Facebook IPO: What is in the S-1 to convice you its a good buy?

Facebook’s IPO is going to be as big if not bigger than Google was a few years ago. The S-1 filling document is a very lengthy dry read that most people will skip. We are not most people. The S1 was very insightful. For one thing we don’t have to wonder if Zuck would still be in charge. He will have the most votes based on his type of stock. The shares will be split into “A” and “B” shares, where the latter get 10 votes per share, and the former get one. Zuckerberg presently owns around 28.2% of the share capital.

Facebook had revenues of $3.7bn and had an operating income of $1.7bn.
They had 845 million active users and the numbers are still growing.

Saying Facebook depends on advertising is a common sense but what surprised us is that it only accounts for 85% of the revenue. The rest comes from in-app purchases.

Zynga is almost as important as Mark is for the company. In 2011, they were 12% of Facebook’s revenue. Facebook wrote in that “If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected.”

The mobile version of the site had 425 million monthly active users in December 2011. There are no ads on the mobile site but that may soon change. The S1 states, “our revenue may be negatively affected unless and until we include ads or sponsored stories on our mobile apps and mobile website. We believe that people around the world will continue to increase their use of Facebook from mobile devices, and that some of this mobile usage has been and will continue to be a substitute for use of Facebook through personal computers. In 2011, we began serving our products from data centers owned by Facebook using servers specifically designed for us.” I wonder will the servers help place ads on mobile devices?

There are 138m shares that have been issued to the employees of Facebook for $0.83. At an expected price of about $45, that’s almost $6.2bn profit for the employees. That is not a bad turn around for a 401K plan.

Man U goes IPO: Manchester United’s plans $1 billion IPO

 

Arguably the most recognized, loved, hated and successful team in the world is about to offer it’s self up to the open market.  Manchester United’s planned $1 billion public offering has been approved by Singapore’s stock exchange. They will start trading at the end of the year.  The is worth about $1.9 Billion so says Forbes.

What you may not know is that the team though overseas is an American-owned club.  Manchester United is owned by the Glazer family. The same family that owned the Tampa Bay Buccaneers.  Forbes magazine  has ranked Manchester United as soccer’s most valuable team for the last seven years.

The ipo is welcomed at the team may be worth a lot but they are also in a lot of debt. The club has about $750 million of debt on the books.

LinkedIn was lucky to come out with an IPO when it did; Groupon & Zynga have both backed out of theirs due to volatile market

Groupon is more than rethinking its IPO. It has put it on the back burner. While they claim to not be canceling its IPO they are not in any rush to come out and play in this market.  Groupon had planned to go public after Labor Day but thought better of it. There had been talks of a  planned a roadshow for investors next week. That roadshow has been canceled. So the  $750 million IPO in June it filed for just a few weeks back will have to wait.  Zynga on the other hand is still coming out to play but just a little bit later. They plan to go IPO in September but have no moved that to November.

Move over LinkedIn (LNKD) here comes Yandex (YNDX). The Google of Russia goes IPO

Russian search engine Yandex who is called that Google of Russia hits the market today with the symbol YNDX. They also were priced above the high range of what was expected. They priced last night at priced $25 a share for its initial public offering. By the time it hit the open market the stock was over $30 per share. I bought it at $31.87

I have been looking forward to this stock as much as I did for Google and  Baidu. Yandex is the clear cut leader in its field. While Google runs the US search market. It is not king around the world. Baidu runs China and Yandex runs Russia. It’s not even close with the company getting close to 65% of the market.

While the stock is a must buy. It is not a buy and dump stock. It is not like say LinkedIn that was boosted by public buzz. I say again; LinkedIn is not a leader its field. I said the stock would get stable at $60 to $85. It’s now almost there at the range. Yandex will not have that issue. It will keep its gains for the long term.  LinkedIn may have had the second-highest IPO performance of the year but at the end of the day if you did not flip early you were left in the cold. That stock closed down 5% for the day Monday. The point is LinkedIn was for a quick buck. Yandex is a great addition to your portfolio.

LinkedIn IPO reminds us of the old days. Priced at $45 & opens at $80 now over $100. Should you buy or wait?

Remember when IPO’s would open up and than jump to over $100 a share. There was a new .Com IPO almost everyday. At least two or three would hit the market. There are not too many left over from those good old days. When that boom went bust. We should have learned not to jump on the train so fast without checking to see what stops were ahead.

I knew better although I did buy GeoCities stock and was very happy with my return. This time around you should know better too. So let’s get to the point. Is LinkedIn a good buy? The short answer is yes. As long as you have an exit strategy. The stock was priced at $45 but backroom deals (I mean early investors) drove the price to open to the public at $80 a share. I got in at $82 a share. Why would I buy an IPO for that much?

Stocks are a momentum driven beast. IPO’s are the cool kids. Everyone wants a to have a part of it. The more people talk about it the more it will drive the price up. LinkedIn in the long term is not a smart buy. The stock will not and can not sustain above $100 per share. The value proposition is just not there. It’s not like Google that was and still is a leader in it’s field.  LinkedIn has just above 100 million subscribers to its service. Although it has a good mix of revenue from premium service subscribers, advertisers and recruiters; the amount of income it does is not a justification for the inflated price of its stock at the moment.

If you are looking for a quick buck you should have got this stock this morning at $80 to $85. Right now if you jumped in on the stock that was at last glance $110 you would be waiting for the downswing. The MACD Lines should be crossing anytime now. I think the stock will hit $125 before it goes back south. My exit in case you wanted to know is that. I have triggers set at $125 for a high and $100 for a low as an exit. The stock should stable around $60 to $85 in the next few weeks.

If you want a long term stock wait for Yandex. They will hit the IPO market next week. They are the Google of Russia with currently over 64% market share in search and has over 10 billion web pages indexed. Google has about 21.9% of search engine generated traffic. Yandex is the national non-English-language search engine. Expect to see the same price jump that Baidu had.  Unlike LinkedIn Yandex is a long term win.

LinkedIn Goes IPO, soon anyway

 

Professional social network LinkedIn has just submitted its S-1 filing with the SEC, indicating that it will file for a public offering. The maximum proposed total offering price is $175 million but this is just a placeholder amount. The company also announced the filing on its blog.

In terms of revenue, in the nine months ended September 30, 2010, LinkedIn’s net revenue increased $80.6 million to $161 million from the same period in 2009. Net income for the first nine months of 2010 came in at $10 million.

LinkedIn’s total net revenue in 2009 was $120 million, which LinkedIn obviously surpassed in 2010. The company took a $3.9 million loss in terms of net income, with 2010 as the first profitable year for the network. As of September 30, 2010, LinkedIn had $89.6 million in cash. The company now has 990 employees and over 90 million members.

 

Groupon Worth $15B + Google offer $6B= No Sale

 

The New York Times is reporting that  Groupon’s valuation to more than double the $6 billion Google offered for the company just months ago, at about $15 billion.

From The New York Times:

“An I.P.O, if it happens, will be a significant milestone for the young startup, led by 30-year-old founder Andrew Mason, whose quirky personality has helped shaped the site. The offering, which would also be among the most highly anticipated since Google’s in 2004, would also represent the highest valuation on the company to date.”

Groupon recently got $950 million dollars from investors  according to the Times. People have saved over $1 billion dollars saved through the use of Groupons. I would love to learn more about what plans they have going forward.

Facebook IPO In 2011? No

There won’t be a Facebook IPO in 2011. So long as the company’s growth metrics are strong, Facebook has no need for the public markets. When it hits its saturation point though, that’s when you should expect the social network to make its move. I predict that will happen in 2014 if that.

There have been countless rumors about a Facebook IPO since 2007. The media has been waiting with baited breath for the day that Mark Zuckerberg cashes in on his baby and turns his company public.  Facebook and its billionaire leader aren’t going to be raising money on the public markets.

Mark Zuckerberg is famously uninterested in money. He believes in delayed gratification and has lived in a modest home for years — he’s the opposite of the far more extravagant Larry Ellison, co-founder and CEO of Oracle. In other words, he’s in no rush for a big payday.

Secondary markets like Sharespost have changed the game for cashing out on investments. In the past, VCs needed to cash out on their investments by acquisition or IPO, but as Accel Partners proved last month, VCs no longer need an IPO to do so. Zuckerberg sees no strategic advantage to an IPO. In fact, it’s just a lot more paperwork, headaches and scrutiny. He’d love to delay that as long as possible.