The big news this week was Facebook filing its $5 Billion IPO on Wednesday. This must have been one of the most anticipated IPO’s of all time. With 845 million active users and over $3.7 Billion in revenue last year, investors are drooling over the growth potential of Facebook.
But things can change quickly in the tech world (MySpace, anyone?). What I found interesting was Facebook’s analysis of the risks to their business:
Our financial performance has been and will continue to be significantly determined by our success in adding, retaining, and engaging active users. Any number of factors could potentially negatively affect user retention, growth, and engagement, including if:
- users increasingly engage with competing products;
- we fail to introduce new and improved products or if we introduce new products or services that are not favorably received;
- we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance;
- there are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors;
- there are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;
What are your thoughts on Facebook as an investment?
Now let’s take a look at some other interesting personal finance articles from this week:
- Canadian Couch Potato said that market forecasts prove worthless again
- Million Dollar Journey posted his January net worth update
- Retire Happy Blog wrote that new CPP rules may make you think twice about retiring early
- Michael James said that tax fairness would decimate Old Age Security
- Canadian Finance Blog asked will actively managed mutual funds will ever go away?
- My Own Advisor wrote get your financial house in order or keep dreaming?
- Parenting Family Money listed 5 kids expenses to budget for – apart from college
- Financial Highway listed 6 things you might not know about your HELOC
- Passive Income Earner posted his top 20 dividend stocks
- Young and Thrifty reviewed Secrets of a Stingy Scoundrel
We were also included in the following blog carnivals this week:
- Carnival of Personal Finance
- Self Directed Investing for Retirement Carnival
- Tax Carnival
- Carnival of Wealth
- Totally Money Carnival
- Canadian Finance Carnival
- Carnival of Financial Camaraderie
Have a great weekend everyone!
I am surprised to not see any comments about the Facebook IPO! Here are mine:
* About 2 years too late in my opinion. How much more can they grow in user base and revenue?
* Who looks at banner ads anymore? Seems the ad revenue will not be a sustainable revenue stream.
* Facebook appears to be “so yesterday” with the teens I know. I saw this article in the G&M which may substantiate this argument: http://tinyurl.com/6pe6fgq
* I see no longterm viability of the business model in the filling documents or long term prospects for the $5B they hope to obtain.
I will watch from the sidelines and not waste the cost of the trade on this one because I think it will fall fast when the suits have finished their day. I maybe wrong and welcome feedback!
Hi Allen, I agree with your thoughts on Facebook. Things just move too fast in this space and sooner or later something else will come along and do a better job of capturing users attention.
According to the filing, Facebook is going to start pushing ads to mobile (which is currently ad-free). It’s not a given that this strategy will work.
I have no doubt that advertisers get tremendous exposure on Facebook, but I don’t believe the click-thru-rates and conversions are very high at all.
Thanks for the mention Echo!
I heard on the radio that this graffiti artist who was asked to paint the walls of the facebook HQ in 2005 was asked if he wanted to get paid by cash or by shares.
He picked the latter and once the IPO goes ahead, he’s set to get $200 million!!
I wish I painted graffiti lol.
@Y&T – that’s a pretty cool story. $200 million? How many shares did they give him? I’d like to see what he designed for them
Thanks for the mention, have a great weekend!
Will tweet your post!
Go Giants!
Mark
Thanks for the link love Echo!