Over the past few months, several gentlemen at our local country club have been talking about their investment, private investment, in Facebook stock. As a non-Facebook user, I find it quite childish, I don’t like the format, I don’t understand the appeal, and it basically doesn’t turn me on. However, from an investment point of view, it makes sense to revise the numbers. So, I’ve been doing a little reading.
There are a hundred books you might want to read called; “The Accidental Billionaire – The Founding of Facebook: A Tale of Sex, Money, Genius, and Betrayl”, by Ben Mezrich, Anchor Books, New York, NY, (2009), 260 pages, ISBN: 978-0-7679- 3155-7. By the way, this author also wrote another good book called “Bringing down the House”, which had to do with the world economic crisis. Still, after reading that book, it doesn’t sound like the kind of company he would be investing in.
But I guess that doesn’t matter, they don’t need my money, and now they’re selling private shares in China too. Apparently, those making the offer have come under scrutiny from the SEC, due to the law’s limits on IPOs and the number of shareholders, which are allowed before a company is considered public and has to follow. different auditing and reporting rules. .
Now, have you ever heard that famous Chinese quote; “You can’t save a fish from drowning.” Well, on Wall Street, when an investment doesn’t make sense for institutional investors, or becomes too risky, investment banks will no longer offer it to their best clients. Therefore, there is another quote; “Cut it down and feed it to the fish.” What it means to sell the crap to the general investing public, yes I don’t like that way of thinking either, but be honest with me, I would like to make a point here.
Okay, so has Facebook’s perceived market capitalization gotten out of hand? Has the feeding frenzy in Silicon Valley and Wall Street created another bubble, this time in social media? Facebook is looking for Chinese investment, looking to sell a large part as reported in the Wall Street Journal on July 9, 2011. Then the same day, an article appears headlined; “LivingSocial Seeks $1 Billion in IPO” by Gina Chon and Stu Woo, and the article said that with the IPO done, do they expect to overtake or catch up with Groupon within a year?
There was another interesting article on Read-Write-Web Online titled; “China Seeks to Buy a Piece of Facebook: This Week in Online Tyranny,” by Curt Hopkins, who stated;
“News has emerged that a sovereign wealth fund representing the Chinese government wants to buy a substantial amount of Facebook stock. Is China’s interest in Facebook simply a group of government-sponsored venture capitalists looking to obtain a part of Facebook’s upcoming IPO or is there something more complicated at work behind the scenes?”
Still, there was another interesting article on July 14, 2011 in the Wall Street Journal titled; “Facebook: Is your company worth 100 billion?”, and I guess my answer to that question, and reading everything I read, would say no, and maybe that’s why the SEC is protecting the investing public and looking into this issue. , and perhaps that is the reason why those who sell the shares do not do so in China. Anyway, I find all of this very fascinating, and I hope you will please consider all of this and think about it.