The Thinker: Rich Galen


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Mullings by Rich Galen
An American Cyber-Column By Rich Galen
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Rich Galen

Wednesday May 16, 2012


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  • The investing community is agog at the prospect of the Initial Public Offering (IPO) of Facebook on Friday.

  • If you're under 103, you probably have a Facebook page. You and about 901 million others.

  • I have a Facebook page. I started it about four years ago when the younger people in the office teased me about being 103 years old.

  • I opened my Facebook page and immediately started the "friend" chase. I decided that having more friends than people I knew was a good thing so I started trolling for friends.

  • I now have the maximum number of friends an individual can have. 5,000. I actually know about 27 of them. The rest, as I have mentioned before are a combination of "Friends" trollers, people who have seen me on TV but wouldn't know me at the Safeway, and Ukrainian hookers.

  • Although, according to, a final decision won't be made until Thursday evening, analysts expect Facebook shares to cost between $34 and $38 a share which would value its "upcoming offering at as much as $18.5 billion" and the entire company of something in the area of $100 billion.

  • The CEO of Facebook is a 28-year-old named Mark Zuckerberg. He and some pals started Facebook in their dorm room at Harvard.

  • By the close of business Friday, some estimates put Zuckerberg's worth in the $21 billion range which on the Forbes' list of the richest people in America would put him between number 8 Sheldon Adelson ($21.5 billion) and number 7 George Soros ($22 billion).

  • But, Zuckerberg is a little younger than everyone above him on the list, so he has time to climb past perennial number one Bill Gates ($50 billion).

  • Like all things in life, there may be bumps in Facebook's future. General Motors announced this week that it would no longer spend advertising dollars on those ads that auto-magically appear on the right side of your screen.

  • According to the Wall Street Journal GM studied the situation and found that the "paid ads on the site have little impact on consumers' car purchases."

  • To be fair, GM was only spending about $10 million a year on Facebook ads. That sounds like a lot but GM's total advertising budget is about $1.8 billion (among the top three advertisers along with AT&T and Procter & Gamble).

  • Also, GM's advertising represents less than 3/10s of one percent of Facebook's 2011 revenue of $3.7 billion.

  • Still, keep in mind that if context-based web advertising begins to falter, you read it here first. Well, first if you don't count the Wall Street Journal.

  • If you have been practicing pressing the first 9 digits of your stockbroker's phone number so you can get in on Facebook at the IPO price you're probably not going to be dialing for dollars on Friday morning.

  • Unless your broker's name is Jamie Dimon.

  • Otherwise, according to "unless you're a large institutional investor like a pension fund or your stock broker is unusually well plugged into one of [the] 30 underwriters, you can't" participate in the early going.
    "Facebook plans to sell 337 million shares - which sounds like a lot. But because it's widely expected to be a hot stock, demand is likely to be much bigger than the first batch of shares."

  • If shares pop up because they are oversubscribed you will probably be able to buy some shares on Friday or Monday but you will pay more than the big boys.

  • According to the San Jose Mercury News
    "Among other recent social networking IPOs, Yelp shares rose 64 percent in their first day of trading, while Groupon rose [40 percent] and LinkedIn popped up 109 percent."

  • Groupon's IPO price was about $20 last November and the shares spiked to $28 within minutes of its opening. Last night Groupon shares closed at $12.17.

  • On the other hand LinkedIn opened at $45 last May and closed last night at $110.56.

  • What will happen with Facebook?

  • You pays your money, as the man once said, and you takes your chances.

  • On the Secret Decoder Ring today: TONS of links to everything above. Well worth clicking on the SDR link.

    The Mullfoto is an example of a universal constant and the Catchy Caption of the Day is equally strange.

    -- END

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