Bono and the Facebook IPO

[jpp]

Most definitely

Personally, I've never clicked an advert on facebook, and don't plan to in the future.

I think Facebook's real strength lies in its ability to build and communicate brand information to huge numbers of consumers.

But I imagine big companies will soon wise up to the fact that the ROI is not there for real advertising.

General Motors announced just before the IPO that they would no longer buy advertising on Facebook. Other companies will follow suit.

Also, as people become a little bit more IT savvy, the effectiveness of marketing on Facebook will diminish.

e.g. If I click on a "like", you don't know my full name, age, sex, address, school, home town or phone number. I choose NOT to share ANY personal information like this.

As people wise up, what will companies really gain from knowing 500,000 anonymous people like Kit Kats?

Advertising for Kit-Kat is about brand awareness. The more people talk about Kit-Kat the more they are likely to buy one. They do not need to direct market their product and Facebook is perfect for them because everyone is on it, especially those who are most likely to buy sweets.

 

[Hotshot-Tottenham]

94 P/E!!!

Heading for a big tumble. I bought a load of mining stocks on Friday. (Petropav P/E 5.3)

Got them for under 4 quid. 52-week high of over ?ú9.

They have taken an almighty battering over the last few months as the Gold price has tumbled.

I think they're brilliant value at the moment. And they pay a good dividend.

Particularly when everybody comes running back to Gold when they realise the banks still don't have any money!

ok, educate me please!

what's P/E mate and what do the figures you mention (94 and 5.3) mean?

cheeers!

 

[Hotshot-Tottenham]

I've never looked at or clicked on an ad on facebook, ever

Yet as I mentioned earlier, I know a very wealthy guy that's makes millions in several countries because of facebook

Still, they say the greatest trick the Devil ever pulled was convincing the world he didn't exist

Perhaps Facebook have gone one better and have convinced business that customers are buying their products BECAUSE of facebook

i've run ad campaigns on FB for my last company and we got clicks by the hundred, maybe thousand depending on the size of the campaign - specifically to promote events and to get people to add themselves to the 'attending' list.

we then had a 'database' of people that we could market to about the event - sell tickets, associated merchandise etc. and of course, when these people added themselves to our event, all their friends (of whom some would have had similar interests, naturally) got to see that their friend was attending.

there's surely no doubt of the potential virality of FB-based info.

as for causality, afaik it's very hard to prove that a customer liked a brand and then bought because of that, or was an existing customer and liked the page secondarily.

 

[spursman17]

Based on what though; it's nothing but your own belief, isn't it? Because there's diddly squat in terms of evidence - and Facebook acknowledge this - to prove that any progress has been made in this area.

See, it's all good and well stating the obvious: how powerful it would be if you could harness the power of the mobile. But, it's one thing saying it...another thing entirely actually doing it. Thus far, no-one has a clue.

Facebook have flagged it as a business risk, as they rightly recognise the migration in browsing habits from desktop PCs to mobile platforms. They anticipate this growth will accelerate, and yet they admit they have nothing in place to actually monetise this switch in behaviour. That's a serious problem for them.

But hey, if you know the answer...then just give Mark a call, because I'm sure he'd love to talk.

Are people unable to discuss these days without feeling the need to be rude?

As for smartphones, they are a new technology. The Iphone was released in 2007. People took the same 'risk' attitude prior to the dotcom boom.

I'm not saying I have the answers but what I am saying is I'm confident technology will find a breakthrough to churn revenue.

 

[spursman17]

So you have a vested interest? Just because your business is making a bet of Facebook failing doesn't make you right.

Who says I am right?

As I said, this is a forum and I am putting my opinion out there based on my experience in the field. How can you conclude me being right/wrong when we are talking about an event yet to happen?

The company I work for couldn't care much on the outcome of Facebook, we have no investment with them.

Maybe new tech like 4g can open doors to other avenues of features currently not popular, successful today.

 

[southstand1882]

ok, educate me please!

what's P/E mate and what do the figures you mention (94 and 5.3) mean?

cheeers!

Good question young man. Wiki explains it better than me:

The average U.S. equity P/E ratio from 1900 to 2005 is 14 (or 16, depending on whether the geometric mean or the arithmetic mean, respectively, is used to average).
Normally, stocks with high earning growth are traded at higher P/E values. From the previous example, stock A, trading at $24 per share, may be expected to earn $6 per share the next year. Then the forward P/E ratio is $24/6 = 4. So, an investor is paying $4 for every $1 of earnings, which makes the stock more attractive than it was the previous year.
The P/E ratio implicitly incorporates the perceived risk of a given company's future earnings. For a stock purchaser, this risk includes the possibility of bankruptcy. For companies with high leverage (that is, high levels of debt), the risk of bankruptcy will be higher than for other companies. Assuming the effect of leverage is positive, the earnings for a highly leveraged company will also be higher. In principle, the P/E ratio incorporates this information, and different P/E ratios may reflect the structure of the balance sheet.
Variations on the standard trailing and forward P/E ratios are common. Generally, alternative P/E measures substitute different measures of earnings, such as rolling averages over longer periods of time (to "smooth" volatile earnings, for example),[SUP][7][/SUP] or "corrected" earnings figures that exclude certain extraordinary events or one-off gains or losses. The definitions may not be standardized.
Various interpretations of a particular P/E ratio are possible, and the historical table below is just indicative and cannot be a guide, as current P/E ratios should be compared to current real interest rates (seeFed model):

N/A	A company with no earnings has an undefined P/E ratio. By convention, companies with losses (negative earnings) are usually treated as having an undefined P/E ratio, even though a negative P/E ratio can be mathematically determined.
0–10	Either the stock is undervalued or the company's earnings are thought to be in decline. Alternatively, current earnings may be substantially above historic trends or the company may have profited from selling assets.
10–17	For many companies a P/E ratio in this range may be considered fair value.
17–25	Either the stock is overvalued or the company's earnings have increased since the last earnings figure was published. The stock may also be a growth stock with earnings expected to increase substantially in future.
25+	A company whose shares have a very high P/E may have high expected future growth in earnings or the stock may be the subject of a speculative bubble.

It is usually not enough to look at the P/E ratio of one company and determine its status. Usually, an analyst will look at a company's P/E ratio compared to the industry the company is in, the sector the company is in, as well as the overall market (for example the S&P 500 if it is listed in a US exchange). Sites such as Reuters offer these comparisons in one table. Example of SPY Often, comparisons will also be made between quarterly and annual data. Only after a comparison with the industry, sector, and market can an analyst determine whether a P/E ratio is high or low with the above mentioned distinctions (i.e., undervaluation, over valuation, fair valuation, etc.).

 

[Gifter]

Back in the .com bubble alot of tech stocks had P/E's (price to earnings) up towards 500, most of this then becomes perceptual value and much like a 'gold rush' where all sense of reason is lost by alot of people, as they felt they are going to miss the boat on something huge, as happened with Facebook, when in reality it's price should be around 1/8th and it would still be a gamble for normal investors compared to established bluechips, it works on both sides though, bulls (positive investors who believe good times are now) chase up the price in times where perception is good, bears (the end is nigh) depress it back almost as quickly when times are bad.

It's a difficult thing to gauge though, as it can be TTM or FTM (trailing 12 months is the norm, forward twelve months becomes very relevant though when a stock has disposed of assets the the previous year, or is going to make large write downs etc or is realising big new revenue streams). This way investors can make money off watching for such writedowns etc as it tricks metric based investment funds into dropping shares and depressing the price (or inflating it of course if it has had a one time sale which brings in large one time earnings).

fudge stocks though and fudge Facebook.

 

[Leeds Spur]

Who says I am right?

As I said, this is a forum and I am putting my opinion out there based on my experience in the field. How can you conclude me being right/wrong when we are talking about an event yet to happen?

The company I work for couldn't care much on the outcome of Facebook, we have no investment with them.

Maybe new tech like 4g can open doors to other avenues of features currently not popular, successful today.

I'm sure tablets are the key

 

[Leeds Spur]

Regarding P/Es generally 15/1 is considered the average an above that you'd wonder why and below that you'd wonder why.

 

[Sheikh Ma Nuggets]

[/B]

Are people unable to discuss these days without feeling the need to be rude?

As for smartphones, they are a new technology. The Iphone was released in 2007. People took the same 'risk' attitude prior to the dotcom boom.

I'm not saying I have the answers but what I am saying is I'm confident technology will find a breakthrough to churn revenue.

Rude? Grow a pair!

Don't tell me, you're one of those people who can't really handle straight-talking; instead preferring people to fanny about desperately trying to sugarcoat the fact they disagree with you.

The 'discussion' is live - I disagree with your take, and think you're talking unfiltered gibberish. Rude, is to think you have the right to try and lecture me because of it.

 

[Leeds Spur]

I've noticed a few fannies have signed up recently. It's the Internet people, usually social dacorum is out of the window!