can see how each discount compounds. He was buying 50c dollars by buying holding companies holding themselves. Munger did the same thing. He bought into a closed end fund (I think it was called the America Fund) and then put 30% of the fund assets IN THE SAME FUND. Compounding compounder compounds.
Another example of a closed end fund owning itself is Dan Loeb's Third Point Public, TPOU in London and TPNTF on the pink sheets. The funds owns 11% of its own shares, 5M of 45M shares. The NAV is currently $15.41 (fund price $13.20), so if we figure the shares were cancelled, then NAV would be 15.65, approximately.
Like ART, COWN is an asset management firm selling below cash. Cash and investments are at $3.75 roughly, and stock is at $2.56. The asset management business, with $8B of AUM, is worth at least $1.25. So $5. Most of investments are in prop capital, and earns quite high returns. There is a small bank, but it's much smaller than the AM biz and cash. Bank uses about $75M of capital.
http://stockcharts.com/h-sc/ui?s=COWN&p=W&b=5&g=0&id=p78100539066
COWN is not burning cash, though the earnings are hard to understand. It is losing money if stock compensation is included, but the company buys back more stock at below book, so it's a wash.
Anyway, good risk reward here. Buying before earnings is often a bad idea, but here the downside is low with $1.25 cash cushion. $3 has been the ceiling for last 19 months. Earnings are on Fri morning.
http://stockcharts.com/h-sc/ui?s=COWN&p=W&b=5&g=0&id=p78100539066
COWN is not burning cash, though the earnings are hard to understand. It is losing money if stock compensation is included, but the company buys back more stock at below book, so it's a wash.
Anyway, good risk reward here. Buying before earnings is often a bad idea, but here the downside is low with $1.25 cash cushion. $3 has been the ceiling for last 19 months. Earnings are on Fri morning.
Well, looks like I was wrong about FB, at least for now. Good thing I didn't have a position.