Lov-3

Why Investors Will Like the Facebook IPO

I expect Facebook to touch the upper range of its valuation expectations of $100b. I would not be surprised if the valuation touches $120b, and the company makes $10b+ in the offering.

Facebook has 850 million active users with 100 billion connections, sharing 5 billion things everyday. Thus, Facebook has more data about consumers than any other company in the world. In the world of advertising this data is key and I would expect Facebook to find more use for this vast treasure of data in the years to come.

Facebook operates in the online advertising market that is rapidly growing. US alone is expected to spend $174b in advertising in 2014, up from $154b in 2011. Among the different categories, worldwide Internet advertising is predicted to grow from $72b in 2011 to $113b in 2014. Currently Facebook’s share of the advertising pie is just $3b. Thus, Facebook has a large head room to grow and could take a sizable share of this $113b ad spend in 2014.

User’s search behavior is changing in the past 2 years and more people are now relying on their network to find answers to their queries. If this trend materializes in the future, Facebook could attempt to claim a chunk of the Google’s search revenues ($14b).

Hot tech companies going into an IPO typically get a 100+ PE (Price to Equity ratio) value. Google could have had a 200 PE but settled for a more conservative 118 PE at the time of its IPO, and has still paid its initial investors handsomely. Facebook’s social network competitor LinkedIn had a 980 PE at the time of its IPO. With $1b+ revenues, Facebook could have $100b valuation while still having less than 100 PE.

Unlike most social media startups, Facebook has a solid balance sheet with substantial cash reserves ($3.7b) and a healthy revenue & net income growth. Compare this to companies like Groupon that barely makes a profit but claiming a valuation of $9b.

In its brief history, Facebook proved to be a very tough competitor and is quick to adapt the popular features in other networks. Since it is very fast moving, I would expect it to stay at the bleeding edge of technology in the immediate future.

Its top management that includes CEO Mark Zuckerberg and COO Sheryl Sandberg have a good pulse of the technology trends and have the right mix of aggression and conservatism to take the company forward in the next 5 years.

In summary, I consider Facebook to be a strong buy even at a valuation of $100b. I think the company is fundamentally strong with a stellar balance sheet and has a strong growth. Its management, with all their quirks, is good enough to take their company into the next era.

Facebook Increases IPO, Again

Michael Harper for RedOrbit.com

Facebook increased the size of their IPO this morning by nearly 25%. Their initial public offering is already expected to set records, most notably the largest IPO of any internet company, even larger than Google’s. This news comes in the wake of yesterday’s announcement that they were losing not only advertisers, but the trust of their users as well.

The eight-year-old company will also be adding about 84 million shares to its IPO, putting the total around 421 shares when the social media giant goes public tomorrow.

According to Reuters, the company itself has not increased the number of shares they are selling. Instead, these extra shares will be sold by early investors, such as PayPal co-founder Peter Thiel.

Mark Zuckerberg’s voting power will also be reduced from 57.3% to 55.8% as a result from these extra shares.

With these changes and these extra shares, Facebook stands to have the third-largest initial share sale in the US, next to American heavyweights General Motors and Visa Inc.

General Motors, by the way, announced yesterday they were going to pull their paid ads on the social networking site, an account which provided Facebook with $10 million of advertising.

Such news has caused analysts and investors to view Facebook in a dim light, leaving questions about Facebook’s long-term viability.

GreenCrest Capital analyst Max Wolff isn’t viewing the IPO so favorably, either.

Speaking to Reuters, he expressed his concern this way:

“This is much more a spectacle, a media event and a cultural moment than it is an IPO. This is not a game of models and fundamentals at this point.”

News of GM’s departure is likely to worry the Wall Street types, but what of Facebook’s users: the normal, every-day students, mothers and small business owners?

According to an Associated Press-CNBC poll yesterday, half of Americans think Facebook is a passing fad, while 3 out of every 5 users do not trust the company to protect their personal information. Furthermore, only 12% of those polled would feel comfortable making a purchase on the website. As for ads, an expected major source of income for the company, a majority of users (57%) say they never click on them.

Stats like this are likely to make early investors second-guess their decision to buy stock in Facebook.

After all, the site continues to grow, but if they can’t figure out how to make money from the more than 900 million people who use the site globally, they won’t be able to stick around much longer.

In 2011, Facebook had $1 billion in net income on a revenue of $3.7 billion. The question of if they’ll be able to add to this revenue is something yet to be seen.

As they march into their IPO, they stand ready to trump Google by $2 billion as the largest public debut of any Silicon Valley company.

Facebook is scheduled to begin trading on the Nasdaq this Friday. Wall Street banks Goldman Sachs, JPMorgan and Morgan Stanley will host the IPO.

The Upcoming Facebook and Zynga IPOs – Should You Get Involved or Stay Out?

IPOs (initial public offering) appear to have lost a small amount of their luster within the last decade or so, but the truth is everyone still turns their heads whenever a big name walks by and announces an IPO. Earlier this year it was the Groupon IPO, this past year it was the new General Motors.

Whenever a company announces their IPO, lots of people want in – it’s obvious why: who among us hasn’t asked (at least to themselves, if not aloud) I wonder what would’ve happened if.

• I would’ve bought Microsoft in the 1980s;
• I would’ve bought Apple when Steve Jobs came back on board;
• I would’ve bought Google at $85/share.

Being a financial advisor, my goal is to ensure my clients don’t should all over themselves.

(OK sidebar: In the event you didn’t laugh during that last sentence, you need to read it aloud. Go ahead.get it? Should on one’s self? I can’t believe my comedy career never took off.okay..returning to our regularly scheduled programming)

It tempts you since it seems like fast money. Who doesn’t want to live in fantasy land for a couple of minutes each day? My fantasy investment purchase? Greek debt insurance 2 years ago. That’s some serious jenga. However I digress.

So, here’s the deal with IPOs and why they’re not the most suitable choice:

1. If you don’t have an in (think: your brother works for Facebook) you’re not gonna get any IPO shares

This means that if you try to purchase into the Facebook IPO the morning it opens, you won’t receive the IPO price (which is what everyone will talk about on CNBC). You’ll purchase your shares at a different-and often much higher-cost.

2. They don’t usually generate profits – at least not immediately:

Like visions of gold, we conveniently remember IPO winners like Google or Amazon. We block out the long, tired stack of losers. Remember Pets.com? What about Vonage.they aren’t dead, but that IPO was a mess. eToys? Amazon.com, a mammoth stock by today’s standards, IPO’d in mid-1997.and didn’t make any percentage gains for several months. Google’s IPO occurred in 2004. The stock experienced a big spike, and then lay flat for 6 months. Often, IPOs don’t pay back for a long time, even if they’re winners like Google or Amazon.

3. Those who make the real cash? The CEO, executive team and investment bankers. This can be a big cha ching event for them.

The Blackstone Group, a private equity and asset management firm, announced in 2007 announced they were going public. The issue drew a huge amount of attention that no one really paid any attention to the prospectus.

Well, it turns out that The Blackstone Group IPO launch only included part of the business (not that part that made money, mind you). After all the shares were gobbled up and the CEO and investment bankers off-loaded their shares (the CEO made $2.6 Billion-lovin’ the capital B), any gullible shareholders were saddled with a 42% loss in the very first 12 months.

If you wish to own a cool new shiny Zynga IPO, but don’t want to do the homework associated with reading the prospectus or making friends with an employee to get the insider price, buy a mutual fund in that same space. If it’s as awesome as you think, the fund manager will buy some (probably at the actual Zynga IPO price) and you’ll own some by proxy. If it’s a sham, the fund manager, who may have a thousand times more resources than you, will likely pass – allowing you the easy way to determine whether to pass as well.

Plus, really, you think it’s smart to put every dollar you own in Zynga shares-even if you could? What’s the best that could happen? Your money could double? Triple?

Sure. But what’s the danger?

Microsoft Awaits $250 Mn Windfall from Facebook IPO

Microsoft is all set to get a $250 million windfall when it sells 20 percent of its estimated 1.8 percent stake in Facebook in the forthcoming initial public offering (IPO) of the social networking giant. At the higher end of the proposed $34-$38 per share price band for the IPO, Microsoft’s entire stake in Facebook would be valued at about $1.25 billion.

Facebook to go public at $28 – $35 per share

According to the latest regulatory filing by Facebook — Amendment to Form S-1 Registration Statement filed with the US Securities and Exchange Commission on May 15 — Microsoft is selling a little over 6.5 million of its approximately 32.7 million shares in Facebook, which would net Microsoft about $249.1 million. If the underwriters to the Facebook IPO fully exercise their option to purchase additional shares, then Microsoft would net an additional $37 million by selling an additional 983,000 shares. This could boost the current windfall to over $285 million from the IPO.

Microsoft had, in October 2007 or about 5 years ago, invested $240 million in Facebook in a deal which valued the social networking giant at about $15 billion. At that time it had beaten internet giant Google to the deal.

When Microsoft invested in Facebook, News Corp’s MySpace.com was the leader in social networking. However, since then, Facebook has become the undisputed leader in its space leaving rivals way behind.

The current IPO values Facebook at a little over $104 billion at the higher end of the $34-$38 per share price band.

How to access Wikipedia during its SOPA blackout

When Jimmy Wales announced that Wikipedia will go black tomorrow in the United States in solidarity with the anti-SOPA protest movement, it was not a decision taken lightly. It might have even surprised many who thought the popular free encyclopedia Wales founded would be adopting a less stark way of protesting the Draconian copyright act. (See CNET’s FAQ on SOPA.)

After all, Wikipedia is one of the most popular Web sites in the world, and a major source of information for millions of people.

But fret not. Thanks to some clever advice from Andrew Lih, the author of The Wikipedia Revolution, you don’t have to go without Wikipedia during the blackout.

Accessing Wikipedia–and most other blacked out sites, it would seem–is actually quite simple. This process assumes that you know what you want to look for on Wikipedia, but if you do, here’s how to find it.

First, do a Google search for your desired topic, for example, the “Stop Online Piracy Act.”

Next, run your mouse over the right hand side of the search results, and you should see some arrows and a page preview for each result.

Finally, scroll down until you see the Wikipedia page you’re looking for (it will frequently be in the top few results, if not first overall), click on “Cached” and Google will deliver you its cached version of the page.

To be sure, the cached version will not be the most current, but it should make do in the absence of Wikipedia.

And as Lih points out, this isn’t the first time Wikipedia has gone dark. In fact, the Italian version of the encyclopedia was the first to adopt a blackout, having done so last October in protest of Italian prime minister Silvio Berlusconi’s proposed wiretapping act. As Lih writes on Storify, the Italian Wikipedia went silent for three full days, and visitors to the site saw this message: “As things stand, the page you want still exists and is only hidden, but the risk is that soon we will be forced by Law to actually delete it.”

Here in the U.S., Wikipedia is joining blackouts by sites such as Reddit, Boing Boing, the Cheezburger Network, and others.

Macabre Addams Family Google Doodle Delight – for Charles Addams

Here at Only Kent we like to keep readers informed about the latest Google Doodle’s, the unique home pages that appear from time to time to mark an occasion or person. Today a new Google Doodle shows a macabre scene featuring the Addams Family, in honor of cartoonist Charles Addams.

The Google Doodle marks the 100th centenary of his birth. He was born on January 7, 1912 in Westfield, New Jersey and died of a heart attack in September 1988. He drew over 1,300 cartoons and the spooky Addams Family he created have been loved and admired across the world. The family featured the unforgettable characters of Gomez, Morticia, Uncle Fester, Wednesday, Thing, Pugsley, Grandma Frump and Cousin It and who could forget Lurch the Butler.

The Addams family made their first cartoon appearance in 1938 and since then have featured in movies, TV shows, theater and also musicals. In fact a recent musical starring Brooke Shields as Morticia Addams was a sell-out. Today’s black-and-white Google Doodle represents the Addams family as they started out and was created by the Tee & Charles Addams Foundation, according to The Telegraph. It depicts various family members in front of the family home with the individual letters of Google weaved across each one. Thus the ‘G’ is illustrated by Gomez holding a swooning Morticia and the ‘E’ is incorporated into Uncle Fester.

Here’s a fact for trivia lovers. Charles Addams was actually born on Elm Street, according to PC Mag. Also although the series seems to have been on forever, it was only on air for two years but can still be seen on TV all over the world. We think that today’s Google Doodle is a really fitting tribute to Charles Addams following on from the recent New Year’s Day and holiday season Google Doodles.

We’d like to know what you think of the Google Doodle today? Does it evoke good memories of the Addams Family? Who would you like to see commemorated next? Let us know with your comments.

Texas police kill 8th-grader carrying pellet gun

KTIV News 4 Sioux City IA: News, Weather and SportsTexas police kill 8th-grader carrying pellet gun. Member Center: Create Account|; Log In; Manage Account|; Log Out. SITE SEARCH WEB SEARCH BY Google. HOME

AP An armed eighth-grader gunned down by US police officers in the hallway of his Texas middle school was brandishing a pellet gun that looked like a firearm, and he refused repeated orders to lower the weapon before the officers opened fire,

3, 2012 the RNC issued a press release stating there had been 12 pellet gun damage incidents reported to police since Christmas Day, including Colemans at the Gardens on O'Connell Drive. CORNER BROOK — When Jeff Follett was a kid, the idea behind a

A second person was shot with a pellet gun hours later in an unrelated in Southeast Baltimore. Police said the young teenager was shot multiple times in the body and hand. Few details were available, but authorities said it occurred about 7 pm in the

Police: Cummings student had pellet gun | police, gonzalez, gun, brownsville, cummings, pellet, student, armed, school, shot.

Change of Subject: Dining on cracked crystal for 2011 yet predicting fearlessly for 2012

Twelve months ago, as is my custom, I asked readers to offer their best guesses as to what 2011 would bring, then offered my own predictions.How'd we do?On six of the 18 questions, readers and I were correct and in agreement:

1. That Gery Chico would finish in 2nd place in the multi-candidate race for mayor of Chicago.2. The Illinois General Assembly would approve a state income-tax hike.3. Sarah Palin would not make a run for the presidency.4. Chicago police Superintendent Jody Weis would be replaced.5. The White Sox (who finished with a record of 79-83) would win more games than the Cubs (71-91).6. The Blackhawks would not repeat as Stanley Cup champions.

On six other questions, readers and I were both wrong:

1. That the U.S. Supreme Court would uphold a federal court ruling in California that same-sex couples have the right to marry (the case hasn't made it to the high court yet).2. Former Bolingbrook police sergeant Drew Peterson would be convicted on charges he murdered his third wife, Kathleen Savio (the case is still in pretrial stages).3. Mark Grace would replace Ron Santo in the Cubs broadcast booth (it was Keith Moreland).4. Newt Gingrich would not make a run for the presidency.5. All of Chicago's major pro coaches/manager would keep their jobs (White Sox manager Ozzie Guillen and Cubs manager Mike Quade are out).6. The owners of Chicago-based Groupon would come to regret not taking Google Inc.'s reported $5 billion-plus buyout offer in 2010 (though regrets may still be in the offing due to Groupon's shaky business model; right now the company's value on paper is around $14 billion).

On four of the questions, readers were right and I was wrong:

1. That President Barack Obama would not drop his long-standing opposition to gay marriage (even though polls now say most Americans support the extension of marriage rights to same-sex couples, Obama hasn't changed positions).

2. Jurors at former Gov. Rod Blagojevich's second trial would deliver a mixed verdict (they found him guilty on 17 of 20 counts; I predicted he'd cop a plea before trial, which he really should have done).

3. Approval of the new health care reform law would still be under 50 percent (the highest "favor/support/good idea" number I can find in recent polling is 38 percent).

4. The Bears would win one game in the NFL playoffs (I wrongly predicted they'd lose to the Seahawks in their first game).

And on two of the questions, I was right and readers were wrong:

1. That Obama's average approval ratings would be below 50 percent at the end of 2011 (recent RealClearPolitics reports put that average at 46.8 percent).

2. Chicago would get the go ahead to start building a casino (authorization to expand gambling in Illinois remains trapped in a legislative web).

Overall score: Readers 10-8, me 8-10.

In other words, if you were seeking an accurate forecast for 2011, you likely would have done better consulting dart-flinging monkeys than consulting me.Nevertheless.Recently, I asked similar questions about 2012 and received more than 1,300 responses — roughly twice the number who voted in last year's poll.Results show readers and I are in agreement that:

Angry Birds Developer Rovio Is Growing Faster Than Zynga

With American casual game publisher Zynga preparing to go public with the gaming world’s biggest IPO in quite some time, Finland’s Angry Birds game maker Rovio is conquering the world. In fact, Rovio Chief Marketing Officer Peter Vesterbacka recently turned down a $2.5 billion buyout offer from the Farmville publisher because Rovio is growing faster than Zynga.

While Zynga relies on Facebook and casual online games for its business model, Rovio has embarked on a global merchandising blitzkrieg that has never been done by a small independent game developer. Walk into any store and you’ll find Angry Birds clothes, Halloween costumes, iPad covers and plush toys. The company expects to sell 20 million Angry Birds toys this Christmas alone, and that number is so low because they can’t keep up with demand. There’s even an Angry Birds cookbook.

With over 500 million downloads of the casual mobile and online game franchise, Rovio is also aligning with major brands like Wonderful Pistachios, Google Chrome and 20th Century Fox. The Angry Birds are currently playable in a new Hunt for the Golden Pistachio game, which offers real cash and prizes to those who explore the new Google Chrome game. It’s the next iteration after the successful Angry Birds Rio game tied into the April 3D movie, Rio. The Angry Birds are also going to the big screen in their own 3D feature film produced by former Marvel head David Maisel.

Andrew Stalbow, Rovio Entertainment’s General Manager of North America, talks about the company’s marketing plans in this exclusive interview. Stalbow previously headed up Fox Digital Entertainment and worked with Rovio on the Rio game marketing initiative.

How does this new deal with Wonderful Pistachios fit into the overall brand marketing that we’re seeing with Google Chrome Angry Birds TV commercials?

We have a great relationship with Google and thought their spot had a terrific sense of humor. We want to both surprise and delight our fans. A great example of that is the cookbook that has just released into the U.S. market – Angry Birds: Bad Piggies Egg Recipes. And whilst it’s not necessarily the first book people expected to see from us, eggs are obviously a key part of the game, and we felt cooking was a great family activity, so it seemed a great place to start our physical books business.

Angry Birds shirts are literally everywhere today, can you talk about how many products you’ve rolled out in the US so far?

We have a top-selling toy on Amazon with the Angry Birds: Knock on Wood game which we worked on with Mattel. We’re selling over 1 million plush toys every month. We have apparel in stores like Walmart and JC Penney. We have three new books in stores now – the cookbook and two doodle books . We had the number one “most searched for” Halloween costume. We are bridging the digital and physical worlds, something we’re focused on delivering more of in 2012.

Why do you think more game companies haven’t taken advantage of merchandising like you have?

Some games have reach and engagement, but haven’t necessarily created a brand that can extend to other products. We believe that over the next few years more and more IP will emerge from connected devices like smart phones and tablets, and we have a great opportunity to stay at the forefront of that.

What role have these various IP deals and merchandising played in getting more people to try out your game?

It’s a virtuous circle for sure. We are focused on delivering a great experience on every platform, which is fundamental as we continue to evolve our brand.

Salman Rushdie Joins The Facebook Wall Of Shame

I’m a privacy pragmatist, writing about the intersection of law, technology, social media and our personal information. If you have story ideas or tips, e-mail me at . I’ve hung out in quite a few newsrooms over the last few years. Most recently, I was an editor at Above the Law, a legal blog, relying on the legal knowledge gained from two years working for corporate law firm Covington & Burling — a Cliff’s Notes version of law school. In the past, I’ve been found slaving away as an intern in midtown Manhattan at The Week Magazine, in Hong Kong at the International Herald Tribune, and in D.C. at the Washington Examiner. I also spent a few years traveling the world managing educational programs for international journalists for the National Press Foundation. I have few illusions about privacy — feel free to follow me on Twitter: kashhill, subscribe to me on Facebook, to Circle me, or to use Google maps to figure out where the Forbes Washington, D.C. bureau is, and come a-knockin’.