FaceFisted
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-07-27 10:10
by Karl Denninger
in Company Specific
Ignore this thread
FaceFisted
 

That will be that.

The company has mobile "users" but nobody has ever managed to make advertising work on a mobile platform.

It's my bet that they never will either.

Look, advertisement is what makes The Market Ticker worth running.  I'm a journalist, at the core, when it comes to this publication, and guess how publications make money?  They sell ads.

I don't mind them on my desktop or laptop computer.  But on my phone I will go to quite a bit of trouble to not see advertising, because it takes up valuable space on a small-screen device.  Further, on a mobile device I'm paying for the content to come down in one form or another and I'll be damned if I'm going to pay for "rich content ads" to be sent to me whether I want them or not.

Finally, the small screen means that the amount of space that can "catch my eye" without radically deteriorating my user experience is almost zero.

Add all this up and the fact of the matter is that I believe Facebook's model is terminally broken and always has been.  Add to that Zynga's implosion (who thought that buying virtual farm tractors with real money was a business model?) and you have an utter disaster in the making.

Those who were foolish enough to buy this company's stock have seen a roughly 50% fall from high to low, with 15% coming today after earnings.

As for my price target on the company I will simply note that there is very strong technical support at $0.

Disclosure: I was not dumb enough to be in the position to have to say "ouch, my ass!" last night and I hope you weren't either.

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End_the_bubbles
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The New 3rd World
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I was thinking Face****ED, but hey, you've got to keep it PG I suppose.smiley

Take a look at GDOT today as well! Yet another SCAM brought to you by GS!

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In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant's feet and rise in rebellion to overthrow their masters.
Azengrcat
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HUBRIS.
Madashel
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Green A True American Patriot!
Gone
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I still cannot wrap my mind around the fact that facebook is even a stock and how anyone could take it seriously as such. The whole site is not worth 5 cents in my book. I figure a child's coloring book is worth more. It's a direct reflection of how idiotic our country and humanity in general has become. What a sick joke.

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I know not what others may choose but, as for me, give me liberty or give me death. - Patrick Henry
Trades50
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Silver
Land of Tax and Spend
Online
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Their determined to make it In-Your-face-book.

Notice how Yahoo and others are trying to force people to use Facebook?

Wall Street is determined to make Facebook a viable business. For In-Your-Face-book to slide was an embarrassment for the MMs


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When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson

Bertdilbert
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Quote:
As for my price target on the company I will simply note that there is very strong technical support at $0.


smileysmileysmileysmileysmileysmileysmileysmileysmileysmiley


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Dear Euroland: Relax, Germany has a plan for your money!

Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
Hogman
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I always questioned how they have a two letter ticker symbol

And yes I refer to it as face****
Ben
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Silver
The Distant, Glorious, Past
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If ZNGA is 12.5% of FB's revenue and ZNGA is market cap'ed at 2.30Bn, then FB would be, at most, 8 x 2.30 = 18.4 / 49.17 X 23.00 = $8.61.

Gut level that figure seems more likely for FB valuation.

1.18Bn/QTR revenue and a market cap of 17Bn.

I know, KD thinks it's a zero.

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"Why are you going to learn French?"
"Because I'm going to France," says Joe.
"I'm from the future. You should go to China."

Crossthread
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*Zucker Rolled*

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“Cognitive Co-Dependency” is when a normal rational person, internalizes irrational illogical presentations, and somehow reconciles them to fit their scripted indoctrination of logical analysis.
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Striker754
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got a nice 120% gain from those puts I bought at the close yesterday. Gotta love it. OTOH, AMZN, terrible results and up 6% LOL
Crzymorse
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Hard to root for Facebook isn't it.
Southbayhombre
Posts: 92
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Gold
Los Angeles
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Up 50% on the Oct 2012 puts I too bought at the close yesterday. Now the decision.... Do I hold until after the next quarter tanks, or sell now and take my 50%.

Gen, with legs like those, I may hang on for the rest of the ride!
Poodlelover
Posts: 152
Incept: 2012-02-02

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Their current stock valuation to my simple math demands that they have around 4-5 BILLION users in the relatively near future, not the 1 billion they currently have. Yesterday it was trading at a P/E of 70 and yet when one looks at the revenue, user growth, employee growth over the past year, these are all fairly lockstep (though, negatively, employees grew at a greater percentage than revenue or users). To bring their earnings up by 4-5 times to defend their current valuation they need BILLIONS more users than they have now.

Who here thinks facebook will grow 30% in users over next year like they did this past? I don't think they will.
Dazedncornfused
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I use a Symbian phone with the lean Opera browser (mini micro fast version? dunno) that strips all ads, with the downside of using their DNS. No ads ever at all.

I wasn't going to say this, but since your site now has an invalid cert I will. All you need to kill adverts is a proper HOST file. The Android/Linux phones will let you install one, iPhone ferggetit. Any HOST file should exceed 15000 lines. Use it.

MarketTicker has ads? Who knew? When did that start? Why didn't anyone tell me?

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Stand up and be counted or line up and be numbered.
Genesis
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Admin A True American Patriot!
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Actually, my site doesn't have an invalid cert. I turned on SSL for logins to improve security, but if you sign in from the Ticker (instead of the forum) you get the warning.

I'm going to turn it back off until I can get the transparent forwarding working sufficiently well to stop that (which I can do, I think.)

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Rbarreira
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Quote:
Look, advertisement is what makes The Market Ticker worth running.


So why did your site updates the other day say that people who don't donate are basically leeches?

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Ghopper
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How many of those 'new' mobile users are just existing desktop users?
Wearedoomed
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On top of that, how many accounts in general are unused or dupes?

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Lies, all of it.

Genesis
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Quote:
So why did your site updates the other day say that people who don't donate are basically leeches?

The Ticker is not the forums.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Dazedncornfused
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>How many of those 'new' mobile users are just existing desktop users?<

There's the question that drives nuts the purchasers of web ads.

Firefox has the User Agent addin. It fakes anything, including mobile phones. Amazon isn't fooled by it and I doubt this website is either. NY Times, DetNews, ChiTrib, Google often, they should send their programmers back to school.

Back on topic, FaceCrock formats pages dependent on the User Agent I'm broadcasting, including changing it within the same login. I recommended to my employer that FB isn't the best way to get the word out, especially if we have to send a check...

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Stand up and be counted or line up and be numbered.
Irishblues
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Wearedoomed wrote..
On top of that, how many accounts in general are unused or dupes?

A crapload of them. The duplicates are not the problem - in fact, I can make an argument that duplicate accounts generate much more of the actual revenues in the form of buying useless virtual crap and ad clicks. The unused ones, ... well, they do nothing except eat up space on a server.

One other thing I'm starting to hear more about: FB is starting to get more aggressive about weeding out possible duplicate accounts and cracking down on "you're only supposed to 'friend' people who you actually know, not people you need to play some game - and that's a violation of our TOS" stuff. The "you have to go 'friend' someone for some game" thing is is important to the subset of people who play games on FB that rely on having numerous others you know playing, but only have 1-2 actual ones that might be interested. Why this matters to FB, I really don't know - especially if my theory about duplicate accounts actually generating more revenue is correct. I just know that I have friends who play games and are getting increasingly*****ed off with FB for the crackdown as described above. Needless to say, that's not a positive long-term.

I also know that there are more and more accounts popping up to tout sex [which is also allegedly a violation of the TOS, but thus far have been completely ignored]. Draw your own analogies to MySpace as needed.
End_the_bubbles
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Just had a huge 10% rally off the lows.

The 24 weekly calls were a solid 10 bagger in 1 hour!

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In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant's feet and rise in rebellion to overthrow their masters.
Ahhz
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Irishblues wrote..
The "you have to go 'friend' someone for some game" thing is is important to the subset of people who play games on FB that rely on having numerous others you know playing, but only have 1-2 actual ones that might be interested.


Here is a comic that somewhat explains that:

http://penny-arcade.com/comic/2012/07/27

Disclaimer: I play computer games, but do not have a FB account nor want to play FB-style games
Mdporter
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San Jose, CA
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When you see ads on your mobile device, you data plan paid for downloading them.

Same with ads on cable TV (you paid for it)

Same with ads on the internet (you pay monthly for that).


Remember that ads were originally for free TV and free radio, because you didn't pay monthly fees to watch OTA TV or listen to radio. Aside from the device costs the programming was truly free to view, you just had to put up with advertising.


Plenty of FB users have multiple accounts, mainly to feed their stupid video game addictions and to cheat on their spouses. These people would be so much better off if they turned off their computers and went and played outside with real people.
Musicandnature
Posts: 2002
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Gold
NJ
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wow etb, did you buy the drop ? yur balls be as big as Gens..

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Since it costs a lot to win, and even more to lose, You and me bound to spend some time wonder'n what to choose. Goes to show, you don't ever know, watch each card you play and play it slow...Wait until that deal come round, don't you let that deal go down, no no. Garcia/Hunter.

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