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Cheesemaster200 posted:I always thought cash flows were an overrated way of valuing a company to be quite honest. This value/customer method really saves me a lot of time loving around in spreadsheets. Well, # of users worked great in 1999.
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May 21, 2012 19:50
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Cheesemaster200 posted:I always thought cash flows were an overrated way of valuing a company to be quite honest. This value/customer method really saves me a lot of time loving around in spreadsheets. I heard an 'analyst' on NPR arguing that $100/user for facebook was really low because they had the lifetime of the user to extract that value from them, and they should surely be able to figure out how to get $100 per user over the next few decades. Who actually believes there is a decent probability that facebook will have a billion active users 20 or 30 years from now, still playing the poo poo out of farmville?
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May 21, 2012 19:57
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Cheesemaster200 posted:I always thought cash flows were an overrated way of valuing a company to be quite honest. This value/customer method really saves me a lot of time loving around in spreadsheets. Cash flows are very good tools for certain industries where high depreciation and amortization pushes profits down. Cable is a great example of a business where the high upfront costs hamper profits but lead to huge cash flows.
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May 21, 2012 20:22
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Baddog posted:I heard an 'analyst' on NPR arguing that $100/user for facebook was really low because they had the lifetime of the user to extract that value from them, and they should surely be able to figure out how to get $100 per user over the next few decades. I don't think anyone believes that. I think they believe that Facebook has a good chance of insinuating itself as the planet's defacto web portal. Being the hot gatekeeper to content has always been rewarded by investors, which is now benefiting Facebook like AOL, Yahoo, and Google before it. If you read the poo poo Zuckerberg says in his speeches and press releases, it's pretty obvious that the company exists solely to bet on the idea that in the future, all search will essentially be social; if you want a recommendation for a good place to ski in Tahoe, or where to eat in Thailand, or information about a protest in Tibet, you will turn to your social network for an answer instead of a robot like Google.
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May 21, 2012 20:30
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I've used facebook for probably 7 years now, and I've never clicked on an ad. Then again, the only ads I ever see are "Instant approval military loans" and "Meet single military girls", as if either of those are desirable. Anyway, the point I'm getting at is unless they get paid per impression, I've only made them lose money. The only way they're going to actually make money is to make the ads obstructive, or by selling data for personalized ads to partners like microsoft's Bing, the way google wants to use google+. Either way will make people stop using the service.
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May 21, 2012 20:33
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Are there good resources for finding out which companies manufacture... things? Like, if I wanted to find out more obscure things like "Who makes the cameras they put on Predator drones?" or "Who produces the foam used in office chairs?", is there a simple way to do that or do I have to wade through pages of Google search results?
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May 21, 2012 20:37
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Baddog posted:I like seeing what other people are trading, no matter what they base it on, its fine man. Just wanted to be sure you had heard at least one contrary opinion before putting a ton of time in. I ended up buying a used one anyway. Hedge fund didn't work out, I quickly learned the lesson that actively trading while trying to juggle a day job and a newborn at home just wasn't a great idea. Then I got bored with the markets and focused on just living light. Looked at my net worth and saw how much awesome debt I had. Sold my overpriced car and working it down. But it's cool if you really want to take a jab, I earned it for all the poo poo talking I did back in the day. Also, it's SA so it'd be cool.
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May 21, 2012 20:39
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bam thwok posted:I don't think anyone believes that. I think they believe that Facebook has a good chance of insinuating itself as the planet's defacto web portal. Being the hot gatekeeper to content has always been rewarded by investors, which is now benefiting Facebook like AOL, Yahoo, and Google before it. If you read the poo poo Zuckerberg says in his speeches and press releases, it's pretty obvious that the company exists solely to bet on the idea that in the future, all search will essentially be social; if you want a recommendation for a good place to ski in Tahoe, or where to eat in Thailand, or information about a protest in Tibet, you will turn to your social network for an answer instead of a robot like Google. The WWW was just invented 20 years ago, and didn't even have a gui yet. Facebook might usurp google as the defacto portal for a period, but to believe that it can hold onto that position for a period of time on the order of decades, and to justify their valuation based on that, is pretty far-fetched.
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May 21, 2012 20:39
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evilwaldo posted:Cash flows are very good tools for certain industries where high depreciation and amortization pushes profits down. How exactly do you justify Apple's valuation then, if not for its massive cash flows? A company is always going to be valued on how much money it is going to make in the future. A high-capital cost business like a utility is going to be easier to predict these cash flows, making analysis much more accurate. However cash flows are still what dictates every company's valuation, at least assuming a rational market. Also, saw this article: http://online.wsj.com/article/SB10001424052702303610504577417911775222058.html?mod=WSJ_hp_LEFTTopStories People are apparently pissed that they didn't make a risk free 15% overnight, and are now trying to blame everyone but themselves for buying into the ridiculous initial valuation. JP Morgan's job was to raise as much capital for Facebook as it could, not to appease ravenous day traders trying to make an easy buck.
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May 21, 2012 21:15
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Baddog posted:The WWW was just invented 20 years ago, and didn't even have a gui yet. How is that different from valuing any other company? Is Toyota's valuation too high because one day GM could sell more cars than them and they won't be number one any more? Of course not. Their valuation is based not only on their eminence and their ambition but on their ability to continually innovate and compete. Same principle with FB.
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May 21, 2012 21:29
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Cheesemaster200 posted:How exactly do you justify Apple's valuation then, if not for its massive cash flows? A company is always going to be valued on how much money it is going to make in the future. A high-capital cost business like a utility is going to be easier to predict these cash flows, making analysis much more accurate. However cash flows are still what dictates every company's valuation, at least assuming a rational market. Apple is a different animal due to its high stock price. When stock prices get into the triple digits it deters a lot of retail investors due to the large stock price. You get the same thing with gold to an extent where the high price makes people consider silver because they can buy more ounces for the same money. It ends up being a psychological thing. Google is in the same boat. I have no doubt if both companies split 10:1 their share prices would double in a year. Facebook is funny to me. The valuation was never created by the investment banks. It was created last year in an illiquid market with no financial statements available to investors.
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May 21, 2012 21:50
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bam thwok posted:How is that different from valuing any other company? Is Toyota's valuation too high because one day GM could sell more cars than them and they won't be number one any more? Of course not. Their valuation is based not only on their eminence and their ambition but on their ability to continually innovate and compete. Same principle with FB. Big difference here is Facebook isn't the defacto portal but is valued as such. Toyota is valued where it is because it's already proven itself in its market. Also FB is still valued in a way that assumes they dominate another area, so that's like valuating Toyota on their future successes in the soda market.
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May 21, 2012 21:59
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Isn't part of the high valuation of facebook not just the one billion users thing but the idea that with their capital they will become like google and acquire more online assets and services (like how google purchased youtube)? I dont think that justifies the valuation I just think I heard that was part of the reasoning.
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May 21, 2012 22:06
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bam thwok posted:I don't think anyone believes that. I think they believe that Facebook has a good chance of insinuating itself as the planet's defacto web portal. Being the hot gatekeeper to content has always been rewarded by investors, which is now benefiting Facebook like AOL, Yahoo, and Google before it. If you read the poo poo Zuckerberg says in his speeches and press releases, it's pretty obvious that the company exists solely to bet on the idea that in the future, all search will essentially be social; if you want a recommendation for a good place to ski in Tahoe, or where to eat in Thailand, or information about a protest in Tibet, you will turn to your social network for an answer instead of a robot like Google. FB would need a massive amount of data to get the ski recommendations or restaurant recommendations working, far more than what they have, as you would need it already available since most people don't want to wait for a social answer to filter back to them. Only real time info is valuable in a social network to the users, but it isn't so much to advertisers as most real time event searches aren't monitizable in the same way a search for restaurant info is. You might think that FB can crowd-source info for searches, like Yelp or Urban Spoon, but trying to move into another vertical with stiff competition isn't that easy as proven by things like G+ against FB. A lot of people seem to assume that because FB has a lot of users they can get those users to do other more valuable things, but most websites have huge problems moving users over to other verticals (hence why google abandoned google video and bought youtube). The only thing that FB has done really well in terms of leveraging their userbase is creating the app market on facebook.com, but that's limited since you can only have so many apps pushing notifications to users before people become unhappy with it. Also there's the obvious problem that when companies that use your service get large enough (Zynga) they are going to look for ways to break off to avoid your fees (see: Zynga's move into mobile and their own website).
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May 21, 2012 22:14
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Xenopax posted:Big difference here is Facebook isn't the defacto portal but is valued as such. Toyota is valued where it is because it's already proven itself in its market. Also FB is still valued in a way that assumes they dominate another area, so that's like valuating Toyota on their future successes in the soda market. It's not like Google got its valuation on search alone, which is why their stock hasn't shot up by infinity following the runaway success of Android. Facebook is valued by how the owners, underwriters, and market decided to price its growth prospects. You can be as bearish on it as you like, but it's not a axiomatically wrong. Xenopax posted:FB would need a massive amount of data to get...trying to move into another vertical with stiff competition isn't that easy ...Also there's the obvious problem that when companies that use your service get large enough (Zynga) they are going to look for ways to break off to avoid your fees... A couple billion dollars from going public goes a long way towards overcoming these kinds of obstacles, you know. bam thwok fucked around with this message at 22:22 on May 21, 2012 |
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May 21, 2012 22:17
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bam thwok posted:It's not like Google got its valuation on search alone, which is why their stock hasn't shot up by infinity following the runaway success of Android. Facebook is valued by how the owners, underwriters, and market decided to price its growth prospects. You can be as bearish on it as you like, but it's not a axiomatically wrong. Asking people to change habits can be like moving mountains. Google managed to monetize its searches as well as incorporate its users habits without being overly intrusive to the experience and has enhanced that experience. FB and the underwriters decided to price its growth prospects. So far, the market has rejected that pricing.
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May 21, 2012 23:32
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lightpole posted:Asking people to change habits can be like moving mountains. That's exactly the point. I have no doubt Facebook created a valuable service, I just refuse to price in future success based on users alone. They haven't exactly wowed me in terms of innovation outside the facebook platform, in fact as a developer who's used their APIs and reporting features I'm fairly unconvinced the culture there is setup to work with outside companies at all.
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May 22, 2012 01:09
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No idea of what the sale value of something like Yelp would be and I'm sure this is my personal preferences speaking more loudly than anything else (yelp owns), but wouldn't eating Yelp make sense as a big part of their ad-friendly model? I know this isn't the Facebook's Business Decisions Megathread, but I'd love to see something where smart people explain why presumably really smart people spent a billion dollars on Instagram. I don't even almost get it.
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May 22, 2012 01:25
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I don't think Yelp would bite, Google already tried down that path (and ultimately went with Zagat, which I think is an interesting move that we will see play out soon). As far as Instagram, I don't know if it's any more than "Instagram is cool, let's try and be cool again." Or even, "let's get Instagram before Google does." I mean, even Instagram didn't quite figure out how to monetize yet, so, let that be FB's problem, while Instagram goes to the bank! Great deal for them.. Andrew Mason in all his loving hubris, he really should've just taken the money from google.
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May 22, 2012 01:38
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SpaceMost posted:Are there good resources for finding out which companies manufacture... things? In my (admittedly limited) experience, looking for this info can be both horribly easy and horribly difficult. On one hand, I found that there are fairly few conglomerates supplying virtually everything: GE, Dow Chemical, Honeywell, 3M, Tyco, DuPont... Basically the manufacturing blue-chippers (and defense contractors). On the other hand, you have companies who either (a) keep the identities of their suppliers top secret, or (b) use anonymous, overseas suppliers. If you have a few specific products you'd like to trace down, I'd suggest a more targeted search: reviews (consumer goods), teardowns (consumer electronics), and whatever public info is available from marketing and PR propaganda or iSuppli/Gartner/etc. Don't know how much of this is helpful or maybe obvious... but hopefully it gives you something.
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May 22, 2012 01:40
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Any tips are appreciated! Thanks 
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May 22, 2012 01:46
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bow chicka wow wow posted:I know this isn't the Facebook's Business Decisions Megathread, but I'd love to see something where smart people explain why presumably really smart people spent a billion dollars on Instagram. I don't even almost get it. Didn't Marky Mark decide to buy it, negotiate for it, and close the deal all over the course of a weekend, or something equally ridiculous? And while I don't know exactly why he did buy it, the valuation was equally as absurd as Facebook's own. R.A. Dickey fucked around with this message at 02:58 on May 22, 2012 |
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May 22, 2012 02:55
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I've got some SIRI I bought a long time go at .99 a share and I don't really know what to do with it. Is there a reason I shouldn't do a covered call for my whole position at 2.5 for December if I don't really care if I sell it then or not?
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May 22, 2012 03:08
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R.A. Dickey posted:Didn't Marky Mark decide to buy it, negotiate for it, and close the deal all over the course of a weekend, or something equally ridiculous? And while I don't know exactly why he did buy it, the valuation was equally as absurd as Facebook's own. I hope they paid Instagram in shares of $38 Facebook stock.
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May 22, 2012 03:26
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bow chicka wow wow posted:
The way I've read it, FB knows they're vulnerable to something cooler and hipper coming along. They also know that the primary thing they've got over any other services that exist/might exist are people's giant photo collections (estimates are that FB gets 200M new photos a day / 6B a month). They also know that primary computer usage is trending toward mobile/tablet interaction, and instagram was a very popular mobile ONLY app that people seemed to like just as much, if not more than, FB's core draw (photos!). So instead of trying to compete, they bought. Yeah, instagram doesn't have any revenue, but they eventually would, and to FB it was cheaper to win this war now than fight more battles down the road.
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May 22, 2012 03:26
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I haven't really followed this thread that much until I tuned in based on the GBS thread to laugh about FB (yes I should have shorted, but so should have everyone else). My question is this, Does anyone have any idea what Bill Ackman wants with CP. As far as I can tell his company is all about divesting assets, but CP did that 10 years ago when it spun everything off. It's not even like it could be merged with one of the big 4 in the states due to protections. It doesn't fit with what I can find about his historical buying patterns.
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May 22, 2012 03:30
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I didn't think you could short on the first day.
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May 22, 2012 03:40
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Hummer Driving human being posted:I've got some SIRI I bought a long time go at .99 a share and I don't really know what to do with it. Is there a reason I shouldn't do a covered call for my whole position at 2.5 for December if I don't really care if I sell it then or not? What you should have done is bought it at $.06 when it was in danger of being delisted two years ago. Why didn't you do that.
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May 22, 2012 03:43
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Foma posted:I don't like the play, but I like the style. I think Zuckerberg is fine CEO for his company. I don't dislike the style either in concept, but in practice it seems like he really overpaid because of it (not that we have any real way of knowing for certain).
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May 22, 2012 06:30
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SpaceMost posted:Are there good resources for finding out which companies manufacture... things? This might help give a head start: http://www.barchart.com/stocks/sectors/industry.php Click on an industry group that sounds like it produces - click on a company and read the profile to get an idea if it's making and supplying products for the companies you're thinking about. Or the listings might give you a starting point for interesting companies and track down their suppliers that way. I like this site and have used it for years, but always cross reference the information with other sites and press releases - it can and will have out of date information.
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May 22, 2012 06:35
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Bought my first shares of stock yesterday! It was kind of annoying since I wanted to buy some AAPL last week, and the brokerage account finalization went through yesterday, just as they rallied a bit. I'm in the game for longer than that, so I'm not too worried, but still.Turkeybone posted:I didn't think you could short on the first day. I was wondering about that, considering the way some IPOs I remember coming out at way over value.
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May 22, 2012 15:39
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No answers yet about the bond etf TIP, but that's okay, I'll just ask one more separate question. Right now I have a personal (and kind of arbitrary) rule for risk mix: - 20-25% in savings or something FDIC-insured. - 10-15% in stocks/gambles - the rest in mutual funds I also mentioned earlier that I was not buying into the latest dip because I already hit my max based on this rule. It was a bummer given that it seems to be rebounding, but oh well, them's the rules \/ \/So I always hear the news talking about "investors rush to safe havens as uncertainty looms" blah blah, things and with supposedly low risk and low return, but still lots better return than a savings account or even a CD. 1. Is TIP a "safe haven"? I've looked at its history, and it seems unlikely that I would lose more than 5% if something really bad happened, and even then I'd probably break even with the dividends anyway. Plus I hear people talk about US bonds as a safe haven. 2. If the answer to (1) is yes, and given my desired mix of 20-25% "non-risky" savings, then would it sound reasonable to designate this ETF as un-risky enough to put some of my savings in there? The final mix would be: 12.5% in savings 12.5% in TIP 10% in stocks and gambles 65% in mutual funds Sorry for asking a third question about this situation amid all the FB madness. For what it's worth, I'm not surprised by how it went but I feel bad for people who got excited and staked a lot in it.
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May 22, 2012 16:09
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agarjogger posted:What you should have done is bought it at $.06 when it was in danger of being delisted two years ago. Why didn't you do that. I bought at .86 and sold at $2.25!!! 
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May 22, 2012 16:36
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MrBigglesworth posted:I bought at .86 and sold at $2.25!!! My dad bought  at .06 and got out at $2  Of course my dad compared buying Facebook stock today to buying Coke in 1900 or IBM in 1930 so I'm pretty sure he has no idea what he's doing. I swear I read Facebook bought Instagram because it was rumored Google was in talks with them and they didn't want to lose all those users to G+.
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May 22, 2012 19:02
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This sounds illegal. http://www.businessinsider.com/facebook-bankers-earnings-forecasts-2012-5 Edit: Nevermind, it is legal but really scummy. And another reason why you shouldn't get involved in IPOs. COUNTIN THE BILLIES fucked around with this message at 20:28 on May 22, 2012 |
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May 22, 2012 20:17
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Fascinating Q&A with a hedge fund manager who bet $100M on the FB IPO: http://www.businessinsider.com/excl...-furious-2012-5 I'm not sure what is more fascinating...insight into what was going on on the floor or how much of an idiot this so called fund manager is? Kal Torak fucked around with this message at 20:50 on May 22, 2012 |
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May 22, 2012 20:47
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Looks like Microsoft decided to get into the Social Search business too: http://www.theregister.co.uk/2012/05/21/microsoft_launches_so_dot_cl_social_network/
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May 22, 2012 20:51
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Kal Torak posted:... or how much of an idiot this so called fund manager is? Anyone can call themselves a hedge fund manager, and its pure salesmanship as to how much money they convince people to give them to "manage".
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May 22, 2012 20:58
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Say what you want about Business Insider but I think it's pretty good. So long as you understand that most headlines are huge exaggerations.
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May 22, 2012 21:19
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Kal Torak posted:Fascinating Q&A with a hedge fund manager who bet $100M on the FB IPO: No no you see... quote:This hedge fund manager requested anonymity because "I have a mortgage" and "I'm a blue collar Wall Street guy … I could lose my job if my partners found out I was talking to you." He's just like a janitor or waiter. Blue collar through and through. He is the 99% (thanks to investing in Facebook).
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