Category: Facebook


2013-07-25_09h56_43

The market awarded Facebook a 25 percent share price spike today, following a strong earnings report that showed off the company’s ability to retain mind share among youths, build its total global usership, and monetize mobile traffic better than nearly any other company. Period.

The firm pop in its shares has pushed Facebook’s valuation past the $80 billion mark, where it currently rests at $80.21 billion. Not a bad day’s work, but that number is somewhat shadowed by the fact that, as a company, Facebook has torched tens of billions of dollars of shareholder equity since it first went public.

We draw two conclusions from that fact: Given that Facebook is now a tremendously stronger company than it was a year ago, and yet it is valued under its former price, a pox on our own house for overpaying for the company’s shares; and, naturally, that Facebook is more than another strong quarter away from being simply flat.

Here’s TechCrunch’s Josh Constine and Kim-Mai Cutler the day before the fateful, and botched, IPO:

Facebook shares will start trading at $38 tomorrow, the company confirmed in a release, giving it a valuation of $104.12 billion. Facebook and its early shareholders will raise just over $16 billion in tomorrow’s much anticipated IPO.

At a $104 billion valuation, Facebook is worth more than any other tech IPO candidate at the time of its offering. It also perfectly matches what Facebook shares have been trading at in secondary markets over the last several months. Google was worth $23 billion at the time of its very unusual Dutch auction IPO back in 2004. As of tomorrow Facebook will be worth about half of what Google is worth now.

The implicit point in the second paragraph is that if Google managed to so greatly grow its valuation compared to its IPO price, to what heights might Facebook race? Despite general market furor, Facebook popped but a nibble to $42 a share on its first day, and then declined rapidly enough that its banking partners held the line at its initially offered price.

To illustrate just how off the market was concerning the pricing and sale of Facebook stock, here’s the same set of TechCrunch writers during its first day as a public company:

While the price is going to fluctuate a lot today, there’s a crowdsourced bet from Twitter users on FacebookIPOClosingPrice.com that the company will close at a $54 price and a $135.7 billion valuation.

Nope, Twitter users, that wasn’t the case. In fact, those shorting Facebook made out the best.

The gap between $104 billion and roughly $80 billion is $24 billion. But that’s not even the least-kind way we could describe Facebook’s total decline from former heights. Facebook opened on its first day at $42.05, meaning that it was worth more than $104 billion; those who bought in at that price would have enjoyed a far heavier decline in the value of their stock if they held onto it.

But, in effect, this is our fault. The Facebook IPO price, as noted in the first blocked quote above, matched secondary market interest. The market bore Facebook at a $38-per-share price; the IPO went off, hitches aside.

Christopher Hitchens once said that the ironies of history occur most pungently to those that don’t believe in them, and that applies greatly to us in the technology industry. We have undergone a number of periods in which valuations of technology companies have gotten far ahead of their earnings. Again and again we have bought into our own hype only to watch the money of the average Joe evaporate as founders and investors pocket cash at IPO prices. That’s fine. It’s simple market capitalism. But you’d think we would have learned a bit by now.

Facebook as a financial entity is much stronger than it was during the quarter it went public. Let’s do a little comparison for fun [Facebook Q2 2012 financial data versus Q2 2013 financial data]:

  • Revenue, Q2 2012: $1.18 billion
  • Revenue, Q2 2013: $1.81 billion
  • Net income, Q2 2012: -$157 million
  • Net income, Q2 2013: $333 million

Aside from higher expenses and a lower operating margin, it’s hard to find a metric by which Facebook is worse off than it was a year ago. And yet we the market public value the firm at $24 billion less than on its first day.

We were out of our skulls in 2012, and we are still paying for it. That said, Facebook is damn killing it recently, and is slowly growing into the valuation that its bankers and investors found palatable four quarters ago.

New question: Is Facebook overvalued at its current $80 billion price? The comments are yours.

Top Image Credit: Steve Snodgrass

Zuck bought Facebook its fanciest new outfit in many years this week, and naturally, the New News Feed is getting all the swooning. But FB added a handful of delicate tweaks and turns to the site—some you might not have noticed yet.

It makes sense to toss in little changes in the shadow of a giant one. Some of them make sense given the news feed shakeup. Others are just augmentations the team slid in without noticing. Many are good. Some are not. Here’s a guide to all that’s new and (mostly) improved.


All The Tiny Changes Hiding in Facebook's Latest Redesign

Fonts

The words you read on Facebook look different now. Helvetica. All over the place. According to Facebook Product Designer Vivian Wang, the typographical shift is part of Facebook’s strategy to be more consistent. Your statuses should look the same whether you read them on a phone, tablet, or browser, and with the Helveticafication of Facebook, there’s a “consistent voice” no matter what device you’re using. And voice is neutral—Helvetica is beloved for being both brilliant and inoffensive, which is why you’ll see it everywhere from the NYC Subway and the Space Shuttle. And now, Facebook. This was probably inevitable.

FB also added some old fashioned styling to its revamped article sharing—if you toss in a link, the headline will be displayed in large point Georgia—a typeface that’s very, very close to Times New Roman, and carries a lot of its gravitas. Zuck said he wanted the feed to be more like a newspaper, and here’s how.


All The Tiny Changes Hiding in Facebook's Latest Redesign

RIP Ticker

The controversial Ticker—that live feed of everything our friends clicked, liked, and shared, as it happened—has been beaten within an inch of its life, and stuffed into an insultingly small box in the bottom left of the page, where no one will even think to look for it. It only shows one item at a time, and completely blends into your IM buddy list, so really, it might as well not be there at all. Wang said the Ticker is now “more of a peripheral feed,” which seems appropriately euphemistic for a funeral. She was quick to point to the “Most Recent” category of the revamped New News Feed, which Facebook says is now your best bet for perma-stalking your friends.

Don’t be surprised when the ticker vanishes completely. You probably won’t even notice.


All The Tiny Changes Hiding in Facebook's Latest Redesign

New profile pictures

Hey, did [__________] change her profile picture? I love those glasses, don’t you? George looks handsome, too. And now they’ve got their own little rectangle in the Photos News Feed, highlighting their most recent vanity changes.


All The Tiny Changes Hiding in Facebook's Latest Redesign

Update bubbles

This is so tiny, and so lovely. If there’s a new story on a feed you’re currently reading, you’ll get a gentle bubble reminder. Click it, and you’ll be taken to the top.


All The Tiny Changes Hiding in Facebook's Latest Redesign

Animated likes

Entirely trivial, but slightly charming. When you like something, the little thumb briefly bounces, just like in the mobile app. I’m sure some group of PhDs decided that would make people click things more often, because we’re animals that like to see little things bounce around.


All The Tiny Changes Hiding in Facebook's Latest Redesign

Shape-shifting sidebar

A great deal of Facebook has been stripped down and stuffed into the lefthand sidebar. What happens if you don’t have the screen real estate to fit that and everything else? Just make your browser window smaller, and the bar shrinks to an icon-only view, saving a great swath of pixels.


Friend lists? Hello? Bueller?

Sorting our Facebook buddies into categories we care more or less about seemed like a neat way of sorting signal from noise, given how many worthless people we’re friends with these days. But how do we edit these lists now? The old buttons and menus that let you edit your social silos seem completely gone—I was only able to find an editing option by jumping through a bunch of outdated articles in the Facebook Help section. It’s here, if you want it.

Notice any others? Show ‘em off below.


User Manual is Gizmodo’s guide to digital etiquette and internet intelligence. It appears as if by magic every Friday.

Two thirds of Facebook users have taken a voluntary break from the site for several weeks or more, citing reasons ranging from “excessive gossip or drama from their friends” to “concerns about privacy”, according to new research. But much as its critics might like to think otherwise, the world’s most popular social network is showing no signs of losing its audience. The most common reason stated for taking a break is that users are too busy, following by “just wasn’t interested” and that it’s a “waste of time”. According to a new survey published by the US Pew Research Center, only 4% of Facebook users cited privacy issues, with just 1% saying they did not like to share their lives via Facebook. Only 2% said they preferred to communicate face to face.

Read the full story at The Guardian.

Follow

Get every new post delivered to your Inbox.

Join 108 other followers

%d bloggers like this: