Friday’s Facebook Flop Status Quo? Down Down Deeper And Down

“Fight Against Stupidity And Bureaucracy”

Way back towards the end of May I wrote a post with a big ‘F’-ing title about the greed-inspired stupidity and madness that preceded the Facebook IPO. Remember, “Furious Flabbergasted Facebook Fools Face Frightening Falls From Fanciful Flagging Financial Flotation Farce”? 

Launched at the ridiculous price of $38 a share, or about 100 times the company's earnings, the price momentarily made it to $45, but then quickly plummeted to $34. 

In my post in May I suggested that the shares were worth more like $18 a share rather than $38. As of yesterday (August 16th) the price had fallen below $20.

I'm not saying this by way of blowing my trumpet, because I now think that my $18 peg may have been rather optimistic too. Investors have by and large turned against Facebook.

Apart from the odd blip, the stock has been on a downward trend pressured by disappointing earnings and by the fact that from today the so-called "lockups" that have prevented some early Facebook backers from unloading their stakes begin to expire. This simply means they will be able to sell shares into the market and with around two billion shares eligible for a sell off between now and May 2013, with a big one coming in November, the signs for a price recovery are ominous.

In fact further falls are more than likely.

Those who can are shorting the stock like crazy. (Shorting is where your broker borrows shares which you sell immediately in the hope that you can buy them back later at a lower price.)

The number of Facebook shares on loan to short sellers has risen from 63 million a month ago to more than 93 million.

So is it a good buy now at $18? I think not. Not for a while anyhow, until these locked shares find their way into the market and the price stabilizes and that will probably be well into 2013.

In the short term the status quo is probably down down deeper and down.

Forget Facebook and enjoy some music from the 70s instead.

http://www.youtube.com/watch?v=IKe2OfXLxuc

The small print.

Fasab disclaimer: this blog post does not constitute professional advice as regards investments on the stock exchange, such advice would only be given and indicated thus if an outrageous fee were being charged and this blog is being given to you for free. Also any investor should always be aware that shares can fall as well as plummet and should act accordingly by not investing any money they can not afford to lose.

Signs That You Live In The 21st Century

“Fight Against Stupidity And Bureaucracy”

Unfortunately a lot of the things below have become true in the 21^st Century.

Number two particularly pisses me off.

Numbers five and fourteen are a poor reflection of what we have become.

And numbers twenty thru twenty-two are just plain sad. 

I hope you will do numbers twenty-four and twenty-five though!!

Enjoy.

1. You just tried to enter your password on the microwave.

2. You have a list of 15 phone numbers to reach your family of three.

3. You text your son's cell phone to let him know it's time to eat. He E-mailed you back from his bedroom, "What's for dinner?"

4. Your daughter sells Scout Cookies via her web site.

5. You chat several times a day with a stranger from South Africa, but you haven't spoken with your next door neighbor yet this year.

6. You check the ingredients on a can of chicken noodle soup to see if it contains Echinacea.

7. Your grandmother asks you to send her a JPEG file of your newborn so she can create a screen saver.

8. You pull up in your own driveway and use your cell phone to see if anyone is home.

9. Every commercial on television has a website address at the bottom of the screen.

10. You buy a computer and 6 months later it is out of date, and now sells half the price you paid.

11. Leaving the house without your cell phone, which you didn't have the first 20 or 30 years of your life, is cause for panic and turning around to go get it.

12. Using real money, instead of credit or debit, to make a purchase would be a hassle and take planning.

13. Cleaning up the dining room means getting the fast food bags out of the back seat of your car.

14. Your reason for not staying in touch with family is that they do not have e-mail addresses.

15. You consider second-day air delivery painfully slow.

16. Your dining room table is now your flat filing cabinet.

17. Your idea of being organized is multiple-colored Post-it notes.

18. You hear most of your jokes via blogs and e-mail instead of in person. (Yipes!!!!)

19. You get an extra phone line so you can get phone calls.

20. You disconnect from the Internet and get this awful feeling, as if you just pulled the plug on a loved one.

21. You get up in the morning and go online before getting your coffee.

22. You wake up at 2 am to go to the bathroom and check your e-mail on your way back to bed.

23. You start tilting your head sideways to smile. :-) 

24. You're reading this, and...

25. ...even worse; you're going to forward it to someone else.

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One Lump, Or Two With Your Coffee?

“Fight Against Stupidity And Bureaucracy”

I’ve said before in other blog posts that part of the reason for the problems we suffer these days is the direct result of the staggering number of stupid lawyers who are being allowed to qualify from our universities in spite of the fact that they are clearly unfit to hold down a proper job in the legal profession. 

Thus we have many of them turning into ambulance chasers to try to eek out a living, whilst others encourage equally dumb people into taking spurious law suits against decent people and  businesses.

The judiciary does not help by their tolerance of junk law suits and by some of their decisions, the stupidity of which take one’s breath away.

We’ve had the morons who sue people like McDonalds because they say they didn’t know their hot coffee was hot or their iced coffee was cold.

But just when you thought you’d heard it all, in one recent case a man claimed caffeine drove him to molest women.

Kenneth Sands was convicted July 3 for groping two women and three teenage girls after a volleyball game in Onalaska, Oregon, on Oct. 18, 2011.

His sorry-assed defense?

Blame it on the caffeine.

Sands, a school bus driver for the Rainier School District, attempted to argue in court that caffeine “caused a psychotic episode,” reported KOMO News. “My son-in-law and daughter have never seen that kind of behavior from myself,” Sands, 51, told the court.

This “behavior” that Sands claims caffeine induced includes grabbing a 46-year-old woman’s breasts several times during the game and later trying to grab her butt as she tried to get away; grabbing a 15-year-old’s butt outside of a bus after the game, and then slapping a 16-year-old’s butt as she was getting on the bus. Sands climbed aboard the bus and touched yet another volleyball player before he was kicked off, the Lewis County sheriff’s office told KOMO.

Thankfully some sanity prevailed on this occasion and the court ruled that caffeine was not, in fact, the reason behind Sands’ aggressive and lewd behavior. He was sentenced to 30 days for each of the five counts of fourth-degree assault.

Sands’ caffeine defense might have been inspired by the “Twinkie defense,” ABC News suggests. San Francisco supervisor Dan White successfully avoided a first-degree murder conviction for the 1978 assassination of San Francisco City Supervisor Harvey Milk and Mayor George Moscone, claiming his sugary diet caused depression.

Dr. Martin Blinder, the psychiatrist who presented the “Twinkie defense” during the 1979 trial, told ABC News that caffeine could not hold up as a defense because it is made from coffee beans, which are all-natural. “We have no evidence that coffee is harmful,” Blinder told ABC.

Rest assured: drinking too much coffee will not turn you into a serial groper.

One lump, or two?

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Should We Waste Time Trying To Make Things Foolproof?

“Fight Against Stupidity And Bureaucracy”

http://jitterygt.wordpress.com  made a comment on one of my posts that “The creativity of stupidity is also endless”. And so it seems to be.

Stupid people are always finding new ways to do stupid things. I don’t think I would go so far as to call it creative, though. Most of it happens by pure accident rather than design. 

Now I have to point out at the start, that this blog post is not about things that are done to assist those in society who have some kind of disability. Everything that is done in that regard to make life a bit easier and things more accessible is to be encouraged and applauded. This blog applies specifically to those who could get out of their own way but because they are too lazy and/or obtuse, won’t!

So the question today is, and it’s a good question that hardly anyone bothers to ask or tries to answer, “Should we have to waste time, energy and resources pandering to the idiots in society?”

In other words should EVERYTHING have to sink down to their level? Should the rest of us normal-ish people be deprived of a better and simpler existence just because some people seem to be incapable of living their lives without doing themselves harm?

I vote NO, we shouldn’t pander to them. Not in the slightest.

In the dumbed down society that we are increasingly being forced to live in, and that the even dumber politicians encourage (probably so that the majority of people don’t develop the skills to see the hash they are making of everything), far from questioning the consequent waste of time, energy, and resources, they continue to make more and more rules to cater for the intellectually challenged.

Think about the consequences for a moment.

How many labels do we have on jars and cans and elsewhere that really don’t need to be there? Do we really need a label on a packet of nuts telling us that the packet contains nuts? Do we really need a label telling us that hot coffee is ‘hot’ or that iced mocha is ‘cold’?

How many otherwise productive man-hours are wasted each and every year trying to figure out what dumb thing some moron will do with a particular product?

I know the whole waste of time phenomenon has been spurred on in many cases because of spurious and unnecessary law suits by lawyers who aren’t smart enough to set up a proper law practice and by judges who are so out of touch with reality that they should be thrown out of court for not doing the same with these foolish lawsuits.

Then we have the bureaucrats weighing in. With nothing productive to do themselves, except to make our lives more and more intolerable, they dream up new rules and regulations to make business more uncompetitive and ordinary peoples’ lives more complicated.

And it’s all a waste of time. No matter what rules are invented and what precautions are taken it is a law of the universe that morons will find a way round them and hurt themselves anyway. Some of them have even walked into the signs put up to warn them about walking into signs.

So we should NOT waste time trying to make things foolproof because the fools have proved time and again that it’s a waste of time!

Let’s aspire to learn more and be smarter, instead of dumbing down to the level of those who don’t give a damn anyhow!

End rant. Have a cup of coffee – mind, though, it’s hot!

Here;s a few examples of the type of nonsense that goes on:

Suitable for outdoor use.  Found on a rain gauge.

Warning: High in sodium.  On a salt cellar.

Remove wrapper, open mouth, insert muffin, eat.

Use like regular soap.  On a bar of soap.

Simply pour the biscuits into a bowl and allow the cat to eat when it wants.  On a bag of cat biscuits. 

Instructions: open packet, eat nuts  on a packet of nuts

Do not use as an ice cream topping  on Hair colouring

Warning: do not attempt to swallow  on a Mattress

Caution: contents may catch fire  on Matches

Some assembly required  on a 500-piece puzzle

The appliance is switched on by setting the on/off switch to the 'on' position  on a Kettle

Product will be hot after heating  on Bread Pudding

Warning: May cause drowsiness  on Sleep Aid

This ice may be cold  on an Ice drink

Instructions: Put on food  on Ketchup

Do not open here  on the Bottom of a Cola bottle

Furious Flabbergasted Facebook Fools Face Frightening Falls From Fanciful Flagging Financial Floatation Farce

“Fight Against Stupidity And Bureaucracy”

First of all, well done if you were one of the people who tried out the quiz. I hope you enjoyed it.

Today’s blog, if the alliterated title full of “f” words hasn’t given it away already, is regarding financial matters. No, hang on, stick with it. It’s not that bad really.

Were you one of the “zuckers” who bought shares in Facebook? I hope the answer is no, because it is another example of the stupidity and madness that greed can provoke in people who should know better, but frequently don’t.

I can’t predict the future, but I knew that the Facebook IPO would cost a lot of idiots a lot of money.

The IPO launch price was tagged at $38 per share or something like 100 times the company’s earnings. It is easy to know why they priced it so. They set the price that high because they thought they could get away with it. Because the herd, unknowing and unthinking, would swallow the crazy hype about the company and buy, buy, buy!

Does that show more than a little contempt for the people you want to invest in your company?  Sadly I think that it does. Not that it is all down to the greed of Zuckerberg. The advising and underwriting banks had a lot to do with it and we know for a fact that they have nothing but contempt for ordinary mortals like ourselves. We are the marks, they are the conmen!

Usually they take the time to milk us dry before abandoning the market and leaving the ordinary investor to lick their wounds. But this time it happened fast. Within hours in fact!

Those who were not in the “loop” and couldn’t buy pre-launch, waded in on launch day and bought, bought, bought from $38 right up to $45 which the shares reached for a couple of minutes.

The poor fools got whacked almost straight away.

The market very quickly began to realize it had been conned, that this was not a LinkedIn IPO and the issue price had been set far, far too high to ever double on launch. An element of sanity crept in. Facebook  promptly started to fall, by about 11%.

In other words if you’d invested $1000 in the morning you would have turned it into $868 in the space of a few hours. If you were unfortunate to buy at the peak price, your $1000 would now be worth just a little over $700. OUCH!

But it wasn’t just individual investors that got caught. Almost every large mutual fund etc., most of whom are run by, let’s be kind and say, poorer quality managers, felt compelled to purchase Facebook shares, not because they though they were a good buy but because they saw other idiots doing the same and they were frightened about the possibility of missing out “the next Big Thing”.

Little do most investors realize, but the situation could have been even worse had the price not been artificially propped up for a while by the investment bank underwriters.

For the benefit of those who aren’t investors and/or who don’t know how the market works in things like this, here is a quick summary. IPOs are unwritten by investment banks like Morgan Stanley. The investment banks therefore have their reputations on the line. If the IPO goes really bad so does their reputation and their chances of being asked to underwrite future IPOs (and they get huge gigantic enormous fees for this work so they don’t want to lose it.)

Thus, in the case of Facebook, when the share price stopped climbing and quickly fell back to the $38 launch price, the investment bank underwriters stepped in and bought heavily. Without their intervention Facebook could have fallen catastrophically on its first day of trading.

Facebook does generate cash, mainly from advertising revenue. It has a vast following and that advertising revenue should rise substantially over time, so the company may one day be worth the $38 and even more. Google launched at $85 and is now worth $600, but it is a proven quantity revenue-wise and the price rise took time.

But, and it’s a big BUT, Facebook would need to be a hell of a lot better managed than at its market launch.   

But for now, I’m with my other “mad” friend Jim Cramer of Mad Money fame who rightly and sensibly advised a pass on the Facebook IPO. There may be a time to buy into Facebook, but the writing on my wall says “not today thanks”. Booyah Jim!

There’s an obvious question that I haven’t addressed. It is, “So what do I think Facebook is worth?” Well for what my opinion on these matters is worth (i.e. probably not much) I would peg the value at a lot closer to $18 than $38. I may be right, or I may be wrong, but I really don’t care because I haven’t bought any. I might reconsider if it the price comes a bit closer to my valuation, but it’s only a might.

The small print.
Fasab disclaimer: this blog post does not constitute professional advice as regards investments on the stock exchange, such advice would only be given and indicated thus if an outrageous fee were being charged and this blog is being given to you for free. Also any investor should always be aware that shares can fall as well as plummet and should act accordingly by not investing any money they can not afford to lose.