Gio penned a great piece the other day, regarding Groupon, RLOC and OPEN. If you’re not reading his blog, you need to do so at once, for he is a sharp guy. His post got me thinking about social networking, with regards to investing, and then it hit me: holy shit, we are building another kick-ass bubble. This time, after the bubble pops, we don’t get to walk away from it. However, the great part about bubbles is they can last a long time, so let’s play.
At 50 billion dollars, Facebook is valued at 25x sales. That’s right, I said “25.” If this is the “new norm,” then everything in its genre goes up. Ancillary stocks, like OPEN, RLOC, LOCM, VCLK, QNST, ACOM etc. will be bid up. Once Groupon and Facebook come public, investors will run, mind you, into these stocks, in addition to many others. I will be doing extensive research on how best to play this bubble. Stay tuned.
As an aside, the ADP employment numbers of 297k new jobs is staggering and is a game changer. If the official Government numbers match these numbers, GDP numbers are going way the fuck up and we are on the precipice of a significant break out, for the economy, to the upside.
Bottom line: Until these numbers are debunked, this a long only market.
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We’re going to export waiters and bus boys to China?
and burger flippers…. we have to show the chinese how to flip burgers don’t ‘ya know.
They will take our burger flipper jobs too.
If the U.S.Congress and Regulatory Regime (read: the Exec) keeps making it difficult to employ actual living breathing people, we will eventually have all of our burgers flied (sic) up in Chiner, boated over (six weeks) and sunsequently redistributed via efficient robot matrix at your local MacD’s.
The taste will differ not at all.
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I’ve been thinking about this stuff for the past few days.. or week. The consensus view as i see it is that the economy grows at around 2.5 ish% for the year with a few problems coming along such as not being able to fund the deficit, Europe , china and such.
This got me thinking.. the real consensus is up small to slightly downbeat for the most part and the expectation is for stock to do fine.
What happens though if the US has some serious kickass GDP numbers at around 5% and the deficit although big looks like coming in some and the GOP congress makes proposals to close that even further. add the real estate market stabilizes…
That’s the tail risk in my mind and it would blow the bubble up hugely. Stocks would rocket.
Second that. (Although deficits don’t matter in this balance sheet recession.)
Energy prices would be the catch. Oil and gasoline would rocket on such numbers putting a serious crimp on consumer pocketbooks.
Yea reasonable point, however US gas demand is actually falling due to better efficiencies.
FB is the next GOOG. The difference is FB know their audience whereas GOOG can only guess. Therefore FB can charge higher ad fees. If the revenues will be the same or bigger, remains to be seen. One thing certain is that FB has a superior business model vs. GOOG.
But whats the model: people sticking their silly pics on the website?
It’s an official “Big Brother model”. They KNOW who you are, what you do, what your preferences are. Therefore can target ads much better than GOOG. Think satellite-guided nukes vs. air-dropped bombs Hirshima style. That’s the difference.
oh okay thanks
The above was directed to J. Sorry.
Duh. Don’t you understand yet. They sell you and all your information to the highest bidder. The consumer has become the commodity.
The difference is goog gets big $ for their ads and directed search. Facebook has a problem monetizing their page views.
It’s all about the data.
Here’s the interesting thing… state governments are another collector of data that would be very interesting to marketers.
Companies that can help them monetize that data for commercial sale will make Facebook look pikerish in comparison.
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How real is the interest in Citi in that institutions will be forced to buy the stock at 5 bucks onwards because this could be the mini version of the 100 buck roll.
Have you been hanging out w. Hank Moody? It seems your Queen’s Engrish has degraded.
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lol… who’s hank moody
He’s the Ozzie asshat that’s been posting here lately, under the auspices of a Big Swinging Licorice Stick, DownUndah-style.
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Facebook is WebVan…I’ve seen this movie before, I was there. Facebook may fail before coming public as its buzz peaks..if it does go public, I think it will make a great short.
You are probably wrong because I agree.
Thats what they said about Google before and after it went public. Facebook is no joke.
Golden Slachs bought in at a $50bn valuation.
For $500 mm.
That’s pretty strong. Obviously, they believe Facebook will factor into their world-running plans in future….
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Facebook is here to stay.
It’s rocket-fuel for narcissism. It allows people to create their own identity, however displaced from reality it might be. Once people have shown the world their manufactured identity – not the “real them” but the “them” they want everyone to believe they are – they will never be able to live without it. Their real identity is not nearly as cool, friendly, fun, talented, witty, enthusiastic, exciting, sexy, or generous as their Facebook identity.
And It’s not going to peak like MySpace; it’s the final draft of that medium.
I don’t understand why Myspace failed and Facefuck succeeded? More accurately though isn’t this junk whimsical and the next best thing could roll it over?
No. It’s the same reason you search with Google and not AOL search. Facebook got the formula right.
I think this is the first time I’ve ever agreed with you!
Myspace was programmers’ child. Facebook–social engineers’.
facebook started like napster. Just on the other side of the Charles river.
A $50 Billion private equity valuation to post pictures and say, “I am sitting on the toilet”…put your post-IPO order in.
Sorry, its more than pictures… its information – vital information.
Eggsactly.
Think of bots sifting through the data you provide for free. Even in your example… what magazine are you reading on the john? What about your choice of teepee? Fluffy? Scratchy?
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Yea but how do you capture that for the 500 million narcissistic fucks that are on it. Is it a sorta jazzed up key word search thingi?
Facebook has the capacity to become America’s top medium for communication – not just social media – but any communication. It’s the top visited website in the world. It has countless pieces of information on every single user, and that’s before they post anything. And people are addicted to it. Nobody is addicted to Google. People wake up in the morning and the first thing they do is check their Facebook. I know many people in this boat. Maybe because I’m 27 and my generation is the first to swallow fb hook, line and sinker.
fair enough.. I don’t use it and never plan to, so I have no real idea.
But where is all the useful information .. like what exactly?
The Check-in feature is great. It lets people know you’re across town having a burger so they can come rob your house.
In your profile, “apps” you add (like Movies, Travel, etc…), in your “likes” of certain pages/events/people/posts. Shit, I even played with changing my status to single/all complex/married/ to track what ads FB would show me (got tired of personals and wanted a shift towards strip clubs/poker sites/Scotch brands. It worked. Not 100%, but that’s a matter of time.
There’s one problem with FB though, is that over the last year they (probably to increase capitalization) were enticing users to add as many friends as possible. And some “social sluts”, having more than, say 150-200 friends, couldn’t get the privacy they needed for their inner circle, and so their usage started to drop off. That’s when FB introduced “groups”. Don’t know what this will lead to, but at least that was a correct business move. Also, FB probably signed deals with online media. Now practically on every newssite/blog they show how many “like” this page, who commented, recommended, etc. It all expands the social web, reinforcing the network effect and also helps to increase valuation.
BTW right before Christmas AMZN offered me to check out wish lists of my FB friends. I knew you could always find them on Amazon, but that needed to be a targeted search. Now the system just suggests it to me when, for example, a friend’s birthday happens to be next week. Very clever businesswise, both for FB, and AMZN. Synergy as it should be.
People used to be addicted to Yahoo…before that it was Alta Vista.
On the contrary, I think facebook’s popularity is peaking.
A lot of parents are now joining facebook, that combined with anything social and kids will find the next trendy online hang out.
I would even say it was children who started using google before adults.
They ain’t gonna make a lot of money knowing my favorite rock band or tv show…and people will continue to protect their privacy, or lie about it.
Remember, on the Internet, no one knows you’re a dog!
Woof.
That’s the thing. It’s not Intermet, that’s your “Closed home network”. See the difference?
if you think about it,it reminds me of the phone and phone book reinvented,from like the days of a party line.if anyone here remembers what a party line used to be.i’m not talking about those conference call type of dew-hickys where 5 or more people chat,when there used to be chat lines on the phone before internet..in my whole life,i have never seen so many people preoccupied with the reinvention of the phonebook, a bunch of sheeples making the telecoms rich,an no one else. if every person stopped gabbing for a week, they prolly crash the telecoms.50 bil valuation of fb………..welcome to fantasy island,lord blankenfien,da plane,da plane
Careful of the Kool-Aid…next thing you’ll tell me is, “It’s different this time.”
ADP was good but not great becaause 270k of the 297 were service jobs. Not that impressive when you break it down.
Basically Walmart hired a bunch of fat pigs to sell Chinese crap for the holidays.
Troubles are brewing in Europe.
Bad Portugese debt auction and the Swiss told the Irish banks to fuck off.
WalMart has doubled the number of “greeters” at each store.
If you think about it… Wal Mart is doing more than social security for the elderly. All those people who “forgot” to save for retirement now find themselves wearing a smilely pin and a silly hat saying “hello and goodbye” to all the Wal Mart shoppers.
Sure beats Grandpa living in a cardboard box.
A cool job at WalMart would be getting the outside carts.
They have a nice machine to steer a long train of them into the store and it looks like fun.
Just remember to wipe clean the seat in the cart.
Lots of dirty diaper action went on in there.
True, and they also have plenty of cardboard boxes out back with which to house their greeters.
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This freaking blog is fucking “hairlious”. The cynicism just oozes outta the screen.
Like the QNST.
I is a bear for the day.
Chips blow, MSFT,ORCL,GOOG can’t get traction and AAPL is spinning in neutral after the 500th upgrade today.
Fly, outside of your OXY, I’m wondering what the situation on riggers and drillers will be 2011 in the gulf?
RIG, MMR, OII, HERO, HOS etc.?
Mostly bad. Costs are waay up. Only the cream of the crop prospects will get drilled there now. There’s an added PR risk factor compared to a year ago. There are better places for O&G returns around the world.
Dont forget shit like WEBM, STVI, SPMD and DEXO, the latter 2 being Groupon type plays.
The first two are the only 2 publicly traded Facebook related companies that i know of. Please educate me if there are more.
I am building an index inside PPT
The FlyDex 100?
Flybook.
You do that i might just join.
WWWW tangentially related, website builder for small biz
Forgot to add TZOO to that list. STVI is a pinksheet also. Match.com of FB.
Groupon just bought a start-up company I used to work for – Ludic Labs. It was a social networking software company. The site was called Didit. Groupon is in acquisition mode.
SSW on the move
Indeud … have it on my watchlist along with BOX
SHZ filed a 50mm shelf, that effectively doubles the 5mm share float. Short this and MCP.
Insiders of MCP will be unleashed late this month … a good short indeud!
i love this site. thanks Fly
to the people claiming FB is the next best thing:
you are so stupid that you don’t even realize that you’re the ” dumb money “
Are you fucking stupid? Noone said it was the next best thing. We said it was a way to make money.
Now go fuck a duck.