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(CNBC)   Zynga, Pandora, Groupon, and Facebook have lost investors a combined $39 billion. Who would have thought businesses based on spending real money for fake things would have been bad bets?   (cnbc.com) divider line 63
    More: Obvious, Groupon, Zynga, Facebook, TD Ameritrade, Capital Group, CRT, Sundays at 6a ETQuestions, investors  
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1370 clicks; posted to Business » on 27 Jul 2012 at 12:25 PM (3 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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jmf
2012-07-27 09:50:37 AM  
Bit coin is where it's at. Fake money for real things.
 
2012-07-27 09:54:18 AM  

jmf: Bit coin is where it's at. Fake money for real things.


My lot is in with Whuffie. Social capital for ALL the things!
 
2012-07-27 10:32:27 AM  
Seems to work for "World of Warcraft."
 
2012-07-27 11:07:08 AM  
Well, Pandora is actually a really cool thing, which sort of distinguishes it from the other three.
 
2012-07-27 11:26:50 AM  
People spend real money for fake things on Pandora?

How are the investors in TotalFark doing?
 
2012-07-27 11:31:12 AM  

FishyFred: jmf: Bit coin is where it's at. Fake money for real things.

My lot is in with Whuffie. Social capital for ALL the things!


I'm so glad nobody's tried to make that a real thing. Ah crap.
 
2012-07-27 12:34:08 PM  

Pocket Ninja: Well, Pandora is actually a really cool thing, which sort of distinguishes it from the other three.


This. Unless they vanish, they offer a service that is useful, and pleasing. They also have reminded me I'd rather skip a song I don't like and hear a commercial, than hear a song I don't like.
 
2012-07-27 12:43:00 PM  
Dammit. Anyone want to buy a few carbon credits?
 
2012-07-27 12:43:04 PM  
Every single CD or DVD/Blueray that you have ever bought is just virtual property. so.
 
2012-07-27 12:43:23 PM  

jmf: Bit coin is where it's at. Fake money for real things.


I put all my money into biatch coins; real money for fake money for real biatches.
 
2012-07-27 12:45:28 PM  
And yet, of the 24 firms that cover the Zynga, only two have a "sell" rating, and nine have "buys," and that includes today's downgrades from JPMorgan and Goldman. (Thanks for the early heads up).

Does anyone care about analysts?
 
2012-07-27 12:47:52 PM  

Rapmaster2000: And yet, of the 24 firms that cover the Zynga, only two have a "sell" rating, and nine have "buys," and that includes today's downgrades from JPMorgan and Goldman. (Thanks for the early heads up).

Does anyone care about analysts?


It makes sense. Zynga will likely be bought out by Facebook soon for a price somewhat higher than it sits right now, so buy in to make a quick profit.
 
2012-07-27 12:53:29 PM  
Pandora can't make money selling $40 beads?
 
2012-07-27 12:54:41 PM  
Headlines like this irritate the hell out of me. Yes, a specific group of investors when taken selectively for a time frame lost $39 billion. It is however a two-sided market - another group of investors gained $39 billion off of exactly the same situation.

Given the fairly rigorous standards most brokerage firms have for IPO investors its not exactly Joe the Plumber losing his shorts on his $20K IRA either.
 
2012-07-27 01:04:25 PM  
FLOOZ IS THE FUTURE OF CURRENCY!
 
2012-07-27 01:05:57 PM  

ikapoz: Headlines like this irritate the hell out of me. Yes, a specific group of investors when taken selectively for a time frame lost $39 billion. It is however a two-sided market - another group of investors gained $39 billion off of exactly the same situation.

Given the fairly rigorous standards most brokerage firms have for IPO investors its not exactly Joe the Plumber losing his shorts on his $20K IRA either.


Except thatthe stock market isn't zero sum. Unless there were short positions equal to the total value of those stocks (unlikely), then there was a net loss
 
2012-07-27 01:11:56 PM  
So now we're calling services "fake things"?

If you think that the reason Facebook and Groupon and Zynga are collapsing is because they sell "fake things", you're probably dumb enough to be one of the people who invested in them in the first place.
 
2012-07-27 01:14:07 PM  

Hot Carl To Go: Dammit. Anyone want to buy a few carbon credits?


Not when I can just steal them.
 
2012-07-27 01:14:48 PM  
Key word there is "investors". They put their money into something on the expectation it would make them more money. In all of these cases there was ZERO rational basis to assume that would happen. Anyone who voluntarily invested in these cotton-candy dream machines got what they deserved.
 
2012-07-27 01:16:37 PM  

Vegan Meat Popsicle: So now we're calling services "fake things"?

If you think that the reason Facebook and Groupon and Zynga are collapsing is because they sell "fake things", you're probably dumb enough to be one of the people who invested in them in the first place.


I don't know, is a fake tractor in a video game a service?
 
2012-07-27 01:22:32 PM  

Russky: Vegan Meat Popsicle: So now we're calling services "fake things"?

If you think that the reason Facebook and Groupon and Zynga are collapsing is because they sell "fake things", you're probably dumb enough to be one of the people who invested in them in the first place.

I don't know, is a fake tractor in a video game a service?


For your fake farmer it sure is.

But yeah, I would say the service is the "enhanced" game play.
 
2012-07-27 01:22:43 PM  

neon_god: ikapoz: Headlines like this irritate the hell out of me. Yes, a specific group of investors when taken selectively for a time frame lost $39 billion. It is however a two-sided market - another group of investors gained $39 billion off of exactly the same situation.

Given the fairly rigorous standards most brokerage firms have for IPO investors its not exactly Joe the Plumber losing his shorts on his $20K IRA either.

Except thatthe stock market isn't zero sum. Unless there were short positions equal to the total value of those stocks (unlikely), then there was a net loss


True, but if you are going to measure a loss from the IPO (the high water mark for at least some of those companies' price), those dollars did not disappear -- they are owned by the company that made the offering. It was a misnomer for me to refer to them as "investors", but they were definitely on the "winning" side of the trade.
 
2012-07-27 01:27:12 PM  

HotWingConspiracy: Russky: Vegan Meat Popsicle: So now we're calling services "fake things"?

If you think that the reason Facebook and Groupon and Zynga are collapsing is because they sell "fake things", you're probably dumb enough to be one of the people who invested in them in the first place.

I don't know, is a fake tractor in a video game a service?

For your fake farmer it sure is.

But yeah, I would say the service is the "enhanced" game play.


I suppose, I think it's inevitable that people will stop putting so much money into those kind of 'services'. That's just my own bias though i guess,
 
2012-07-27 01:29:44 PM  

Russky: HotWingConspiracy: Russky: Vegan Meat Popsicle: So now we're calling services "fake things"?

If you think that the reason Facebook and Groupon and Zynga are collapsing is because they sell "fake things", you're probably dumb enough to be one of the people who invested in them in the first place.

I don't know, is a fake tractor in a video game a service?

For your fake farmer it sure is.

But yeah, I would say the service is the "enhanced" game play.

I suppose, I think it's inevitable that people will stop putting so much money into those kind of 'services'. That's just my own bias though i guess,


I would agree, they don't innovate or switch things up enough to keep most people engaged. They just make a reskinned farmville and hope to snag a few more people.
 
2012-07-27 01:38:25 PM  
ikapoz:

True, but if you are going to measure a loss from the IPO (the high water mark for at least some of those companies' price), those dollars did not disappear -- they are owned by the company that made the offering. It was a misnomer for me to refer to them as "investors", but they were definitely on the "winning" side of the trade.

Yes, but he fact remains that when share prices fall, wealth is destroyed, which is the point here. The company doesn't care what it's stock does until the next time.it has to finance.
 
2012-07-27 01:49:21 PM  
Subby doesn't quite seem to grasp service economy.
 
2012-07-27 02:26:16 PM  

ikapoz: Headlines like this irritate the hell out of me. Yes, a specific group of investors when taken selectively for a time frame lost $39 billion. It is however a two-sided market - another group of investors gained $39 billion off of exactly the same situation.

Given the fairly rigorous standards most brokerage firms have for IPO investors its not exactly Joe the Plumber losing his shorts on his $20K IRA either.


Could you please explain this to me? A group of investors buy stock for let's say 100 billion. The company profits from the ipo are 100 billion. The stock drops lets say 39 billion. Now the investors have lost 39 billion and their stock is worth 61 billion if they sell it. The group of investors that bought it now have stock worth 61 billion What group of investors made 39 billion?
 
2012-07-27 02:37:41 PM  
This is the new business model in the silicon valley. Build a website that doesn't sell anything, attract a lot of attention, run an IPO, and pay yourself huge salaries and bonuses out of the investor money before declaring bankruptcy.
 
2012-07-27 02:54:40 PM  
If I shorted, I would've shorted these. But I'm a buy and hold guy, so I don't usually go near IPOs for that reason.
 
2012-07-27 03:02:08 PM  

verbaltoxin: If I shorted, I would've shorted these. But I'm a buy and hold guy, so I don't usually go near IPOs for that reason.


Funny enough, I had been thinking that Facebook would be a good buy if it got down to about $20. But I didn't think it would actually get there. Now? It might get there. Hell, it might go lower. The most surprising thing to me has been how quickly confidence in the company has been shaken.
 
2012-07-27 03:04:04 PM  

FishyFred: verbaltoxin: If I shorted, I would've shorted these. But I'm a buy and hold guy, so I don't usually go near IPOs for that reason.

Funny enough, I had been thinking that Facebook would be a good buy if it got down to about $20. But I didn't think it would actually get there. Now? It might get there. Hell, it might go lower. The most surprising thing to me has been how quickly confidence in the company has been shaken.


I think that's just the market being the market (Read: irrational and prone to overdoing it). In a few years Facebook might be somewhat close to being considered a blue chip stock. But for now, I'll put my money in trustier companies.
 
2012-07-27 03:07:43 PM  
CMYK and PMS

The ones that sold the stock causing it to lose 39 billion.
 
2012-07-27 03:24:31 PM  
I'm still waiting for the Google bubble to pop when everybody realizes that the majority of google employees are simply clicking on pay-per-click ads all day generating billions of dollars.
 
2012-07-27 03:35:26 PM  
Short squeeze happening in GRPN right now. Up 15% today.

/still goes bankrupt, IMHO
 
2012-07-27 03:39:00 PM  

verbaltoxin: If I shorted, I would've shorted these. But I'm a buy and hold guy, so I don't usually go near IPOs for that reason.


I sort of shorted facebook. I have a bet with a guy that we made on ipo day that it would hit $20 at some point within the first year. When the insiders blocks get set loose next month after the lock up period I expect I'll be collecting that dollar.
 
2012-07-27 03:44:02 PM  

JohnBigBootay: I sort of shorted facebook. I have a bet with a guy that we made on ipo day that it would hit $20 at some point within the first year. When the insiders blocks get set loose next month after the lock up period I expect I'll be collecting that dollar.


i50.tinypic.com

Which one are you?
 
2012-07-27 04:25:29 PM  

Tommy Moo: This is the new business model in the silicon valley. Build a website that doesn't sell anything, attract a lot of attention, run an IPO, and pay yourself huge salaries and bonuses out of the investor money before declaring bankruptcy.


Sounds a lot like the old business model.
 
2012-07-27 04:39:18 PM  
Fark Pandora. 3rd party apps on WP work better than their own apps on iOS and Android
/Pretty sure 3rd party apps for Android works better than their(Pandora) shiat also
 
2012-07-27 04:52:26 PM  

icebergcomics: I'm still waiting for the Google bubble to pop when everybody realizes that the majority of google employees are simply clicking on pay-per-click ads all day generating billions of dollars.


I plan on buying Google before their announcement that they have unified with the collective human consciousness. Google Mind.
 
2012-07-27 04:55:09 PM  

FishyFred: JohnBigBootay: I sort of shorted facebook. I have a bet with a guy that we made on ipo day that it would hit $20 at some point within the first year. When the insiders blocks get set loose next month after the lock up period I expect I'll be collecting that dollar.

[i50.tinypic.com image 850x478]

Which one are you?


Eddie Murphy.
 
2012-07-27 05:05:07 PM  

JohnBigBootay: FishyFred: JohnBigBootay: I sort of shorted facebook. I have a bet with a guy that we made on ipo day that it would hit $20 at some point within the first year. When the insiders blocks get set loose next month after the lock up period I expect I'll be collecting that dollar.

[i50.tinypic.com image 850x478]

Which one are you?

Eddie Murphy.


Eddie Murphy! Fark you!
 
2012-07-27 05:29:57 PM  

Tommy Moo: This is the new business model in the silicon valley. Build a website that doesn't sell anything, attract a lot of attention, run an IPO, and pay yourself huge salaries and bonuses out of the investor money before declaring bankruptcy.


Eh, did you forget about the first Dot Com bubble? Pump and dump was a way of life.
 
2012-07-27 06:20:52 PM  
I'm going to create a kickstarter that will help me raise capital to buy up a majority in kickstarter when it gets a IPO.
 
2012-07-27 06:30:43 PM  

Pocket Ninja: Well, Pandora is actually a really cool thing, which sort of distinguishes it from the other three.


Yeah, but the only thing that distinguishes it from other internet radio services like Spotify and Slacker is how much their service sucks balls in comparison.
 
2012-07-27 06:33:55 PM  
media.lehighvalleylive.com
 
2012-07-27 09:11:15 PM  

Russky: I suppose, I think it's inevitable that people will stop putting so much money into those kind of 'services'. That's just my own bias though i guess,


Zynga just does it wrong. Consider something like Pocket Legends on the iOS and Android. You play for free, but if you want to play elite content, you have to buy it. You can also buy the once-and-done type things like potions that enhance your character.

Pocket Legends combines lasting material value and one-shot enhancement mini purchases. That's a good model.

They're just selling entertainment. Buying a $10 movie ticket to watch Batman kick Bane's ass for 3 hours isn't fundamentally different from paying for a chunk of video game content that lasts 3 hours and investors that fail to realize that are going to eventually miss out on the company that gets the formula right. Just because Zynga and Facebook haven't figured it out doesn't mean it isn't a good idea.
 
2012-07-27 11:09:05 PM  
Blizzard seems to be doing pretty well with the "spend real money for fake things" business model.
 
2012-07-28 12:25:27 AM  

ikapoz: Headlines like this irritate the hell out of me. Yes, a specific group of investors when taken selectively for a time frame lost $39 billion. It is however a two-sided market - another group of investors gained $39 billion off of exactly the same situation



No, they didn't.

1,000 people buy 1,000 shares each at $1,000. The paper value of that stock is $1,000/share, so each investor has $1,000,000 in paper equity. The entire company is valued at $1,000,000,000.
The next day, one person sells their shares for $750. They cash out at $750,000. The people who bought those shares have broken even. The other 999 people who bought their shares at $1,000 have lost $250,000 in equity at that point. The company as a whole lost $250,000,000 in perceived value. None of that paper equity went anywhere.
 
2012-07-28 12:33:57 AM  

Cybernetic: Blizzard seems to be doing pretty well with the "spend real money for fake things" business model.


The difference is that World of Warcraft is a more engaging experience. Yeah, it's not the casual "everyone can pick up and play for a few minutes mindlessly" game that has a wide appeal, but it focuses on the more substantial gameplay that keeps people coming back and hooks them to the point they're willing to keep spending money to keep going. So while the casual games end up dying out fairly quickly in their popularity due to boredom or oversaturation of clones, Blizzard and Valve will keep making money off WoW and Team Fortress 2, respectively.

Plus, Blizzard's more diverse than Zynga in that Zynga only offers one type of game while Blizzard has Starcraft II and it's expansions to help boost the revenues.
 
2012-07-28 12:50:57 AM  

The_Y2P_Problem: Cybernetic: Blizzard seems to be doing pretty well with the "spend real money for fake things" business model.

The difference is that World of Warcraft is a more engaging experience.


He was talking about the Real Money Auction House of Diablo 3. Blizzard does not support trading real money for fake things in WoW.

"Willing to keep spending money to keep going" in WoW? You are aware that Chinese gold farmers are not an official part of the WoW infrastructure, aren't you? You are not merely paying to play a game - you are paying other people to play a game for you. If I wanted someone else to have fun with my money while I wasn't having fun, I'd get married.
 
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