Zuckerbook and the Millionaires

Last January the Hollywood Foreign Press Association awarded The Social Network four Golden Globes for Best Picture, best original score by Trent Reznor and Atticus Ross, best direction from the wonderfully talented David Fincher and best screenplay by one of the most gifted writers today, Aaron Sorkin.

This week, the founders and venture capitalists surrounding Facebook began to cash in their chips. After hundreds of millions of years of networking socially, there are more billionaires and millionaires this week due to an initial public offering that speculators are saying will value Facebook at $107 Billion or just over $100 per user.

Like all companies, the purpose of Facebook is to make money despite the well crafted Mark Zuckerberg hoodies and golly gee it's all about the sharing exterior. So when it comes time for investments to be returned, it will be on the backs of each one of us - the 900 million. Whether we stick around when our pages are littered with advertising is a whole other story. It's doubtful the new millionaires are too concerned about all that.

Some interesting posts published this week

· Tech Crunch - Twitter Sentiment Mirrored Facebook Stock Price
· All Facebook - All That For 23 Cents?
· inc - Facebook IPO Could Spawn 1,000 Start-Ups
· Mitch Joel - Leaving Facebook
· Gigaom - Facebook Gets a Reality Check
· Wired - Facebook IPO is Not The Engame

Kneale Mann

venturebeat

LinkedIn IPO: Looks Good on Paper

Initial Public Obsession

The online and business world was a tizzy Thursday as the LinkedIn Corporation went public. The initial public offering (IPO) put the stock price at $45 USD. It began the day on the New York Stock Exchange at 83 bucks, rocketed to $122.70 and ended the day at $94.25. And then to $93.26 following after hours trading.

LinkedIn was one of the hottest trending topics of the day, the blogosphere was a blur with new posts every few minutes and opinions were plentiful. The good news was dampened by worry that this was be the beginning of another dot.com bubble.

The Dice Rolls Again

Investment giant Warren Buffet doesn’t play in the speculation world because it’s not actual product and he is one of the wealthiest people on earth. While Mark Cuban, owner of the Dallas Mavericks, once owned broadcast.com. In 1999, the company was making about $14 Million in annual revenue and Yahoo bought it later that year for $5.6 Billion in stock options. The question remains whether LinkedIn is worth $95 bucks a share, $950 bucks a share or 95 cents a share. Perhaps the only safe bet is the velocity of purchases for stocks will slow down.

Speculators are frothing at their keyboards for the day Facebook or Twitter announce their IPOs which some estimates say it will happen in the next 12-18 months. The question on most critics’ minds is whether either will be properly valued. And judging by first day LinkedIn trading mayhem, that is doubtful.

IPOs almost ground to a hault after the collapse of Lehman Brothers and others in late 2008 in the U.S. and have never returned to the frenzy of the initial dot.com boom-bubble-bust. This volatility would okay if you could buy low, sell high and get out before the floor caves in. It's doubtful anyone will ever know the value of LinkedIn and with an 8,000% increase in 24-hours, the numbers are tough to trust. MySpace anyone?

Is this the beginning of a dot.boom or a dot.bust?

Kneale Mann

Facebook Goes For Gold

Looks good 'on paper'

The news hit just as the last morsels of Holiday over indulgence was digesting.

Goldman Sachs earmarked $450 million for their top private clients to invest in Facebook. The social networking juggernaut is currently "valued" at $50 Billion. This would just about get them into the Fortune 100 save one itsy bitsy issue - actual revenue.

This was not something new to the world of VC and high-tech.

During the heady days of 1995-2000, billions were made and lost on paper in some cases in a matter of hours. The dot-com boom bubble bust caused stock speculation
to go off the charts.

Simply by owning a sexy website address, guys in basements were suddenly living the high life in posh offices in Manhattan. The problem was that most had no ability to make actual money on any actual product or service. This is not unlike the vast majority of start-ups today that have the coolest neato gadget solution for something we don’t even know we need. Many embrace the strategy that Google will eventually buy them.

But we’ve learned our lesson, right?  

Dot-com billionaires continue to live among those who lost their shirts before even owning a shirt because there wasn’t a shirt in the first place. The wasteland of marble floored office complexes and Herman Miller chaired boardrooms collected dust faster than they could collect revenue.

Despite the ever increasing appetite for online social networking, many are looking at the Facebook | Goldman Sachs relationship cautiously and with significant concern.
If a website lost its speculated net worth in a matter of days during the dot-com bust, even the almighty Facebook can falter under its hoodie laden wonderkind.

Person of the Year

Facebook CEO and 24% shareholder Mark Zuckerberg saw his bottom line almost double in 24 hours. His estimated personal wealth is in the $15 Billion range.  All the while, tech investors continue to hope for a Facebook IPO and it is doubtful Goldman Sachs will be waiting patiently.

What are you thoughts?

knealemann | email

image credit: googleimages

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