“There must have been some sober second thoughts about this,” said Brian Wieser, an analyst at Pivotal Research Group who was first to come out with a “sell” rating on Facebook's stock on Friday.

 

Daniel Ernst, principal at Hudson Square Research, said he still thinks Facebook is “a fantastic company.”

 

“Fifty-three percent operating margins, 901 million users around the world. … They can provide detailed targeting to advertisers,” he told CNBC. He noted that many investors want to own Facebook’s stock, but for some the stock’s multiple -- a method for valuing companies and their stocks -- is too high.

 

Market Day - After Facebook IPO debacle, finger-pointing begins

I have been a mutual fund kinda of guy so this isn't my area of expertise by any means so I am wondering what some of our more savvy stock market people think about the Facebook IPO and the falling price?

It's a pattern that has been repeated before with tech IPOs. Let's give it several weeks and see what happens. Remember it's also in the midst of a falling market. We've lost several hundred points recently.

For one , it's expensive. Very high P/E. Some stocks can get away with that. I think Google had a high P/E when it went IPO but I think people got Google's business more than they do FB. FB model is not traditional advertising. GM backed out last week which shows they don't get it either. Ford, on the other hand, is in big time and made a commitment to social media advertising last week.

 

I think FB is going to be a good business over the years. It's just expensive right now.

For one , it's expensive. Very high P/E. Some stocks can get away with that. I think Google had a high P/E when it went IPO but I think people got Google's business more than they do FB. FB model is not traditional advertising. GM backed out last week which shows they don't get it either. Ford, on the other hand, is in big time and made a commitment to social media advertising last week.

 

I think FB is going to be a good business over the years. It's just expensive right now.

What would you say it has to get to be where you believe it should be?

What would you say it has to get to be where you believe it should be?

 

I'm not that smart. I think you can make money long-term with it at today's price. You will have to loooong though.

 

Companies are going to go where there are 900 users and many of those users spend a lot of time on the site. Companies just need to figure out that advertising in social media is more about connecting and relationships than it is with a "good deal." GM IMO looked at it the same as they do with throwing a huge ad in the Sunday Enquirer. They want fast results. That's not how social media works.

 

When companies figure out how to connect they'll get the results.

Note:

 

Apple's P/E is about 13.

Facebook's is about 108.

 

P/E is a measure of stock price to earnings per share.

I'm not sure I'd refer to this as a "debacle." FB has a $72B market cap. They've got a lot of money to to work with.

I'm not sure I'd refer to this as a "debacle." FB has a $72B market cap. They've got a lot of money to to work with.

 

I went with the headline provided but tend to agree with you it is overstated.

The debacle is how the IPO was handled. NASDAQ really screwed it up and some of the confirmations for the executions just hit the buyers accounts today. Many people overbought their accounts because they tried to cancel their orders and place it again because they didn't get a confirmation. Stock is on the high end of their initial IPO guestimate of 28-34.

Think of P/E as how much money you'd pay for $1 of earnings. For instance, if Facebook's P/E is 108, then you're paying $108 for every $1 in earnings. That's the best way I can explain it. Any valuation I've looked at has told me to stay away for a while on this one. I am not at all interested.

Think of P/E as how much money you'd pay for $1 of earnings. For instance, if Facebook's P/E is 108, then you're paying $108 for every $1 in earnings. That's the best way I can explain it. Any valuation I've looked at has told me to stay away for a while on this one. I am not at all interested.

 

Agreed.

Investors file lawsuit against Facebook, Morgan Stanley - May. 23, 2012

According to a report published by Reuters, Morgan Stanley (MS, Fortune 500) shared a negative assessment of the social network with major clients ahead of Facebook's (FB) IPO, which debuted last week.

 

"We believe the lawsuit is without merit and will defend ourselves vigorously," said a Facebook spokesperson to CNN.

 

People on Wallstreet screwing the little guy, I'm shocked.

So............................................When can we expect the BGP IPO to be forthcoming?

So............................................When can we expect the BGP IPO to be forthcoming?

 

Is there still such a thing as penny stocks?