FaceBook

  • 07 Feb 2012 at 12:59 PM
  • FaceBook

Facebook Should Look Forward To Receiving A Strongly Worded Letter

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I started out not really caring about the Facebook IPO except as part of a vague stunt-driven desire to get some shares so I could tell you all that I’d gotten some shares. I now think that that plan was foolish, though I look forward to telling you how I was fleeced by retail brokers who pretended that they’d get me some shares. But as someone with a pretty meh reaction to good corporate governance, I’ve developed a certain fondness over the past, um, six days, for Facebook’s terrible corporate governance, which is laid out in a section of the IPO prospectus – right after the Hacker Way – titled “I’m CEO, bitch,”* and which involves Mark Zuckerberg controlling all decisions for the rest of his natural life and any cryogenic extension thereof.

CalSTRS, however, isn’t so sure:

“We are in fact in the beginning stages of engagement with Facebook” over governance issues, Ricardo Duran, a spokesman for the pension fund, said in an interview. “We are planning to send them a letter.”

Well that’s just super. Continue reading »

  • 03 Feb 2012 at 1:46 PM
  • FaceBook

There’s Only One Reason Why Facebook Is IPO’ing: To Access The Public Equity Markets

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How much is Facebook worth? Good God do I not care. Go ask a prediction market. Here’s one:

Another choice is the delightfully named bookmaker Paddy Power, which also puts it at $40, plus or minus $5, which seems pointless, though unlike SharesPost Paddy Power will also let you bet on whether Bono or Bill Gates will ring the opening bell for Facebook’s first day of trading. (Eduardo Saverin doesn’t seem to be an option though wouldn’t that make you just cry?) Forty bucks is a $93bn pre-money equity value if you use Facebook’s pro forma diluted share count, and why not.

Markets for predicting the price of publicly listed securities are … strange, I guess, depending how you slice it. You could argue that in the ordinary course “markets for predicting the price of publicly listed securities” are called “stock markets.” But SharesPost, and its peers like SecondMarket, are of course not really prediction markets though that might be their highest and best use for the next three months. They’re quasi-public exchanges that allow employees and investors to get liquidity and allow dubiously accredited dopes like me to buy shares of unlisted companies relatively easily, though they are also “used car markets where buyers aren’t allowed to check what’s under the hood,” according to some finance professor. My used-car purchasing days were not distinguished by a deep knowledge of automotive engineering and if my first post-college car had a drunken hamster on a rusty wheel under the hood I would probably not have noticed at the time of purchase.* Continue reading »

Bet Goldman Sachs Wouldn’t Have Played Favorites. Guess Ya Should’ve Thought Of That Before Relegating Them To Third Place

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Not sure if the word has gotten out yet, but yesterday afternoon social networking site Facebook filed to go public. Almost as exciting as the news itself (for those who reach self-induced stroke levels of excitement over such things) was the answer to the burning question vis-à-vis which bank would win the coveted and lucrative role of lead bookrunner on the deal. As had been predicted, Morgan Stanley got the job. This happened, we’ve been told, because Morgan Stanley’s “dominant” tech team “has been largely unchanged since the mid-1990′s,” is based in Menlo Park rather than New York, has “seen every tech cycle,” and goes the extra mile to show that beneath their investment banker exteriors beat the hearts of a bunch of guys who really care. When it came to Pandora, which was said to be “wary” of the group, “Michael Grimes, co-head of global tech banking at Morgan Stanley, and his team wore concert T-shirts of their favorite bands from their Pandora profiles, including the Rolling Stones and Black Sabbath, under blue blazers when making their pitch.” In landing the Groupon deal, Grimes and his underlings presumably made sure to note the steal they got on laser hair removal using the site. And, of course, when making the hard sell for LinkedIn and Facebook, the bankers “set up accounts…in a show of support for their prospective clients.” AND YET! It appears only one networking site was granted the ultimate endorsement of Morgan Stanley. Continue reading »

  • 01 Feb 2012 at 6:45 PM
  • FaceBook

Facebook Facebook Facebook Facebook

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Facebook!

One thing about Facebook is that Facebook doesn’t need the money that Facebook is raising in the Facebook IPO that Facebook just filed. (Did you hear?) It’s got almost $4bn in the bank and it can’t even be bothered to pretend that it’s got any plans for what to do with more:

The principal purposes of our initial public offering are to create a public market for our Class A common stock and thereby enable future access to the public equity markets by us and our employees, obtain additional capital, and facilitate an orderly distribution of shares for the selling stockholders. We intend to use the net proceeds to us from our initial public offering for working capital and other general corporate purposes; however, we do not currently have any specific uses of the net proceeds planned.

And while the selling shareholders undoubtedly will be happy to be able to sell in the open market, they can kind of do that now, with robust SharesPost and SecondMarket trading at high-eleven-figure valuations. Basically Facebook is IPOing because it’s got so many shareholders that it is legally required to register so might as well raise a few yards of rainy-day money while it’s at it.

When that’s your posture – and, to be fair, when people are beating down your door to buy your stock – you can be pretty, pretty cavalier with shareholder rights. What that means here is a two-class share structure (insiders get 10 votes per share, the public gets 1 vote), a board of directors that is not required to be independent, and Mark Zuckerberg controlling 57% of the voting power of the shares (while only owning 28%) via really quite all-encompassing voting agreements with current investors, some of which last until he dies. If your theory of public corporations is “they should be controlled by and for the benefit of the public shareholders,” this may trouble you. If your theory is “I’d follow Mark Zuckerberg anywhere,” then, carry on.

Other things to know or avoid knowing: Continue reading »

  • 01 Feb 2012 at 5:23 PM

Mark Zuckerberg Takes A Moment To Reclaim The Word “Hacker”

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If you’ll allow, a quick manifesto: Continue reading »

  • 27 Jan 2012 at 6:45 PM

How Will Morgan Stanley Be Able To Pay Tech Bankers With A Measly $100mm Facebook IPO Fee?

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I really hope that Facebook is just faking us all out with this whole “we’re IPO’ing on Wednesday” thing that they haven’t said, in part because I have yet to park $100k of the Dealbreaker slush fund/Bloomberg budget in Facebook shares on SharesPost. But just in case they actually do something next week let’s analyze the hell out of everything so we can be proven wrong by the filings. Okay? Okay.

One thing to over-analyze is that presumptive lead-left bookrunner Morgan Stanley’s shares did or did not go up on the news that Facebook will or will not file next week and MS will or will not be the lead bookrunner. One reason for the market to shrug off this quasi-news is that Morgan Stanley won’t actually make any money on the deal since Faceook is planning to punch everyone in the face on fees: Continue reading »

  • 16 Sep 2011 at 9:47 AM
  • Banks

Facebook ‘Friends’ Find Unimaginably Cruel Way To Kick Kweku Adoboli When He’s Down

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As the users of Mark Zuckerberg’s poking machine among us can attest, there are many things you can expect from your Facebook friends. You can expect that they’ll keep you abreast of every insignificant moment of their entire lives. You can expect that they’ll post public affirmations about being “stronger than this” following a break-up or a shitty lunch. You can expect that, when taking a trip, they’ll let you know the flight number, when they’re on the way to the airport, going through security, sitting at the gate**, waiting to take off, defying the request to power down their phone, losing said battle, touching down on the runway, waiting for their bags and still thinking about the person across the aisle who gave them a weird vibe. You can expect that they’ll upload countless photos of their trip with at least one set devoted to posing (alone) on the beach like they’re shooting the god damn Sports Illustrated swimsuit edition, having forced their travel companion to play photog. You can expect that they’ll assume you want to be friends with their household pet. You can expect that they’ll ask you to send positive thoughts into the universe when said pet when it comes down with a common cold.

As a card-carrying member of Facebook, UBS trader Kweku Adoboli was aware of the social contract one enters when becoming friends with people on the ‘book and held up his end of the bargain, dutifully ‘liking’ the status messages of friends forced to sit through 30-minute delays at Heathrow and keeping his fingers crossed that Mr. Fluffernutterbigglesworthjosecanseconiner would recover soon. Which is why it must have stung pretty badly when, after all he’s done for his so-called friends, they couldn’t toss him one bone and help him out of a tight spot. Continue reading »