Facebook Stocks Fails To Hit The Bull’s Eye, Initiates Mobile Ads To Boost The Investors

Facebook’s Mark Zuckerberg is trying to take the social networking site to a new level, following a blow in the firm’s stocks over the last two weeks.

Facebook’s stock crashed 40 percent down from its IPO of $38 and now stands at $22.86. Trying to generate revenue for the firm, Facebook initiated ads for mobile, which Mark hopes will be a boon for the sinking morale of investors and would also monetize its mobile traffic.

However, there are many analysts who believe that Facebook’s stock could go down to $15 or even less.

According to an article published in barrons.com, writer Andrew Barrey feels that Facebook’s business stays uncertain and it’s unlikely that the social networking site will hit off with focus on mobile ads.

Facebook is trying to monetize its services without compromising on the user experience. And as mobiles have a small screen, Facebook won’t get much chance to configure ads.

Currently, Facebook trades at price per earnings (PE) of 48 cents a share.

Facebook is valued at $61 billion, or $53 billion excluding estimated $8 billion in cash. The social networking site is clearly lagging far behind Google and Apple. According to Barron.com, Facebook’s shares do not make a good buy and stand at as little as $15. However, Wall Street’s consensus offer more optimistic estimate for Facebook, showing its earnings to rise 31%, to 63 cents a share in 2013.

Facebook has a slow growth rate. And problems in mobile advertising don’t seem to be going away anytime soon. So it’s doubtful that investors would want to put in money in the firm.

There’s another point discussed in the article. Facebook has also started to issue many restricted stock to its own employees, so that they stay within the firm. The social networking site had taken out $1.4 billion restricted shares last year, which accounted for around $500,000 per employee. Adding that to this year, the firm has issued $1 billion of its restricted stock.

These restricted stock units (RSUs) that employees have do not have stock options and could be out for sale anytime in the coming months.

As per Mark Zuckerberg, CEO, Facebook said that it’s the firm’s way to compensate.

However, people such as Mark Cuban, Investor, believe that Facebook pulled off its IPO at a high price of $38, to keep its revenue at the maximum, which did get it an impressive amount of $10 billion. He also stresses on the fact that the only ones who lost in the game were the shareholders who thought they could pass the stock on to someone who will pay more.

Further, Cuban added that Facebook could boost spirits among its employees by merely reissuing stock, which can give better benefit to its employees.

Let’s take a look at how RSUs work-

Suppose Facebook offers 1,000 shares to its employees that have a value of $30. Now in case the price falls to $10, they will get $10,000, instead of initial $30,000 offered. This means that the plunging stock will give employees less value in shares, and that Facebook will give them lot more, say around $10 to make them feel as valuable as they were before its stocks plummeted.

Something similar had happened with Google in 2009. The firm lost more than twice the market cap valuation as compared to Facebook now, when the search giant simply repriced its stock options.

The big variation between Facebook now and Google then lies in the RSUs.

Facebook can’t change the price of RSUs, as the one who holds RSUs is only bothered about the current stock price. Instead, Facebook would just have to take out more shares at the new price.

RSUs it appears also have a taxable value upon issue, while stock options do not.

During that time, Google also had political cover for its move, as it was seen as a measure to cure errors of its own doing. Also it wasn’t the only firm going through economic slowdown that time.

So in case Facebook follows suit Google, it would anger many investors, which could also create long lasting rage with a breach of trust that would hurt the stock holders even more.

William Hambrecht, another investment banker and IPO expert feels that Facebook would get lot of criticism and could also lose credibility in case it tries to restore the value of its employees’ shares.

Coming back to the $15 stock price, majority of Wall Street analysts are optimistic about Facebook’s stocks. Many investors are just waiting for the lock-up on insider shares to end, which will only tell what the market response would be.

By then, it will also become clear as to how the social networking site plays its hand at RSUs.… Read the rest

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Post The iPhone 5 Launch,Apple Shareholders Rejoice As Apple Shares Transcend $700

All Apple stockholders are rejoicing as they all have joined the club of millionaires with enough cash stacked up in their accounts.

Following the launch of Apple’s sixth-generation iPhone 5, the Cupertino Calif.-based firm added more value to its already valuable stature with its stocks going over $700 per share in after-hours trading.

The iPhone 5 announced by Apple on Sept. 12th broke the all-time high record of the firm by topping sales record of two millions in just 24 hours. As the news hit the web, price of Apple’s shares saw an immediate rise.

Earlier in September, Google Inc. had reached that mark when its stocks traded at $709.98.

Opening at all-time high, trading stocks at $700 has evaluated Apple at around $656 billion. Stocks of Apple have been performing well even after Tim Cook revealed plans of initiating a dividend program, which took effect in July 2012.

Formerly, Apple had never offered shareholders dividends since 1995 and got criticism too as many thought it might lead to short sales of the stock. But now it’s without a doubt that following the iPhone 5 success, investors are now pleased with Apple’s continued hardware and software sales and strategy as they have enough cash piled up!… Read the rest

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Facebook Co-founder Dustin Moskovitz Sheds Shares!

Three months ago when Facebook went public, the social networking site saw a drop in its stocks, which made many insiders sell their shares. The latest in the news is Dustin Moskovitz, co-founder, Facebook, who is shedding off his sizable stakes in the social networking site.

Moskovitz left Facebook in 2008 to find Asana. On Tuesday, he completed 12 different trades in 150,000-share increments during a two-week period starting Aug. 17, ending on Sept. 4, 2012.

As per multiple filings with the Securities and Exchange Commission, the 28-year-old entrepreneur and Facebook insider has reportedly sold 1.8 million shares for $34.5 million.  This accounts to around 450,000 shares of the social networking so far this week, reducing his hold to 6.15 million Class A stock, which has less voting than Class B stock. He has 126.2 million Class B shares. The Class B shares can be changed for sale to Class A shares at a one-to-one ratio.

The trades were completed at price ranging from $20.08 to $17.56 per share.

Earlier, last month, Peter Thiel, first outside investor of Facebook also dumped his remaining holdings in the social networking site with a gain of $395.8 million.

The news could be worrisome for investors as all insiders sell their shares. But thankfully not everyone is stripping off of their stakes.

Mark Zuckerberg, CEO, Facebook said in a filing that he is committed to hold all his stakes in the firm for at least another year.

Marc Andreessen and Donald Graham, Board members of Facebook also specified that they would only sell enough shares to cover their tax liabilities.

Facebook went public in May with an IPO of $38 a share. The social networking site saw a decline since then, following the speculation of other investors selling off their shares.… Read the rest

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Facebook-Instagram Deal Cleared by FTC

The US Federal Trade Commission has given a go ahead to Facebook’s acquisition of Instagram, saying that it has no antitrust issues with the deal and will let it advance further.

Getting Facebook a step ahead in the deal, FTC said its commission held a unanimous voting of 5-0 to close the investigation and let the deal move on.

The news was brought forward in a press release by the commission.

Facebook seemed to be pleased by the FTC decision. The social networking site had bought Instagram for $1 billion in cash and company shares in April, a month before going public.

However, Facebook’s shares fell, which put the final deal today at $747 million.

Since photos are a key part of Facebook’s social network, it is believed that technology of Instagram would help the latter improve users’ mobile experience.

Following the announcement of acquisition, Facebook even released “Facebook Camera”, its own photo-sharing app.

Launched in 2010, the photo-sharing app, Instagram, has more than 80 million registered users. The app is also available for Android and iOS devices.

Mark Zuckerberg, Chief Executive, Facebook said in April that the firm had no plans on “doing many more of these” high-profile acquisitions of companies, which has a wide user base.

He also said that currently Instagram users could anticipate connecting with social networking service competitors such as Tumblr and Twitter. Zuckerberg also said that Facebook would not just try to integrate everything into the social networking site.

Instagram made some innovative integration into its Instargram 3.0., adding a geolocation feature, which indicates that the service is continuing to evolve.

The deal between the two companies has already been approved by the Office of Fair Trading in Britain.

Facebook hoped to close the deal in the second quarter of the year, but awaiting clearance, the firm told potential investors ahead of its May 18 initial public offering that it expects to finalize the transactions by the end of 2012.… Read the rest

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Apple Stays the Most Valuable US Firm!

Revolutionizing the technology, smartphone, and tablet industry, Apple saw its stocks rise to a record price of $665.15 on Aug. 20, which gave the firm a market capitalization of $625.5 billion that is the highest ever for a US-based company.

Apple Inc., is all set to grow its stocks further as the firm plans to launch the third generation upgrade of its smartphone, iPhone 5.

Apple stocks jumped 16 percent in anticipation of a new iPhone and iPad Mini since July 26.

Considered the most valuable U.S. firm in history, Apple is believed to have room for further growth as the company’s stock trades at a discount to the Nasdaq Composite Index.

Investors value Apple at 15.4 times trailing 12-month earnings, while the average company in the 2,495-member Nasdaq trades at 16.5 times.

This growth in profit by Apple has left behind its share increase, contributing to the lower price-to-earnings ratio.

Apple stocks saw a rise of more than 80-fold in the past decade; while earnings per share increased more than 300-fold to $28.05 a share last fiscal year from 9 cents in 2002.

Many analysts believe that Tim Cooks, Chief Executive Officer, Apple will use $117.2 billion in cash to grow the company and invest in mobile devices, and the latest televisions.

Shares of Cupertino, California-based Apple are expected to rise to $721.39 over the next year, while many analysts believe that the firm’s stocks will rise above $1000.

Investors of Apple are counting on the success of the next iPhone that the company is rumored to release Sep. 21. Apple plans to unveil the latest version of the handset on Sept. 12. The company hopes to sell around 250 million units of the device over its life until the next innovation.

Besides the iPhone 5, Apple also plans to unveil a smaller, cheaper iPad this year, iPad Mini. The company is also in talks with U.S. cable companies about teaming up to carry live television and other content through an Apple-designed device.

As the Cupertino, Calif.-based company keeps on launching best-selling devices, the value of its shares and profit also increases.

The newer products by Apple such as the iPhone and the iPad, accounted for more than 60 percent of revenue in the last fiscal year, while the iPod’s share reduced to 6.9 percent.

Maintaining the same profit margins could be a challenge for Apple as the firm plans to enter television business, which has thinner margins as compared to other electronic devices.

Currently, Apple is dependent on more than just new products; the firm has made fortune through the sale of iPhones, which has doubled, and the sale of iPads, which has more than tripled in the past year, said Apple executives.

Apple is all set to expand its sales force and is ready to take better advantage of this opportunity, as the firm works on the development of its next iPhone 5.

The firm reaches out to a wide market by lowering down the prices of its old models of iPhones and iPads and continues to sell new versions at high price, which does bring profit.

In terms of market value, Apple stays ahead of next-largest Exxon Mobil Corp. by more than $200 billion. Microsoft held the No. 3 spot yesterday with $258.2 billion, even after trading as high as $616.3 billion on Dec. 27, 1999.… Read the rest

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Facebook: Director Peter Thiel Cashes in over $1B Shares

Peter Thiel, Director, Facebook Inc. hit the news as he sold majority of his shares in the world’s largest social-networking website. Thiel made earnings of more than $1 billion last week after the lock-up on Facebook’s shares expired.

An insider selling shares is never good news for any organization. Thiel, a co-founder of PayPal and a member of the PayPal Mafia, was one of the earliest investors of the social networking site, Facebook.

Just after the lock-up on shares of the social networking site ended, Thiel, like some other insiders, sold around 16.8 million shares at the price of $38 a share, which generated him a great amount of $640.1 million.

On Aug. 16 and Aug. 17, Thiel however, sold another 20.1 million shares in the company, which got him $395.8 million, as per reported in a filing yesterday with the U.S. Securities and Exchange Commission.

A venture capitalist and hedge-fund manager, Thiel invested a whooping amount of $500,000 in 2004, which now got him $1 billion. This made him one of the largest beneficiaries of the firm’s gain before going public. However, later backers of the social networking site haven’t fared as well, with the stock losing almost half its value since the IPO among signs that Facebook’s growth is slowing and concerns that more insiders will exit their stakes. The sales disclosed yesterday were tied to a plan adopted on May 18, Facebook’s first day of trading.

The social networking site unlocked around 271.1 million shares last week.

Shares in Menlo Park, California-based Facebook saw a rise of 5 percent to $20.01 at the close in New York yesterday.

Thiel’s sale proceeded at prices from $19.27 to $20.69 per share, which signified most of his 27.9 million shares he had after the IPO.

However, Thiel still holds more than 5 million shares in the social networking site. It was also reported that Thiel freed up extra shares for sale when he converted more than 9 million shares to Class A from Class B.

As per another filing done yesterday, Accel Partners, another investor of Facebook, dispersed around 50 million shares to its own investors in the venture capital firm’s funds on Aug. 16.

November hopes to bring another challenge for Facebook, when another 1.44 billion shares will go up for sale, belonging to the employees of the social networking site.… Read the rest

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OnLive Sacks all Employees, Discloses New Owner

The abrupt sale of assets of OnLive and wiping out of all staff on Friday surprised everyone. The cloud gaming company however, broke the silence and stated additional details on the company’s sale Sunday night. It also offered some information about its first new investor.

OnLive has been sold to an affiliate of its first investor Lauder Partners, who was a part of OnLive’s previous series C. The new company is disclosed to have the same name, OnLive.

The company fired all employees and offered less than half of them a job with its new owner. The release also confirmed that all of OnLive’s shareholders, investors, employees and management, got wiped out in the deal.

A release was sent out for reporters Sunday night, which talked of the asset sale. It said, “OnLive, Inc.’s board of directors, faced with difficult financial decisions for OnLive, Inc., determined that the best course of action was a restructuring under an “Assignment for the Benefit of Creditors.” The assignee of the company’s assets then sold all of OnLive, Inc.’s assets (including its technology, intellectual property, etc.) to the new company.”

OnLive also noted to be on a look out for additional funding, to hire back some of the employees that the company fired. However, it also gave the sacked employees a choice to consult for the newly formed OnLive in exchange for options in the new company. Now it is a matter of choice as to how many of them accept the offer, given the fact that they lost all previous shares.… Read the rest

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Apple Stocks Hit New High After 4-Months Swoon

Stocks of Apple Inc saw a new rise Friday morning, just ahead to the release of new iPhone and a smaller iPad. After a dip of four months in stocks, this news was good for Apple, which is already the world’s most valuable company.

Apple Inc. saw its stock hit $648.19 in midday trading, before moving back to $648.11, which was up by $11.77, or 1.9 percent, from Thursday’s close.

Earlier, the firm’s stocks hit a high of $644 on April 10.

The market value of Apple is reported to be about $608 billion, which is almost 50 percent more than Exxon Mobil Corp., which is No. 2 at $408 billion.

Apple’s stock stumbled last month after the firm’s earnings report for the April-June quarter reported the slowest growth in more than two years. This marked the second time in 10 years that Apple missed the expectations of analysts.

Peter Misek, analyst, Jefferies & Co. moved up the target of his price on the firm’s stock to $900 from $800 on Friday, reporting the production of an “iPad Mini” in China. Misek’s belief was based on reports, which came out from Apple’s suppliers, contract manufacturers and contacts in China. He further said that Apple is believed to manufacture around 25 million iPads of all kinds in the current quarter, which the firm would raise from a previous estimate of 16 million, excluding the “iPad Mini.”

However, the Cupertino, Calif., company is tight-lipped about a new iPhone or iPad.

There have also been rumors about the launch of a smaller iPad this year. Various analysts believe Apple plans to make a cheaper tablet computer to make its mark in the market, which is selling the Google Inc.’s Nexus 7 and Amazon.com Inc.’s Kindle Fire, at a price of $199. The cheapest current iPad available in the market costs $399.

It is believed that the sale of iPhone 5 will hit the market late September. iPhone 5 is much anticipated phone, which is believed to be the biggest phone launched ever. This latest model of iPhone is rumored to have somewhat bigger screen with access to the latest wireless data networks in the U.S.… Read the rest

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Facebook Stock Expected to See Shift Thursday, Will Investors Sell Shares?

Stumbled due to the slow growth of revenue, the plunge of Facebook stocks was not what many investors expected when the social network went public in May. However, there has been some speculation on the Wall Street that the Facebook stock could take a big hit this Thursday, which marks the first day that will let all investors and its directors sell their stocks to public.

Facebook saw a rocky initial opening, when the network took out its first opening report since going public in May. The social network saw a loss of $743 million, which also slashed down its share prices.

The social network went public with 421 million shares as part of its original offering. Out of that number, around 271 million shares are expected to be unlocked Thursday.

It is reported that Facebook’s less-than-perfect market performance may in fact help the firm with this problem. Investors who are looking to earn some money would be the only ones selling their shares, and as Facebook’s stocks have dropped from its initial price offering of $38, it is not expected to make more money.

There is also speculation that Facebook will unlock more shares in the coming months, as is expected that around 1.8 billion shares will hit the market within the next year.

The social network’s tiered system states that the employees who have received shares as compensation will also have them unlocked in the fall.

There are many analysts who have underestimated the impact that shares could have on Facebook.

Michael Pachter, analyst at Wedbush states that it would not look good only if high-level officials within Facebook sell their shares, which is not at all expected.

On Wednesday, shares of Facebook were closed at a price offering of $21.20, which went up for around four percent for the day, but was down by 44 percent for its IPO of $38.… Read the rest

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