Thursday, May 24, 2012

Facebook & the Crest of Dot-Com-Bubble #2

Facebook defies logic.
If Facebook is valued at $100 billion, its valuation would be 33 times its advertising revenue, compared with 5.5 times for Google. To sustain its value, Facebook would need to grow its revenues by 41% percent per year for the next five years. That is very hard to do for any company, especially one of Facebook’s size. … Even a minor hiccup in the business model could lead to significant losses for purchasers." 
http://articles.marketwatch.com/2012-05-22/commentary/31802268_1_facebook-global-economy-black-swans/1
There's a bunch of friends and family stock in folks hands that is locked up for 6 months. You can bet they will dump. Insiders cashing out on the IPO, massive potential insider selling to come, who’s left to buy? 
http://www.pehub.com/152247/most-aggressive-ipo-insiders-selling-facebook-were-tiger-thiel-goldman-sachs-and-accel/ 
Mahendra: "Unfortunately, I don’t see any exciting future for FACEBOOK in the longer term. In fact I won’t surprise at all if FACEBOOK valuations wipeout huge in the next six year. I wish my Astro predictions came wrong for FACEBOOK because I really like Mr. Mark Zuckerberg. They need to change facebook Astro chart and that is only possible if they change the name of FACEBOOK. http://www.mahendraprophecy.com/latest-news.php?id=659
Behavioral economics is the new "psychology of denial".