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(Guardian)   Valuing a company at 34 times revenue is just good common sense, especially when it's never turned a profit   (theguardian.com) divider line 85
    More: Obvious, IPO, revenues, stock markets, restricted stock  
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3416 clicks; posted to Business » on 07 Nov 2013 at 1:33 PM (40 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-11-07 01:42:48 PM
When it flops like Facebook did, everyone is going to be "shocked"
 
2013-11-07 01:56:13 PM
"Markets can remain irrational a lot longer than you and I can remain solvent." - John Maynard Keynes
 
2013-11-07 02:03:17 PM

Drollia: When it flops like Facebook did, everyone is going to be "shocked"


Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.
 
2013-11-07 02:14:41 PM
I would short the fark out of that stock if I had any money.
 
2013-11-07 02:17:57 PM
I'll put em right next to my 80s baseball cards and 90s beaniebabies
 
2013-11-07 02:18:33 PM

Reverend J: I would short the fark out of that stock if I had any money.


Atomic Spunk: "Markets can remain irrational a lot longer than you and I can remain solvent." - John Maynard Keynes

 
2013-11-07 02:18:41 PM

van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.


You're missing the in between period where facebook was around 18$.

So just wait and buy twitter when it hits the trough.
 
2013-11-07 02:22:25 PM
All Twitter accounts are fake.
 
2013-11-07 02:25:12 PM
I wasn't aware that Twitter even had revenue.
 
2013-11-07 02:27:29 PM

vonmatrices: van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.

You're missing the in between period where facebook was around 18$.

So just wait and buy twitter when it hits the trough.



What on earth does that have to do with whether or not Facebook bombed.  It is a fact that the Facebook stock is 25% higher today than its IPO price.  That is a fantastic ROI for just over a year.
 
2013-11-07 02:29:17 PM
What kind of growth strategy do they have?

"Sign up for what will become a massive advertising platform. We also plan on selling your data. But you know, you can post bullshiat for strangers to read. Maybe you'll get on Gawker."
 
2013-11-07 02:34:41 PM

vonmatrices: van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.

You're missing the in between period where facebook was around 18$.

So just wait and buy twitter when it hits the trough.


That's my plan.  I have a couple grand just sitting around ready to go when it tanks.
 
2013-11-07 02:35:52 PM
It makes sense for Twitter.

Sure, the Facebook IPO was a failure for you the investor because you didn't get your initial bump, but FB got more than they were worth.  It was a huge win for them.

The more overvalued a company is at the IPO, the better a deal it is for that company.
 
2013-11-07 02:54:10 PM

van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price


And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.
 
2013-11-07 02:58:57 PM

Rapmaster2000: It makes sense for Twitter.

Sure, the Facebook IPO was a failure for you the investor because you didn't get your initial bump, but FB got more than they were worth.  It was a huge win for them.

The more overvalued a company is at the IPO, the better a deal it is for that company.


Which is the only point. These companies aren't trying to be companies, not like IBM and GE or anything like that -- they just want to cash out and make sure the angels and venture guys get their returns too. Going public isn't for the public, or the compnay, it's for the few dozen people with options that get to be millionaires now. Once the thing's public, who gives a shiat. See: Groupon.
 
2013-11-07 03:03:39 PM
The secret Twitter business plan is to take stock positions and then tweet rumors that make the automated trading systems go bananas. They'll make a killing.
 
2013-11-07 03:05:13 PM

Scrotastic Method: Which is the only point. These companies aren't trying to be companies, not like IBM and GE or anything like that -- they just want to cash out and make sure the angels and venture guys get their returns too. Going public isn't for the public, or the compnay, it's for the few dozen people with options that get to be millionaires now. Once the thing's public, who gives a shiat. See: Groupon.


Are you aware that the fundamental point of an IPO is to raise money? The whole point is to put shares of the company out there for the public to invest in which brings in money to fund growth. If you just want an initial kick then you're gambling against the fundamental point of the IPO and if you lose your ass when it doesn't happen that's you're own stupid fault.

If you don't think the company can grow with investment money.... don't give it any investment money.
 
2013-11-07 03:10:19 PM
Valuation is entirely dependent on how well you have greased your banker, and nothing else.
 
2013-11-07 03:45:59 PM

skozlaw: Scrotastic Method: Which is the only point. These companies aren't trying to be companies, not like IBM and GE or anything like that -- they just want to cash out and make sure the angels and venture guys get their returns too. Going public isn't for the public, or the compnay, it's for the few dozen people with options that get to be millionaires now. Once the thing's public, who gives a shiat. See: Groupon.

Are you aware that the fundamental point of an IPO is to raise money? The whole point is to put shares of the company out there for the public to invest in which brings in money to fund growth. If you just want an initial kick then you're gambling against the fundamental point of the IPO and if you lose your ass when it doesn't happen that's you're own stupid fault.

If you don't think the company can grow with investment money.... don't give it any investment money.


you are partially right.

it is to raise money,but not necessarily to fund growth. IPOs are also done to pay off debt and/or allow equity holders to cash out.

some recent examples include Coty, Brixmor, Hilton, Pinnacle Foods, etc.
 
2013-11-07 03:55:28 PM
Twitter will fall hard in the popping of TechBubble 2.0 but in the long run it will become the cornerstone of the information industry. It reminds me of our old newswires, except anyone can post to it, and anyone can read it.

Apply some credibility filters, charge for the ability to post article length message, and you've got an open source newswire.

Kind of neat.
 
2013-11-07 03:56:50 PM

H31N0US: Apply some credibility filters


They  sort of already do this with the verified checkmark. Although that in and of itself doesn't convey credibility and I am not sure how you would implement such a thing.
 
2013-11-07 04:06:11 PM
How does twitter make money?

/Honestly no idea
//Can't all be ad revenue.
 
2013-11-07 04:07:29 PM
I don't do the Twitter, but how on earth are they going to make any money?  Do they shove ads into the feeds?  My wife subscribes to some news feeds and the like, and I've never seen an ad on her reader.

/Serious question
 
2013-11-07 04:10:44 PM

downstairs: I don't do the Twitter, but how on earth are they going to make any money?  Do they shove ads into the feeds?  My wife subscribes to some news feeds and the like, and I've never seen an ad on her reader.

/Serious question


Sometimes there are "sponsered" tweets.

/can't remember the last time I saw one.
 
2013-11-07 04:14:26 PM

Nexzus: How does twitter make money?


downstairs: how on earth are they going to make any money?


Ads and "promoted" tweets, mostly. You can also effectively buy a "trending" hashtag that sticks around whether it's actually popular or not. The NFL does it all the time.
 
2013-11-07 04:15:07 PM
How are they going to be able to fund an expected $13 Billion a year in revenue growth, without just absolutely carpet bombing the fark out of it's users with ads in their feeds?   I know a lot of people have already stopped using Twitter because it's already hit a critical mass of users and bots and morphed into an undecipherable wall of white noise.
 
2013-11-07 04:17:24 PM

Nexzus: How does twitter make money?

/Honestly no idea
//Can't all be ad revenue.


Explained
 
2013-11-07 04:50:30 PM

skozlaw: Scrotastic Method: Which is the only point. These companies aren't trying to be companies, not like IBM and GE or anything like that -- they just want to cash out and make sure the angels and venture guys get their returns too. Going public isn't for the public, or the compnay, it's for the few dozen people with options that get to be millionaires now. Once the thing's public, who gives a shiat. See: Groupon.

Are you aware that the fundamental point of an IPO is to raise money? The whole point is to put shares of the company out there for the public to invest in which brings in money to fund growth. If you just want an initial kick then you're gambling against the fundamental point of the IPO and if you lose your ass when it doesn't happen that's you're own stupid fault.

If you don't think the company can grow with investment money.... don't give it any investment money.


Some people invest because they think that a company will be substantively WORTH more in the future, and that at that time, other people will pay more for that stock than they did.  Other people don't care about substantive worth, they are only focused on what they think people will pay for it in the future.  This later group can drive up stock prices "irrationally" (by the Keynes quote earlier), without regard for it's actual business valuation.  Facebook and Twitter and Amazon (don't forget about Amazon) are "hot stocks" and people pay more because people pay more because people pay more... Until one day, people there are no more idiots to buy on the other side and the whole thing comes crashing down.  It could happen tomorrow or when the sun goes out.  Place your bets!
 
2013-11-07 05:31:30 PM
How can Twitter make money?

I'm not the CEO of Twitter. Honest. I'm just asking for a friend.
 
2013-11-07 06:29:24 PM
Eh I'm of two minds on Twitter stock. As much I hate it and wish it didn't exist, I don't see a world without it or something like it. It's too prevalent...the farking news cites it as a source and shiat that people say on there becomes "news".

So it sounds like a good buy but...I could easily see NextTwitter coming out and completely MySpacing the shiat out of Twitter. And really, does anyone think there isn't going to be a next thing? It has limited long term value I think.
 
2013-11-07 06:33:13 PM

js34603:  It has limited long term value I think.


In other words make your money off the stock quick because this diaper is going to be full of shiat soon
 
2013-11-07 06:37:29 PM

skozlaw: Nexzus: How does twitter make money?

downstairs: how on earth are they going to make any money?

Ads and "promoted" tweets, mostly. You can also effectively buy a "trending" hashtag that sticks around whether it's actually popular or not. The NFL does it all the time.


Oh, so THAT'S why I sometimes see trending tags that don't make any sense.
 
2013-11-07 06:51:29 PM

www.zerohedge.com

Rent Party:
Valuation is entirely dependent on how well you have greased your banker, and nothing else.


The bankers got greased pretty damn well with this one. If they'd priced the offering higher (vs the $26 initial offer price announced thru brokerages) then Twitter wouldn't have left a billion or so on the table; instead the bankers won that share when they sold into the market at almost $20 higher than what Twitter received.

http://blogs.marketwatch.com/cody/2013/11/07/heck-no-i-wont-invest-i n- twitter-after-this-ipo-debacle/

/put in commit-to-buy order with my broker, got 0 allocation
//turns out that nobody got an allocation, except the largest of the investment banks
///not bitter
////no
 
2013-11-07 06:56:02 PM

van1ty: Yeah those people who bought Facebook stock sure got hosed


The private investors that bought the first day and panicked took a bath.  And just because it's at 48 today doesn't mean that's what it's "really" worth.  I have seen stocks that have less than zero behind them go up and stay thee for phenomenal amounts of time.

At the end of the day you need a steady dependable revenue stream that won't go elsewhere at the changing of the tides.  And on that count Facebook is very risky indeed.
 
2013-11-07 07:19:09 PM
It doesn't matter whether the company can make a profit.  What matters is whether churning the stock can make a profit.  And for those favored individuals allowed to buy at $26 and can sell at $45, it will be very profitable.
 
2013-11-07 07:26:08 PM

Marcus Aurelius: van1ty: Yeah those people who bought Facebook stock sure got hosed

The private investors that bought the first day and panicked took a bath.  And just because it's at 48 today doesn't mean that's what it's "really" worth.  I have seen stocks that have less than zero behind them go up and stay thee for phenomenal amounts of time.

At the end of the day you need a steady dependable revenue stream that won't go elsewhere at the changing of the tides.  And on that count Facebook is very risky indeed.


Agreed:
Legislative change wrt privacy/ownership of data - e.g. Germany
Infinite space for ads attenuating value of same towards zero
Pollution by fake profiles
Software ad-blockers
Fashions and trend being lightning quick at pulling the rug out.

etc.
 
2013-11-07 07:55:21 PM

skozlaw: van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price

And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.


What's YOUR point?  It's up 25%.  By any metric that's a great return.
 
2013-11-07 08:06:12 PM

van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.


Yeah, my 38 pennies is now worth 48 pennies.
Fan-dam-tastic.

Pump the bubble, wall streeters, pump it good.
 
2013-11-07 08:20:17 PM

AeAe: skozlaw: van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price

And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.

What's YOUR point?  It's up 25%.  By any metric that's a great return.


Sucks to be your investments.  My shares of Ruger are up slightly over 60%

//can't go wrong betting on violence when it comes to humans
 
2013-11-07 09:07:29 PM

Marcus Aurelius: I have seen stocks that have less than zero behind them go up and stay thee for phenomenal amounts of time.


No surprise there, as stocks are valued based on what's ahead of them, not what's behind them.

Plus more than a little baseless speculation about what other people think other people think a stock will be worth.
 
2013-11-07 09:29:50 PM
"Valuing a company at 34 times revenue is just good common sense, especially when it's never turned a profit..."

Generally speaking valuing companies is good common sense as long as you are doing it accurately.  Good headline.
 
2013-11-07 09:32:44 PM
Wish I could short it.
 
2013-11-07 09:36:33 PM

NewportBarGuy: Wish I could short it.


I have a little over $6K I could short TWTR with.  I'm not that ballsy.  I'll wait till it crashes and then crawls back up just like Facebook did.
 
2013-11-07 09:37:41 PM

van1ty: vonmatrices: van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.

You're missing the in between period where facebook was around 18$.

So just wait and buy twitter when it hits the trough.


What on earth does that have to do with whether or not Facebook bombed.  It is a fact that the Facebook stock is 25% higher today than its IPO price.  That is a fantastic ROI for just over a year.


I was just making the point that if you are going to use past performance of a similar stock to try and chart this one's path, all you have to do is wait until twitter dips low with the early speculators cashing out early, then buy low while twitter figures out how to turn a steady profit.  No need to buy today, tomorrow, or next week if the price isn't right.
 
2013-11-07 09:46:17 PM

Smeggy Smurf: I'm not that ballsy.


I reversed my Tesla short ahead of earnings and got burned badly. I've really got to stop playing the momentum stocks. I'm only down $100 because of the previous short, but it is so hard to trade from the outside. The only plus is the short interest, but they could wait until $90 or lower to execute.

I want to short Twitter because they picked the worst time to IPO. If I can find the shares to short tomorrow, I will. There is no way that price is valid. They have no dividend. So, bonus.

Just have to hold it through the fluctuations.
 
2013-11-07 09:47:15 PM

Smeggy Smurf: AeAe: skozlaw: van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price

And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.

What's YOUR point?  It's up 25%.  By any metric that's a great return.

Sucks to be your investments.  My shares of Ruger are up slightly over 60%

//can't go wrong betting on violence when it comes to humans

~

From here it reads like skozlaw's point [and Smeggy Smurf's point] is that they SCOFF at an NYSE beta-smashing return of 25%, and that there were better stocks you could have picked, and that they have the 1337 investing skillz0rz to pick such stocks.

i44.tinypic.com
 
2013-11-07 09:54:36 PM

Big Ramifications: Smeggy Smurf: AeAe: skozlaw: van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price

And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.

What's YOUR point?  It's up 25%.  By any metric that's a great return.

Sucks to be your investments.  My shares of Ruger are up slightly over 60%

//can't go wrong betting on violence when it comes to humans
~

From here it reads like skozlaw's point [and Smeggy Smurf's point] is that they SCOFF at an NYSE beta-smashing return of 25%, and that there were better stocks you could have picked, and that they have the 1337 investing skillz0rz to pick such stocks.

[i44.tinypic.com image 567x353]


My choices of gun and defense stocks have netted me a return of some 45% as of closing today.  So yeah.

/always bet on violence
 
2013-11-07 10:07:36 PM

van1ty: vonmatrices: van1ty: Drollia: When it flops like Facebook did, everyone is going to be "shocked"

Facebook IPO:  $38 a share.

Current price per share:  $48


Yeah those people who bought Facebook stock sure got hosed.

You're missing the in between period where facebook was around 18$.

So just wait and buy twitter when it hits the trough.


What on earth does that have to do with whether or not Facebook bombed.  It is a fact that the Facebook stock is 25% higher today than its IPO price.  That is a fantastic ROI for just over a year.


It is a fantastic gamble. It is an insanely stupid investment. The cash they have on hand is worth more than the intrinsic value if the company.
 
2013-11-07 10:10:48 PM

Big Ramifications: Smeggy Smurf: AeAe: skozlaw: van1ty: It is a fact that the Facebook stock is 25% higher today than its IPO price

And Cisco, an established company with quarterly dividends, is up more than 30% over the same period with far less volatility. GE is up 40% over the same period, again, much more stable and also with good dividends.

What's your point? "It went up" doesn't really mean a whole lot in investing.

What's YOUR point?  It's up 25%.  By any metric that's a great return.

Sucks to be your investments.  My shares of Ruger are up slightly over 60%

//can't go wrong betting on violence when it comes to humans
~

From here it reads like skozlaw's point [and Smeggy Smurf's point] is that they SCOFF at an NYSE beta-smashing return of 25%, and that there were better stocks you could have picked, and that they have the 1337 investing skillz0rz to pick such stocks.

[i44.tinypic.com image 567x353]


Well, duh.. 30% is better and 60% is even better.. but you can't shiat on 25%...

I lucked out on Sprint and got in around $3.65... Almost doubled my investment there.. But your picks can't all be that... I got in on MU at $13.. it's around $17 now.. That's great!
 
2013-11-07 10:12:00 PM

InmanRoshi: How are they going to be able to fund an expected $13 Billion a year in revenue growth, without just absolutely carpet bombing the fark out of it's users with ads in their feeds?   I know a lot of people have already stopped using Twitter because it's already hit a critical mass of users and bots and morphed into an undecipherable wall of white noise.


Change it up so that verified corporate and celebrity accounts are paid. I use Twitter for things like seeing when Amazon runs a new lightning deal around the holidays, so it is basically a form of targeted opt-in advertising already.
 
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