My Facebook shame

Back in the days of the over-hyped build-up to the Facebook IPO the think tank here at Falling Downs revelled in playing the party pooper.

"Go short, my friends!"

Indeed, for about six short months, I looked like a genius!

Folks have generally forgotten that FB lost 50% of its IPO price in the first six months after they went public.
That October you could buy Facebook shares for less than half the issue price, but why would you?...

Fast forward four years; FB hit a new high today; $112. That's roughly a 300% gain on the issue price. Or a 600% gain on the lows of that October.

Good thing I'm just an amateur stock-picker; I only lose my own money.

Facebook IPO + 3 and the lawsuits are flying

Before the third day of Facebook trading had ended at least two law-suits had been filed over the initial launch.

There's a guy in Maryland wanting to take NASDAQ to the cleaners because of the tech malfunctions in their order processing system.

Then there's a guy in California who has a quibble with the underwriters for flogging him abject crap as the next greatest thing.

Not that Facebook is abject crap.

At ten bucks a share it's a speculative buy.

Closed at $31 today so sell short if you can and sit tight if you can't.

But both those guys want class action status for their suits, and when they get it armies of suits will be milking these class actions for everything they're worth for years to come.

That thriving economic sector "the legal business" is one symptom of how America went off the rails back in the '70's and '80's.

America was educating ten lawyers for every engineer.

Japan and China and India were graduating ten engineers for every lawyer.

So a generation later we have a situation where Japan and China and India can design stuff and build it and have thriving export markets, and America can dazzle the world with how quickly a class action law-suit can get off the ground.

Facebook: how low can it go?

We're hovering in the mid 30's this afternoon. Trading volume to date suggests that most of the insiders are long gone, having dumped their over-hyped stock on a bedazzled public.

So what's Facebook really worth? Something, for now. Ten bucks a share?
What kind of revenues can the company expect going forward? What's the next fad, the next tech breakthrough that will make Facebook shrink faster than it blossomed?

Who knows?

At ten bucks a share it's still far from a sound investment. I'd call it a speculative buy at $10.

In the meantime, the smart money is shorting the bejeezus out of this turkey.

Facebook faceplant

According to what I read today the only thing that saved Facebook from closing below the issue price on day one was massive buy-ups by the issuing brokers.

So I was right and I was wrong.

Wrong in that I thought it would take weeks or months for the market to sniff out the hooey in the Facebook IPO.

Right in that it's been ID'd as a bogus come-on designed to suck the money out of your investment account and put it in the pockets of the insiders.

Facebook follies!

Here's what will happen.

There'll be a great pop when Facebook shares start trading.

All the insiders will make out like bandits.

A few weeks or months down the road, there will be another "pop".

That'll be the sound of the Facebook bubble bursting.

By then all the stock will be held by the little guys who bought it from the insiders.

When the market re-values Facebook back to where it properly belongs, that $100 billion company is going to worth less than a penny for every dollar those retail folks paid for it.

No doubt the insiders will be patting themselves on the back and congratulating one another for their astute read of the market.

Facebook and the lemming effect

Word has it that the Facebook IPO is already oversubscribed.

The initial share issue values the company at around 100 billion.

Hmm... that seems mighty optimistic.

That's double the value of the Ford Motor Company.

It's more than Honda or Volkswagen. More than Siemens, the German engineering giant.

More than Kraft Foods, or American Express or Caterpillar.

Zuckerberg's wet-dream-gone-viral is worth more than Goldman Sachs.

Really?

Go short, my friends, go short!

What's news and what's not

There's been tons written all over everywhere about how "news" has become entertainment programming.

That's pretty much true.

The other morning the CBC started out their "World Report" with a story about what might be revealed at the Victoria Stafford murder trial that day.

Victoria was the kid who was murdered by a couple of loser crack-heads from Woodstock a couple of years ago. A sad sad story.

But is speculating about what might happen in court on any given day any kind of a "news" story? Should it lead a newscast that purports to be a serious news program of global reach?

No and no again.

It's the same pretty much everywhere you go for your news.

Many of the US sites are just full of speculation about John Edwards' mistress these days.

Edwards is an also-ran in the richest sense of the word. Also a major league slimer. But why does the fact that he dropped his trousers for gals other than his cancer stricken wife constitute news?

It doesn't.

What else is on the news radar?

RIM stocks falter. That's news?

Gingrich drops out of GOP race. That's news?

Bin Laden's diary is big news these days. Now that Obama has made the Osama kill a central plank in his re-election campaign we'll be hearing tons and tons of imaginary updates from bin Laden's diary.

Oh, and don't forget the Facebook IPO. A bunch of self-dealing self-interested insiders keep issuing press releases and the media pass this garbage on as though it's important news.

At last report Zuckerman values his lucky strike in the $100 billion range. Is that news?

Zuckerman's lucky strike can disappear as quickly as it appeared. One billion is too rich a valuation for Facebook, never mind a hundred.

But check your news sites.

All this stuff is considered news.