Investors queue for chance to glance at Zuck's FACE
But scrutinising the BOOK might yet throw up some furballs
Posted in Management, 8th May 2012 12:23 GMT
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Mark Zuckerberg told investors yesterday that he wouldn't hesitate to splurge another $1bn on a Web2.0 app.
The Facebook boss presented his initial public offering plans to hundreds of money peeps in New York on Monday ahead of floating the company on 18 May.
He defended his decision to buy photo-sharing outfit Instagram for more than $1bn in a deal that was personally struck by Zuck without any involvement from Facebook's board members.
The 27-year-old founder of the world's biggest social networking website has some investors concerned over his audacious moves – the Instagram deal being the most recent example.
Yes, it's so great that a billionaire is ONE OF US
However, Facebook is looking to raise as much as $10bn and yesterday at the Sheraton Hotel in New York people were reportedly queuing up around the block to catch a glimpse of copper-haired Zuckerberg, who was in the Big Apple to present his IPO to investors.
After the buzz around Facebook's roadshow dies down, Zuck will have about 57 per cent voting control of the company and will own roughly 23 per cent of the stock.
The value of the dominant social network could reach as high as $96bn assuming Facebook can convince those investors queuing out the door yesterday that the company has many years of potential growth ahead of it.
But there remain big areas where Zuckerberg – whose outfit saw profits fall in its last quarter – could yet stumble. Facebook isn't operating in China right now, but would like to in order to grow its now-slowing userbase, which is closing in on 1 billion people signed up to the network.
The company has yet to make any cash out of serving ads via mobile devices, even though Facebook's app is heavily used on smartphones.
It did begin inserting so-called "sponsored stories" into its News Feed function on the network in March this year, which means that investors will get a quick peek at what sort of revenue Facebook might be able to derive from mobile ads only after the roadshow has packed up and gone home. ®
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COMMENTS
Hmm...
Very few actual tangible assets to speak of, slowing growth and a dangerously unpredictable CEO who is not averse to spunking over 10% of the companies value (according to figures in the article) up the wall on rubbish.
Wow, where do I sign up? Seriously take my money, I don't want it.
Re: Hmm...
Besides the fact that FB doesn't have anything close to a revenue stream that would justify such a valuation, I would never put money in a company with the bastardised share structure set up in FB, Google (and quite a few new tech companies it seems ) where investors put in their money to get second-class non-voting shares and complete control of the company rests with the founders even after outside parties have poured in literally billions of their money.
With banks and financial institutions, shareholders have recently started to push back against the mega salaries and bonuses given to top management. They can do so because their investment carries voting power with it.
Re: Hmm...
I THINK ZUCKERBERG JUST MIGHT MATCH THE GENIUS OF STEVE BALLMER IM GOING TO MORTGAGE MY HOUSE AND SPEND HALF THE MONEY ON LOTTERY TICKETS AND THE OTHER HALF ON FACEBOOK STOCK
Re: Hmm... (AC 12:33)
but, but, the boy wonder wears hoodies to meetings - with off-the-wall, devil-may-care stuff like that going on, what could go wrong? C'mon!
The Instagram deal should really worry investors. A few more splurges on companies that have no revenue and no buisiness model to provide any revenue in future and FB will be peniless and wondering what happened to the good times.
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