It’s rare when a story can hold our attention for more than a single day.
But I’m glad that there’s something to take my mind off the fact that I didn’t follow through with my strategy to purchase option straddles on Green Mountain Coffee Roasters and MasterCard in advance of their earnings.
There’s always next quarter and the next earning’s season.
By then, the Facebook story should just about be hitting full stride, as every effort will be made to get shares out at least 6 months prior to year’s end, to avoid increased capital gains taxes on newly minted millionaires.
Granted that the Facebook S-1 was released after yesterday’s closing bell, but counting the speculation regarding its release, we’re well beyond the time limits of our attention, now having surpassed 24 hours.
For me, I knew that the market was beginning to get a bit “frothy” to borrow a phrase from our dear past Chairman of the Federal Reserve, Alan Greenspan, when my son, who had all of a single stock trade under his belt, was beginning to digest the Groupon S-1 offering.
And he offered comments and observations demonstrating that he was no fan of its CEO, Andrew Mason.
Mason had a rocky pre-IPO experience, but has been virtually invisible ever since Groupon came public. Probably a good thing, given Groupon’s performance to dtae.
The Facebook S-1 revealed lots of previously inknown information, including the fact that Lee Harvey Oswald had not acted alone in the JFK assasination.
He had friends and they were poking one another with increased frequency before and on that fateful day.
On a potentially positive note, the news that Facebook shares would become the new US currency has already been supported by Congressman Ron Paul and he is preparing to drop his demand for a return to a gold standard and now plans to drop out of the GOP race, having now achieved his ultimate victory.
The news that Facebook would also release a secondary offering of shares, available through an egalitarian Dutch auction, contingent on Zuckerberg’s college girl friend coming back to him on hands and knees gave individual investors some hope to share in the process of wealth creation out of nothing at all.
Of course, the S-1 has to inform potential investors of some liabilities that may come with ownership of shares.
The fact that Callista Gingrich will become everyone’s friend after the IPO may be a deal breaker for some.
The revelation that Zuckerberg likes to peer through garden apartment windows while performing virtual poking may be worrisome and could negatively impact future revenues if he is apprehended and convicted.
For many, wondering what Facebook would do with the IPO proceeds was answered as we learned of Zuckerberg’s intent to buy up and destroy every available copy of The Social Network” and to then corner the market in amateur soft core pornography that is currently stored on Facebook servers.
The biggest news, perhaps, was realizing that the world of Zynga games accounted for 12% of Facebook’s profits, with the remainder essentially coming from ad placements.
The importance of that source of revenue is magnified if you believe the amazing claims of people on Twitter that no one has ever clicked on a Facebook ad.
It’s like no one ever wanted to admit that they liked “The Carpenters,”, but someone was buying their records. Pizza places don’t stock up on anchovies for their health. SOmeone has to be ordering them to adorn their pies.
I wonder if there’s a mechanism or some kind of analytic device for advertisers to realize that no one is clicking on their Facebook ads?
From my own experience, having placed ads on Facebook and Google, I much preferred the latter, as the conversion rate was much higher and, as a result, certainly more cost effective.
I always found the Facebook ad pricing to be excessive. I also wondered how many were lured to place CPM ads which deliver charges by virtue of an ad’s appearance, rather than CPC ones, which require a click to generate an advertising fee?
From Facebook’s perspective, there has to be incentive to place those CPM ads as often as they can serve them up.
As the world will suddenly care about the quality and source of Facebook’s earnings and will be putting every metric under the microscope, to me it seems only natural that Facebook will then put the squeeze on Zynga.
After all, where else is Zynga going to go? It’s not like there are lots of platforms out there that can play host and deliver the audience in anything resembling the same numbers. For more on my anti-Zynga bias read “Rumorville“
True, there’s inter-dependence, but it looks as if Facebook has the upper hand on this one.
So the guys at Zynga better get to the drawing board and start pumping out some new appealing annd relevant games.
I’d suggest that they start with “IPO-ville.” That’s bound to get lots of interest and they may as well strike while they can with this one.
Let gamers get the feel for what it’s like to actually get shares in an newly released Facebook issue. Let them get a feel for the wild rides in share price as those that can’t get in on the IPO start the mad and aggressive bidding process to get ownership of the 5-10% share float..
Trade those virtual shares and experience virtual capital gains, as well as the agony of seeing paper gains disappear because your greed got in the way of long term security and happiness.
The typical Facebook user is probably much more likely to give it all up, leave everything behind and start a real life farm that he would be likely to get a share of Facebook at the offering price, so at the very least, for God’s sake, give them the game.
Oh, but make certain you charge for the right to buy some necessary virtual tools, like a real time virtual stock ticker and a margin account.
Like everything else good in life, you may as well get to enjoy it in a virtual world.Can you really put a price on that?
But why stop there?
Why not “Zuckerbergville?”
“Be like Zuck” could be the new catchphrase for a new generation. You won’t have to jump a mile high in your celebrity Nikes to be like Zuck. That would take effort and maybe even generate a sweat that could short circuit your keyboard.
In Zuckerbergville you can decide how you want to use the IPO proceeds.
Want to diversify your “hoodie” holdings? You’re the man. Go for it.
Want to drop a roll of $100’s at an Ecstasy club?
That’s right. You can. No harm, no foul.
The virtual world has to be the way to go. Don’t like the disappointment? Just buy happiness.
For Facebook, many are going to be happy onvce those shares go public and especially once that lock-up period ends.
For many others, just salivating at the thought of grabbing shares as quickly as they can after trhe IPO, the dream may end up being much better than the reality.
For those, they’d probably be better served just by paying for and playing their virtual games and feeding the machine.
Welcome to Zuckville.
Check out Recent PortfolioTransactions and Transaction Performance
| Recent Trades | Security | Type | Action | Type | February 2, 2012 | CHK | Option | STO | Weekly |
| February 2, 2012 | S | Option | STO | Monthly |
| February 2, 2012 | GOOG | Option | STO | Weekly |
| February 1, 2012 | ZSL | Option | STO | Monthly |
| February 1, 2012 | ZSL | Stock | Added | |
| February 1, 2012 | HAL | Option | STO | Weekly |
| February 1, 2012 | HAL | Stock | Added | |
| February 1, 2012 | MOS | Option | STO | Weekly |
| January 31, 2012 | AXP | Option | STO | Weekly |
| January 31, 2012 | BP | Option | STO | Weekly |
| January 31, 2012 | HAL | Option | STO | Weekly |
| January 30, 2012 | XLF | Option | STO | Weekly |
| January 30, 2012 | XLF | Stock | Buy | |
| January 30, 2012 | MS | Option | STO | Weekly |
| January 30, 2012 | FMCN | Option | STO | Monthly |
| January 30, 2012 | FMCN | Stock | Added | |
| January 30, 2012 | GS | Option | STO | Weekly |
| January 30, 2012 | GS | Stock | Buy | |
| January 30, 2012 | HAL | Option | STO | Weekly |
| January 30, 2012 | HAL | Stock | Buy | |
| January 20, 2012 | MOS | Stock | Buy | |
| January 30, 2012 | V | Option | STO | Weekly |
| January 30, 2012 | V | Stock | Buy | |
| January 30, 2012 | RVBD | Option | STO | Monthly |
| January 30, 2012 | RVBD | Stock | Added | |