Wow, I have to admit that I did not expect the Facebook IPO to go anything like it has gone so far. The initial valuation of $104B was close enough to what I expected but I certainly did expect some kind of pop. Then, last Friday afternoon, when Morgan Stanley seemed to be using billions of dollars to defend $FB from going under the $38 IPO price, it looked all but certain that the stock would fall. Which it did on Monday. Not a big surprise, Morgan Stanley wasn’t going to keep buying stock for much longer.
How Did We Get Here?
The big question though for me is how we got to the point where buying Facebook was seen as “stupid”, as the new “Pets.com” purchase, the clear sign of a bubble. I have been looking at the media and it becomes a bit more clear when you look at the headlines. Just look at all of these numbers from ZeroHedge:
Sometimes I’m sure you feel like you believe something so strongly that everyone else seems to be missing the big picture. I feel that way. Like all of those who are criticizing Facebook are just not getting it. Not that they’re not smart but they just don’t see the whole picture. One has to ask himself.. what is more likely: that I am right or everyone else is? I’m not Warren Buffett by any means but I still feel like I’m decent at this stuff? So what am I missing?
I mean come on, how in the world does GM stopping its $10 million annual advertising campaign mean that Facebook advertising does not work? It also will be making huge cuts in its Super Bowl advertising, is that dead too?
Facebook’s Future Growth Will NOT Come From
-hundreds of millions of users signing up
-Facebook suddenly adding big flashy logos on its website to gain more ad dollars
-Converting mobile users to become desktop ones
-Its unique gateway to connect brands with users
-Its unique relationship with millions of companies that advertise their Facebook page instead of their own website, believing that is where their best opportunity resides
-Its power in knowing users better than anyone else (even Google) and placing the most customized ads
-Its upcoming services such as ad services, its virtual currency, etc. Many others can launch such products but no one is better placed to get it done or partner with those who do
Give Me A Break
So everyone in the world loves Facebook that they connect to it from all of their devices including their mobile phone. How in the world is that BAD news? It’s not. Facebook is simply focused on growth (as it should) so putting a whole team on monetizing mobile makes no sense. Keep the experience unique, get more users involved and in the end, it will pay off.
The One Thing That Has Made Me Pause
The only valid criticism I have seen is that Facebook has apparently warned that growth guidance had been overestimating what is currently happening which could mean slower growth in the next few quarters. There is a lot of speculation about this because Morgan might be in trouble after warning some big clients without telling their other smaller ones…
Sorry For The Rant
I know I might sound a bit upset here but I’m not, I’m really not. This will actually make it cheaper for me to buy Facebook $FB which i had fears would not be possible. So please tell me, do you think I’m crazy? It’s not like Facebook is this company with no revenues or profits, with no plan, etc? And by the way, this is also exactly why I try to wait before buying a recently turned public stock. Things can turn out so different from what we initially expected.