I wasn’t a fan of Facebook IPO, I mean, $38/share? It’s one thing to be hopeful and another to be an emotional fool.
What you see now is a correction because everyone that could make money (bankers, lawyers etc) have been paid, let me add, handsomely.
Let’s be clear here, Facebook’s revenues grew 32%. That said, investors are not happy. Stock closed at $21.09 yesterday; 21% drop since July 27th, day after the earnings announcement. 45% drop since the IPO.
Facebook is not your conventional company. Its business model revolves around analyzing ginormous amounts of user data and then innovating mechanisms to monetize it. As of June 2012, it had 872 million active users, but not customers. Its customers are advertisers and we the users are the product being sold.
Facebook is a media network, similar to Google, not a social network. It happens to have a social component, that’s about it. It should be treated similar to any other media network dependent on advertising revenue.
That said, Facebook is worth $9/share as of this writing.
It’s very simple math.
Take yesterday’s closing price, $21 x shares outstanding of 2.74 Billion = $57 billion. But it is not worth $54 billion because it’s 2011 revenue was $3 billion. In tech industry, stocks trade at an average 8 times (conservative) the revenue. Revenue times 8 gives us $24 Billion. That means the market price of its stock should reflect that reality but it doesn’t because if it did, the stock would trade at $9 ($24 Billion/2.74 Billion shares outstanding).
That doesn’t mean Facebook is a dud, it’s not, just overvalued.
Here’s some radical advice for Facebook.
Take the company private, charge 99 cents for monthly access, keep the ads on free accounts, and concentrate on retaining top talent.
Tom Dickson, I don’t know if that’s his real name, has been blending iPhones, iPad etc for a long time now and he recently took a shot at iPhone 4S. Here’s the video:
Yes, it does blend. I just feel terrible that this really did happened.
iPhone 4S has incorporated a feature that will revolutionize things a phone can do. I am talking about Siri, a personal assistant that talks to you and helps you be more productive by taking voice commands. Won’t make coffee but that’s okay, there will some day be an app for that.
Rotary dial, dial pad, touch screen, and now a personal assistant. It must be the 21st century.
Everyone who talks about Siri is referring to her as ‘It’ and sometimes ‘She.’ The voice is that of a robotic female so ‘She’ or ‘Her’ is appropriate but is it really a female name? Turns out, it is.
I googled the name Siri, few baby name generators popped up with the meaning of the name and its origin. It’s a female name with three different origins.
Siri in Hindi means “Godess Lakshmi” or “Godess of Wealth.” In Norwegian it means, “Beautiful and victorious.” In Swahili it means, “Secret.”
When I hear the name Siri, I think Sridevi, a very beautiful Bollywood actress who was quite famous back in the day. Her real name wasn’t Sridevi but it did suit her – pretty and wealthy.
What remains to be seen is if Siri would turn out to be a cash cow for Apple depending on how adaptable and appealing it proves to be. It is the best new feature of iPhone 4S.
No matter if you are PC or a Mac, chances are, when you heard the news about Steve Jobs’ resignation, you had a reaction. The reaction, negative or positive, was the result of a visionary in technology saying:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
- Quote Steve Jobs’ Resignation Letter
Apart from iPhone 3G, I have never used an Apple product. That’s not to say that I wasn’t impressed at the first computer I laid my eyes on, Macintosh Plus, designed by Jobs. My first ever computer was a PC because it was more affordable than a Macintosh, especially in Dubai, where I grew up. If it wasn’t for the price, I think, my dad would have bought a Macintosh for me.
According to History of computer design: Macintosh, “The Macintosh case manifests Jobs’ vision of a computer as an appliance, freeing the user from interaction with circuitry.” Many products we use today, and can’t live without, can be directly traced to Jobs’ vision of creativity. Others were inspired to design and think the way he did. He is the Michael Jackson of the technology business.
Apple, now Jobs-less, is never going to be what it was. Jobs gave Apple his best years and that’s the good part. Sad part, however, is that Jobs is no longer relevant. As chairman of the board, he will not be as involved as he was as a CEO. Jobs is no business man, he is an artist, and needs a canvas. Sure, for next 3-5 years, Apple will keep us busy with its innovations. What happens after that is not yet clear because Tim Cook, new Apple CEO, is a business man not an artist.
Jobs reminds me of this one Abraham Lincolnquote, “Whatever you are, be a good one.” One can say that Jobs didn’t just try to be good, he made sure to be the best.