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Tag: Facebook Stocks

  • Mark Cuban Admits He Lost Money on Facebook

    On the eve of Facebook’s big IPO, Mark Cuban predicted that the public offering could be the “most important” in history – but not for the reasons you might think. Cuban thought brand excitement would bring in retail investors who wouldn’t read the prospectus, and would then be chewed up by high frequency/algorithmic traders, who would “attack this stock like a pack of wolves.”

    Today, with Facebook stock creeping to under half of its initial offering price, Cuban admits that even he lost money trading Facebook stock. Like many others, Cuban expected Facebook stock to bounce upward, which never happened. From a post on Cuban’s blog:

    I bought and sold FB shares as a TRADE, not an investment. I lost money. When the stock didn’t bounce as I thought/hoped it would, I realized I was wrong and got out. It wasn’t the fault of the FB CFO that I lost money. It was my fault. I know that no one sells me shares of stock because they expect the price of the stock to go up. So someone saw me coming and they sold me the stock. That is the way the stock market works. When you sit at the trading terminal you look for the sucker. When you don’t see one, it’s you. In this case it was me.

    In that same post, Cuban made it clear that he doesn’t begrudge Facebook its high initial offering price, the way many investors now do. He points out that the Facebook CFO was right to price the stock as high as possible, as Facebook ended up raising $10 billion. Cuban blames individual investors and brokers who didn’t read the prospectus for their own losses, and states that no one cares about traders, like himself, who were “hoping for a pop.”

  • Facebook Says “No” to Paper Stock Certificates

    Those collectors who were hoping to frame their paper stock certificate for their Facebook shares are out of luck. According to AllFacebook, Facebook has changed its mind and will not be offering paper stock certificates, even as a collectible. GiveAShare.com will, however, offer collectors a certificate that is similar to an official one, with statements from Facebook’s transfer agent showing account numbers for stock holdings. OneShare.com will provide a similar service.

    Facebook, in its IPO filing, had originally planned to issue the paper stock certificates. According to AllFacebook, CNNMoney and OneShare.com, which were planning on selling Facebook shares that would come with a frame or plaque, had far more orders than usual for the stock certificates. There is no official word on why Facebook has changed its stance and decided against issuing the certificates.

    Facebook’s IPO has been considered lackluster, at best. The company’s lowered stock price is being blamed on a combination of NASDAQ technical glitches and secret, last-minute changes in revenue projections. The technical difficulties could be due to large retail buyer demand, possibly these collectors who simply wanted one share of Facebook to show off on their wall. As for the revenue projections, Wall Street is blaming the IPO underwriters.

    (via AllFacebook)

  • Facebook Co-Founder Makes Excuses for Renouncing US Citizenship

    As we reported on friday, Facebook co-founder Eduardo Saverin has renounced his United States citizenship which he has held since 1998. Saverin moved to the US from Brazil in 1992 and met the now the famous social network creator, Mark Zuckerberg during his days at Harvard. According to the 2012 film, the Social Network, Eduardo contributed a great deal to key financial workings at Facebook that made it possible for the site to become a success.

    After he sued Zuckerberg and Facebook he inherited a substantial financial settlement and an over 4% share of the company. At the doorsteps of the much anticipated Facebook IPO, Saverin and the rest of the shareholder at the California-based company stand to make a lot of money, but will also be confronted with a huge tax obligation when it comes time to square-up with the government.

    Fortunately for Saverin, he has been proactive in planning for this day and took steps to renounce his US citizenship back in April. He plans to become a citizen of Singapore where it is said he will have more freedom over where he invests his capital. A spokesman for Saverin was quoted as saying, “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time”.

    With his renounced citizenship Eduardo will sidestep a huge tax bill, but will still pay a sizable exit tax on his shares of Facebook. Now Saverin’s spokesperson is attempting to rationalize his departure beyond just the tax aspects. The claim is that it isn’t about taxes at all, but about freedom to invest as he pleases.

    Here’s what a spokesperson for Saverin told the Wall Street Journal:

    “U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts,”

    “Many foreign funds and banks won’t accept Americans. This was a financial rather than a tax motive.”

    “His decision had nothing to do with dissatisfaction here, but with his strong desire to do business there,”

    So that is the latest from Eduardo Saverin and his big Facebook money. He’s leaving the country so that he may concentrate on foreign investments and not attempting to minimize his IRS obligation at all. We’ll keep you posted if anything more comes of this situation. Apparently it is becoming more popular for major US investors to renounce their citizenship in order to take advantage of investment opportunities elsewhere.

  • Facebook Sets Stock Prices for IPO: $28-$35/ Share

    Facebook just released their pricing for the upcoming IPO. The shares will sell between $28 and $35 per share. Revealed today in their SEC regulatory filing, the company seeks to sell 337.4 billion shares, which could make the social networking giant as much as $13.6 billion. Sounds pretty okay to me.

    It also puts Facebook in the position of being the most valuable web company at the time of IPO filing in US history. Though many in the industry predicted a $100 billion valuation for Facebook at the time of filing, the actual numbers, between $77 and $96 billion, are closer to numbers we reported on from an analyst’s most recent calculations of $90 billion.

    According to Capstone analyst Rory Maher, the reason for the lower valuation is a slowed revenue growth year-over-year, not as much traction from premiums ads as they expected, and lower EBITDA margins. Obviously some of these factors did effect their pricing strategy.

    As you may recall, Facebook will be traded on the Nasdaq stock exchange under the ticker symbol “FB”. Final pricing and subsequent trading are still about 15 days off, so as always, things could still change. This might be good news for those who believe the stock pricing is a little on the conservative side.

    We’ll have to see how well the stock performs as the year unfolds, but there’s no doubt investors will be lining up on the day the shares go on sale. If there’s any concerns over the financial performance of the social site it sure hasn’t been shown by CEO Zuckerberg. We can look for him on the IPO roadshow later this month. As always, you can read about all the Facebook IPO news here.