[turtle777]

I'm not going to touch it. Severe downside potential.

Denninger does an excellent job on analysing the prospects:

Ok folks, it's not often that I issue a rank do not buy statement on an S-1 (in fact, since starting the Ticker I can't recall ever doing it) but this is one where I feel I need to. It's Facebook.

I'm basing this on one, and only one, criteria -- the rate of acquisition of new accounts is slowing.

That's all I need to know and it should be all you need to know -- the company filed the S-1 as soon as they detected this slowdown in December.

The company identifies no particular need for the capital; it has cash. This strongly implies that the only reason to IPO is for the insiders to monetize their position. Why, if it's rapidly growing in value and there is no meaningful risk to that value vaporizing (and nobody knows better than top management if this is the case!) would the company do this now?

"FB": DO NOT BUY in [Market-Ticker]

Anyone still interested ?

-t

[Person Man]

Nope. I'm content to have a profile on Facebook and not become a shareholder. Even at its current price AAPL is a far better bet than Facebook will ever be.

[rickey939]

I will wait to retire (again) on my MySpace stock.

[besson3c]

I think being a part of the initial IPO and then selling pretty quickly might have been profitable, but I don't think that Facebook's actual value is going to continue to grow beyond its current valuation, whatever that is and/or ought to be.

[SSharon]

Those are some good points.

I don't think Facebook is as infallible as some people think it is. In the long run I expect its stock to reflect that, but for now I think it will be a decent performer.

[Salty]

Honestly I think Facebook has as much if not more potential than Google. The problem is that I don' know that they're going to really meet that potential. They have a huge user base and have essentially replaced email for my generation. They've got a product everyone wants. The question is how to monetize that without becoming hated.

The fact that they've been completely incapable of working successfully with Apple is a sign that they don't know how to work well with partners ... which is unfortunate given that that's likely the best way to create revenue.

[besson3c]

I've heard the whole premise of Facebook replacing email for younger generations and therefore threatening the future of email, and I just don't buy it.

I think it has created fragmentation with what sort of messaging systems people utilize, but you can't outright replace email when you can only contact your friends or people that have configured their accounts to accept messages (if there is such a configuration), and you can only replace email when everybody has access to the same messaging system. There are still lots of older people not on Facebook at all, not in the habit of checking their mailbox, not responsive, etc.

This is probably not going to change either. Many companies need to either own their email, or they at least need a little more control over it than Facebook provides. As long as businesses need a messaging service of this nature, I don't see email being completely replaced the same way that I don't see Windows PCs being replaced - at least not anytime in the foreseeable future.

Right now you could probably make just as strong an argument about text messages replacing email.

[jmiddel]

They are. My best friend has 3 kids ages 26 to 37 and the only way to reach them is texting. Apparently their buddies also ignore email and voicemail, so texting is the only thing that catches their attention.

[shaunwallace]

Probably a minority here but I'll definitely be purchasing some FB IPO stock, I was also a believer in Apple in the mid 90's before they're stock went through the roof over the last 15 years or so. Facebook will continue to grow globally and will be the most profitable IPO in the history of the U.S. over the last decade. Once they're public, they will have shareholders to answer to and like any other public entity, have a need to expand, R&D, invest, pay dividends, etc. One thing is for sure, they're tying the western economy together and are the premier online advertising agency. Sure, Mark doesn't believe in this nor wanted the profit to begin with and so more than likely, he'll move on at some point. Within 5 years, Siri and FB will integrate and hybrid wireless will bankrupt AT&T and Verizon, you heard it here first

[Waragainstsleep]

I don't see FaceBook matching Google for potential as far as revenue goes. Google is connecting people who are looking for things with what they are looking for. FaceBook ads are trying to show people who aren't looking for anything things they might want.

Email/instant messaging is fine but no-one wants ads plastered all over their conversations and thats what they'd have to pull off in order to catch up to Google. I guess they could have a separate "suggestion box" open alongside your chat which picked out keywords and showed you both relevant pages or offers as you were typing, but this would also creep people out a bit. Especially if it worked.

I think I just saw the future. Imagine a version of Siri that never stops listening to everything you say and hear and constantly flashes up relevant ads for products and services in your AR contact-lens HUD. As long as it has an off switch.

[jmiddel]

OFF

[mattyb]

Can't see companies adopting Facebook instead of email myself.

But then I've been wrong before.

[Big Mac]

How profitable is Facebook right now? Unless they're making really money now, I don't see how anyone but suckers are going to be attracted to their stock.

[Waragainstsleep]

I suspect they are making money now, enough to pay their staff well and provide them a Google-esque working environment full of benefits and toys but beyond that I don't know. Their ads are very reasonably priced and fantastically well targeted, but if their account adoption rate is slowing then its only a matter of time before shareholders start pressuring to squeeze more out of what they have and that means charging more for the ads. Personally I think they are attractive because of their pricing structure. If they get too greedy, it could collapse fast.

[besson3c]

Originally Posted by Waragainstsleep 

I suspect they are making money now, enough to pay their staff well and provide them a Google-esque working environment full of benefits and toys but beyond that I don't know. Their ads are very reasonably priced and fantastically well targeted, but if their account adoption rate is slowing then its only a matter of time before shareholders start pressuring to squeeze more out of what they have and that means charging more for the ads. Personally I think they are attractive because of their pricing structure. If they get too greedy, it could collapse fast.

I wouldn't be surprised if Facebook makes far more from selling demographic info and profiles to various marketing agencies than it does the ads themselves. The ads themselves could be supplementary to this info.

As long as people continue to use Facebook and there is therefore new info to gleam, they'll still be in good shape even if the rate of new registrations slows.

[Mrjinglesusa]

Originally Posted by Big Mac 

How profitable is Facebook right now? Unless they're making really money now, I don't see how anyone but suckers are going to be attracted to their stock.

2008: -$56 million

2009: $229 million

2010: $606 million

2011: $1,000 million

So yeah, they profit and it's gone up three straight years.

Facebook’s Profits: $1 Billion, On $3.7 Billion In Revenues | TechCrunch

[Eug]

Originally Posted by mattyb 

Can't see companies adopting Facebook instead of email myself.

But then I've been wrong before.

Well, I'm a geek and I still don't have a FaceBook account, so I'd have to agree with you there.

Plus, it's quite possible Facebook will never grab a real foothold in China, which would make it functionally useless as an email replacement.

So far these have been my predictions:

1) Apple success: Correct, but it went way beyond what I was expecting.
2) Google success: Correct, but it got bigger than what I was expecting.
3) RIM failure: Correct, but it took longer than I had expected.
4) Myspace failure: Correct.
5) Facebook stagnation by 2010: Incorrect
6) Twitter stagnation by 2010: Incorrect.
7) Bing failure: Correct

[Stogieman]

Originally Posted by Eug 

Well, I'm a geek and I still don't have a FaceBook account, so I'd have to agree with you there.

Plus, it's quite possible Facebook will never grab a real foothold in China, which would make it functionally useless as an email replacement.

So far these have been my predictions:

1) Apple success: Correct, but it went way beyond what I was expecting.
2) Google success: Correct, but it got bigger than what I was expecting.
3) RIM failure: Correct, but it took longer than I had expected.
4) Myspace failure: Correct.
5) Facebook stagnation by 2010: Incorrect
6) Twitter stagnation by 2010: Incorrect.
7) Bing failure: Correct
8) HD-DVD success: Incorrect.

You forgot one.

Hey wait, didn't you also predict the PS3 to dominate this generation of gaming consoles or was that the other Canadian, Sprinkles?

[Eug]

Originally Posted by Stogieman 

You forgot one.

Heh. In that case I was hoping HD DVD would win, and argued why I preferred it, but I wasn't actually completely convinced HD DVD would win. Uphill battle once Microsoft decided against including it in all 360s.

It's interesting to see MS never released a Blu-ray drive though. I guess at this time it's pointless cuz the players are like $100.

Hey wait, didn't you also predict the PS3 to dominate this generation of gaming consoles or was that the other Canadian, Sprinkles?

I don't recall making that prediction. Anyways, I don't own a PS3. I bought the 360 because I got sick of waiting for Sony. Sprinkles owns the PS3 though (and the Wii and the 360).

[boy8cookie]

At this time? Are you serious? Do they even sell HD DVDs any more?

[Eug]

Originally Posted by boy8cookie 

At this time? Are you serious? Do they even sell HD DVDs any more?

? I said I found it a little bit odd MS didn't release a Blu-ray drive (after HD DVD died).

[The Godfather]

If I had money to lose, sure, I would sink two or three grands in FB.

But I have no money to loose. I'd rather let it sit as US$.

[el chupacabra]

I'll be a sucker. Look at the chart of linked-in on the ipo day. It ipo'd at 40ish, but opened at 80; I looked at it and said "no way Im buy at double the ipo price," but it kept going all the way up to 120 or something, then down, then up. I think fb might be a volatile day and I plan on being in and out within the day. I love volatility. Facebook is overvalued right now for sure and I expect it will taper off a little unless they have some secret new services up their sleeves for down the road.

I too think fb has lots of unused potential. Right now fb is world famous, they have the users, they have the marketing, now all they have to do is start moving in on other user based web industries and they'll take over the online world. What i mean is Netflix is an example of a 1 trick pony; fb could set up some video servers duplicate/crush nflx business in a few months if they wanted to. As someone who doesn't like subscriptions I would rather rent and pay by the movie to FB than to NFLX. Honestly I don't even know why people use email for personal use anymore. Fb's messaging is more reliable and easier. When I go on vacation everyone says send me pictures... What am I to do with email? Resize all 90 pics for email, upload then send to all the different people? Much easier to just click a few buttons and have them auto re sized and available to anyone who wants to see on fb. Then again if fb got serious with email they could easily out-compete gmail, hotmail, yahoo. I'd love to have just one account where I could sign in and do email, photos, messaging, movies.
And lets not forget the spam; in fb I know all my messages are personal messages; no corporate news letters, bills, adds, spam... I know there's a lot of people out there that say they're too good for fb and that it is for fake friends, and if people want to talk to them they can just email them. This is extremely ironic to me considering email is now days a way to communicate with corporations and fb is specialized for friends and family.

The problem with facebook is they're not evolving. It's a great piece of technology but the whole system is a childish interface built for childish antics. The need some serious re-branding and new features consolidated into the account. Right now I pay google $5/yr for large file photo storage at picassa. But then I have to send people the link; it would be great if fb charged $5/yr and gave me 20GB of photo storage. If fb got serious and stopped trying to turn everyone into a child they could move in on flikr, nflx, all online email, and they're already moving in on kids games (ugh). I guess this focus on games and kids is what happens when you have some young fool run a company who's mentally stuck trying to relive his college years that he missed.