# Facebook IPO...are you going to buy?



## pwrshift (May 18, 2012)

FB opened on the market Friday at $38...rose a little and then fell back to close to the opening price.  Was it a failure?  Before the market opened, the suits were forecasting it might hit $100 a share by the end of he day.  The experts goofed.


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## tompalm (May 18, 2012)

The most over hyped IPO all all times.  I am glad it is over.  Now, the news can move on to real news.


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## LUVourMarriotts (May 21, 2012)

Going to buy?  I read, of the brokerages offering buys for the IPO, the one with the lowest requirement was requiring that you already had at least $250,000 in your holdings account with them.

So no, I wasn't going to buy.


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## geekette (May 21, 2012)

LUVourMarriotts said:


> Going to buy?  I read, of the brokerages offering buys for the IPO, the one with the lowest requirement was requiring that you already had at least $250,000 in your holdings account with them.
> 
> So no, I wasn't going to buy.



You could have transferred a few timeshares over to make up the difference!


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## Timeshare Von (May 21, 2012)

Not a chance!  I don't believe FB will over the long term, pay off for stockholders.

What's worse, Zuckerberg retained majority ownership (51%) so he can never really be thrown out as CEO and a leveraged buyout to regain ownership's control over him, is not possible.

Many insiders to FB have said that he is not a very participatory manager/leader and wants things done his own way.  I don't see him being good for the long haul at FB if/when times get tough for the company.

In the meantime, he and others on the inside of FB have made their m/billions and in the larger sense of things, can not be expected to care about FB forever.

I look for the next step in their history to be a sell-out by Zuckerberg to some other mega-techno company some time in the future . . . a year from now, or five (or ten) but that's how I see FB playing out in American business legacy.


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## TUGBrian (May 21, 2012)

looks like hes lost over 2billion sofar in that IPO....


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## ttt (May 21, 2012)

I'm a buyer when it hits 28.


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## "Roger" (May 21, 2012)

TUGBrian said:


> looks like hes lost over 2billion sofar in that IPO....


I think you have this backwards.  So many people thought "Facebook, major success, can't lose" that the stock was overvalued at its opening.  (Always beware of when taxi cab drivers are in the market thinking that they can make a killing.)  As a result, Zuckerman made a windfall profit on the stocks that he sold as part of the IPO in that they were being sold at an overvalued price.  Now the market is beginning to adjust to the real worth of the company.


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## bogey21 (May 21, 2012)

TUGBrian said:


> looks like hes lost over 2billion so far in that IPO....



How did he lose $2 billion?  He just sold a bunch of stock for a lot more than it was worth!  If he is patient and wants to, he will be able to buy back a bunch of the stock he sold for 50 cents on the dollar!

George


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## TUGBrian (May 21, 2012)

I dont much buy into the "you dont lose anything until you sell it" point of view.  I simply look at the value of something is what I could sell it for today if I had to.

to each his own.


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## MichaelColey (May 21, 2012)

To me, Facebook valuation is pretty simple.  Compare it to Google.  They have fairly close numbers in terms of traffic, unique visitors, time on site, etc.  Google wins on some, while Facebook wins on others.  Both are so large that there's not a lot of growth potential.

The big difference is monetization.  Google has a business model where it's easy to monetize.  They drive a considerable amount of valuable traffic to businesses.  Facebook doesn't.  Facebook traffic is good for branding, but not so good for direct sales.

This results in very different financial results.  While traffic was fairly comparable, Facebook made $2 billion in profit in the past year, while Google made $15 billion.

IMHO, that should translate pretty directly into share price (but it doesn't).  Google has a market cap of roughly $200 billion, about 13 times earnings.  Facebook (at it's IPO) had a market cap of over $100 billion, about 50 times earnings.

One could argue that Facebook has a bit more potential to increase monetization, and perhaps it might be worth a P/E ratio of even 26 (double GOOG's), but even at that a fair price for the stock would be more like $20.


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## Ken555 (May 21, 2012)

+1 for Michael!


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## Linda74 (May 21, 2012)

Yes, I am stupid...bought at $42 and will watch it tank...thankfully, only 100 shares.  My kids complain that I am too conservative with money..well at least not losing money with my other investments..


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## am1 (May 21, 2012)

I think it was almost a given the stock would not soar after the buzz but what happened to the underwriters not propping the stock up?  They must have felt there was nothing they could do.  

Hopefully people selling were buying Appl.


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## pwrshift (May 21, 2012)

My daughter bought 100 shares for $33 today.  She's a big FB fan.

Brian


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## Timeshare Von (May 21, 2012)

TUGBrian said:


> looks like hes lost over 2billion sofar in that IPO....



I told my husband tonight that Zuckerberg married over the weekend solely so that when the stock dropped, he could show a post marriage net worth drop of his personal assets.  Should he divorce, she would get nothing since his worth dropped after they married.  

Shrewd, don't you think?  (Yeah I'm not much of a romantic - lol)


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## cgeidl (May 22, 2012)

*Buying in a month*

Just waiting for the stock to hit ten and then I will buy some shares.Could be in June or latest July.


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## bogey21 (May 26, 2012)

Linda74 said:


> Yes, I am stupid...bought at $42 and will watch it tank...thankfully, only 100 shares.  My kids complain that I am too conservative with money..well at least not losing money with my other investments..



Buy 10,000 shares of PLSB (Pulse Beverage) at 50 cents a share and you will make back everything you lost on FB and then some.  http://www.pulsebeverage.com
 George


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## tompalm (May 27, 2012)

bogey21 said:


> Buy 10,000 shares of PLSB (Pulse Beverage) at 50 cents a share and you will make back everything you lost on FB and then some.  http://www.pulsebeverage.com
> George



Penny stocks, that is not good advice.  Might as well put your money in a one arm bandit.  

By the way, this market is setting up for a sell off.  If it goes down, it will drag FB and 80 percent of the other stocks down with it. 200 day moving average is just a few points away and if the index breaks that, look out below.  Starting to look like last year.


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## bogey21 (May 27, 2012)

tompalm said:


> Penny stocks, that is not good advice.  Might as well put your money in a one arm bandit.



Yeah, they hit and miss.  More misses than hits but when you hit WOW!!  My best is 8 cents to $3.75!!  With a lot of shares this is big money.

George


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## PigsDad (May 31, 2012)

ttt said:


> I'm a buyer when it hits 28.


So... did you buy yesterday?  

```
NASDAQ:FB
May 30, 2012
Day Range: [B]27.86[/B] - 29.55
```
Kurt


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## MichaelColey (May 31, 2012)

You know who SHOULD be buying?  Facebook.  After selling their shares to the public for $38, it would be a steal for them to buy them back at $28.


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## Beefnot (Jun 1, 2012)

MichaelColey said:


> You know who SHOULD be buying?  Facebook.  After selling their shares to the public for $38, it would be a steal for them to buy them back at $28.



How do you figure? A company with a P/E multiple inordinately higher than Google on a fraction of the revenue and profitability is still overpriced at $28.  At $10, then maybe, MAYbe, FB might consider loading up.


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## MichaelColey (Jun 1, 2012)

Beefnot said:


> How do you figure? A company with a P/E multiple inordinately higher than Google on a fraction of the revenue and profitability is still overpriced at $28. At $10, then maybe, MAYbe, FB might consider loading up.


They got $16 billion from the shares they sold.  If they buy all those shares back at $28, they'll still have $4 billion in cash left from the IPO.


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## bogey21 (Jun 1, 2012)

MichaelColey said:


> They got $16 billion from the shares they sold.  If they buy all those shares back at $28, they'll still have $4 billion in cash left from the IPO.



Why not wait for $10 or $15?  Then the cash they can pick up will be even greater.  IMO $15 is a certainty; $10 unlikely!

George


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## siesta (Jun 1, 2012)

MichaelColey said:


> To me, Facebook valuation is pretty simple.  Compare it to Google.  They have fairly close numbers in terms of traffic, unique visitors, time on site, etc.  Google wins on some, while Facebook wins on others.  Both are so large that there's not a lot of growth potential.
> 
> The big difference is monetization.  Google has a business model where it's easy to monetize.  They drive a considerable amount of valuable traffic to businesses.  Facebook doesn't.  Facebook traffic is good for branding, but not so good for direct sales.
> 
> ...


 the real killer for facebook is everyone going mobile. They get paid by their traffic for advertisements, but this only generates money when people use a computer not a smartphone or a tablet. If they start get advertising revenue from the people that are mobile, then they will be more viable in the long run.


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## MichaelColey (Jun 1, 2012)

bogey21 said:


> Why not wait for $10 or $15? Then the cash they can pick up will be even greater. IMO $15 is a certainty; $10 unlikely!


Sure, they could wait, and I agree it's not worth the current valuation, but I was just making a point.

A buyback by FB would do two things.  They could get their stock back for less than they sold it for.  And it would boost the share price by showing confidence.

While I suggested that they could buy back at current levels, that's certainly not possible.  Once they (or anyone else with that much resources) started buying, the price would go up.


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## PigsDad (Jun 1, 2012)

MichaelColey said:


> Sure, they could wait, and I agree it's not worth the current valuation, but I was just making a point.
> 
> A buyback by FB would do two things.  They could get their stock back for less than they sold it for.  And it would boost the share price by showing confidence.


If Facebook took the money they raised during the IPO and turned around and bought back their stock right away, that would raise the question why they went public in the first place?  

The reasons companies go public is to raise capital, because they believe they can generate more profits using that capital to grow the business.  Turning around and buying back their own stock would send the signal that management doesn't have a better use for that money.  Stock price is based on future earning potential -- if Facebook is saying they can't use the capital to increase future earnings, that would put significant downward pressure on the stock.  

Using a big chunk of that capital to buy back stock at this time would be corporate suicide.

Kurt


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## am1 (Jun 1, 2012)

Maybe they will use the money to buy out RIM.  It is in very bad shape.  Someone will be buying it.  But I am sure the interested parties are waiting on the price to drop further.


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## am1 (Jun 1, 2012)

PigsDad said:


> If Facebook took the money they raised during the IPO and turned around and bought back their stock right away, that would raise the question why they went public in the first place?
> 
> The reasons companies go public is to raise capital, because they believe they can generate more profits using that capital to grow the business.  Turning around and buying back their own stock would send the signal that management doesn't have a better use for that money.  Stock price is based on future earning potential -- if Facebook is saying they can't use the capital to increase future earnings, that would put significant downward pressure on the stock.
> 
> ...



And "Theft".  I do not believe it would be but the the people that bought the stock because they wanted to be a part of Facebook might think that.


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## Beefnot (Jun 1, 2012)

am1 said:


> Maybe they will use the money to buy out RIM.  It is in very bad shape.  Someone will be buying it.  But I am sure the interested parties are waiting on the price to drop further.



There would be absolutely no strategic rationale for FB to buy RIM.  MSFT or ORCL maybe, but not FB.


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## Ken555 (Jun 1, 2012)

Beefnot said:


> There would be absolutely no strategic rationale for FB to buy RIM.  MSFT or ORCL maybe, but not FB.



I don't know why anyone would want to buy RIM. They've really destroyed the company over the last few years and simply aren't competitive any longer. I can see them continuing as a niche player in certain markets for years, but it wouldn't sustain their current size, and I suspect they would have trouble changing the corporate attitude and structure at RIM to accomplish such a change successfully.


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## geekette (Jun 6, 2012)

Ken555 said:


> I don't know why anyone would want to buy RIM. They've really destroyed the company over the last few years and simply aren't competitive any longer. I can see them continuing as a niche player in certain markets for years, but it wouldn't sustain their current size, and I suspect they would have trouble changing the corporate attitude and structure at RIM to accomplish such a change successfully.



I agree.  I think their best days are behind them.  Besides, I can't see why FB would need them?


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## hypnotiq (Jun 6, 2012)

This should be no surprise to anyone. There was another thread on this when the IPO was first announced and I said they were ridiculously overvalued in the first place. There is no way their business nor business model command 100 billion dollar valuation. Their lack of ability to monetize the mobile market is killing them. Each month the number of users on mobile vs traditional browsers grows. It already favors mobile over browser.

The only thing that has helped keep the stock up thus far are the underwriteres. The stock will lower itself over the next couple months and settle in around $13-$16, where it belongs.

I had a bunch of Class B stock I bought years ago that I dumped the second they announced the IPO. Anyone with rationale thought process saw this coming.


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## Ken555 (Jun 6, 2012)

hypnotiq said:


> I had a bunch of Class B stock I bought years ago that I dumped the second they announced the IPO. Anyone with rationale thought process saw this coming.



I also suspected it might have a problem given their financial reality, but I think the warning bells should have sounded when they increased the number of shares just days prior to the IPO. I have read that there were quite a number of shareholders who wanted to sell, and somehow I think many knew that $38 was a great selling price... 

I just hope this doesn't sour upcoming IPOs for the rest of the year. I know there are some financially sound companies planning on going public in tech, and the FB situation may influence results.


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## hypnotiq (Jun 6, 2012)

Unfortunately, I think this is going to affect upcoming IPO's simply because its going to make investors wary.

Between this (NASDAQ issues on opening day)
http://blogs.wsj.com/marketbeat/201...llion-fund-to-compensate-for-facebook-losses/

and 

this (Underwriters helping sellers short the stock)
http://online.wsj.com/article/SB10001424052702304065704577424733907622256.html

People are going to be very bitter for the near future.


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## MichaelColey (Jun 6, 2012)

Ken555 said:


> I just hope this doesn't sour upcoming IPOs for the rest of the year. I know there are some financially sound companies planning on going public in tech, and the FB situation may influence results.


If it makes it possible to buy shares in other more solid IPOs for less, I sure won't complain.  

It's kind of like weathermen and snow predictions.  They'll predict flurries, until they get a 12" surprise.  Then they'll predict 12" for the next several flurries.


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## bogey21 (Jun 6, 2012)

hypnotiq said:


> The stock will lower itself over the next couple months and settle in around $13-$16, where it belongs.



I agree.  I don't own FB (and don't want to) but IMO they will have to impose a monthly (or quarterly) membership fee for the stock to jump.

George


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## am1 (Jun 6, 2012)

bogey21 said:


> I agree.  I don't own FB (and don't want to) but IMO they will have to impose a monthly (or quarterly) membership fee for the stock to jump.
> 
> George



That would never work.  Maybe for extras.  They have a large and dedicated customer base.  Just have to capitalize on that with out turning people off.


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## Ken555 (Jun 6, 2012)

bogey21 said:


> I agree.  I don't own FB (and don't want to) but IMO they will have to impose a monthly (or quarterly) membership fee for the stock to jump.
> 
> George



All they really need to do is improve revenue. They can do this in a myriad of ways which wouldn't alienate their reason for existence...you know, the millions who live on FB to announce to their friends what they ate that morning...


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## Beefnot (Jun 6, 2012)

FB has the opportunity to be a long-term, entrenched social media giant.  But that does not necessarily equate into substantial profitability, to the extent a $100 billion valuation would warrant.  The two need not coexist, even though that's what the investor community wanted and expected.  It is entirely plausible that they become a $3 - $5 stock that remains a permanent fixture in the social media landscape.


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## MichaelColey (Jun 6, 2012)

A $3-$5 stock is just as unreasonable as a $38 stock.  They had earnings of $0.39 per share over the past year, and are projected to earn $0.65 per share next year.  If the share price were $3, that would be a forward P/E ratio of under 5.  They would be a screaming buy at that level, IMHO.

$0.65 earnings times a P/E ratio of 30 (much more reasonable for a fast-growing tech company) is a share price of $19.50.  I think that's reasonable, and if they drop much below that, I'll probably be a buyer.

They DO have quite a bit of potential to grow revenues and earnings.  Charging for access would destroy them (or empower a new competitor that doesn't charge).  They need to focus where the money is, and that's COMPANIES on Facebook.  Companies want those eyeballs and are willing to pay for them.


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## Beefnot (Jun 7, 2012)

MichaelColey said:


> A $3-$5 stock is just as unreasonable as a $38 stock.  They had earnings of $0.39 per share over the past year, and are projected to earn $0.65 per share next year.  If the share price were $3, that would be a forward P/E ratio of under 5.  They would be a screaming buy at that level, IMHO.
> 
> $0.65 earnings times a P/E ratio of 30 (much more reasonable for a fast-growing tech company) is a share price of $19.50.  I think that's reasonable, and if they drop much below that, I'll probably be a buyer.
> 
> They DO have quite a bit of potential to grow revenues and earnings.  Charging for access would destroy them (or empower a new competitor that doesn't charge).  They need to focus where the money is, and that's COMPANIES on Facebook.  Companies want those eyeballs and are willing to pay for them.



If FB cannot successfully monetize the shift to mobile, their earnings will erode. Long term, $3 - $5 is not unreasonable at all unless they can successfully change their business model (no small feat), or use their newly acquired cash horde to completely evolve their business beyond simply social networking altogether.


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## PigsDad (Aug 16, 2012)

Facebook trading below $20 today -- almost half of the original IPO.

Have those of you that bought bailed yet?  

Kurt


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## Elan (Aug 16, 2012)

Might be a decent time to speculate long (for a trade, not an investment).  A good short squeeze could easily drive this up to $26-27 in a few days time.  Trail with a 5% stop.


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## Beefnot (Aug 16, 2012)

If you have some disposable cash to take a flyer, buy some $16 November puts ($14 if you are adventurous) and life will be grand...


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## MichaelColey (Aug 18, 2012)

I suspect that at some point they'll figure out how to monetize their platform much better and increase their earnings to the point where their stock price is justifiable, but I still think there's too much risk at current levels.  Who knows where their stock will bottom out.  It could take a year or more before they hit bottom and turn around.


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## Ken555 (Aug 18, 2012)

I've been asking around, and it seems that none of my friends have bought the stock (or will admit to doing so). Given that some of them have, in the past, done crazy moves in the market, I think this is rather telling to me. Many of those I asked are also in the tech industry, fwiw, completely unscientific etc.

On a related note, I haven't checked my Facebook account more than twice in the last two months (on both occasions I was asked by a friend to look at a post, otherwise I wouldn't have bothered). Facebook is so unimportant to many of us, and I wouldn't be surprised to learn that the stock price has encouraged many to stop using the service.


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## Beefnot (Aug 18, 2012)

Elan said:


> Might be a decent time to speculate long (for a trade, not an investment).  A good short squeeze could easily drive this up to $26-27 in a few days time.  Trail with a 5% stop.



That short squeeze hasn't worked out thus far. There may be too many shares being released and too little demand to squeeze the shorts.  If you are long on FB, it is advisable at this point to hedge the downside with some put options.  Especially with earnings on Oct. 25th and the humongous lockup release in November. If earnings os not overwhelmingly positive, it might get UGLY.


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## Courts (Aug 18, 2012)

As time goes on, I am more convinced that investing in the stock market is very similar to going to a casino in Vegas.  

.


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## pacodemountainside (Aug 18, 2012)

Lets see!  Stock goes up or down! 50/50

In Vegas  win or lose   50/50

Since  S & P  and  NASDA are not adding to their  stocks in near future, big jump from index  funds having to buy is  moot.

Earlier buyers are  wanting to cash out. Another lockup expires in November!

Go with Jim!

About only time I look at is when  I get e-mail saying check this out. Reminds me of the Christmas  news letter rather than a  card!




Are We All Braggarts Now? 

Boasting Epidemic Goes Viral; Crowing Boosts Self Esteem but It's Annoying

By ELIZABETH BERNSTEIN-WSJ


Friends, family and co-workers: I think you're fabulous—just not quite as fabulous as you think you are.

Consider your Facebook status updates:


Elizabeth Bernstein on Lunch Break looks at bragging, including why do people do it and what can we do about it.
.
Best gift ever from the best husband ever.

Swam 30 minutes at a very fast time despite the large amount of Chardonnay served to me on the plane last night.

Got my first royalty check for my book!

Sunset sail. Turned into a moonlight sail. Shooting stars everywhere…Perfect.

A benign reading would be that these are just typical daily updates. But folks, this is bragging, whether you recognize it or not. And it's out of control. How did this happen?

Clearly, the Internet has given us a global audience for our bombast, and social media sites encourage it. We're all expected to be perfect all the time. The result is more people carefully stage-managing their online image.

Boasting isn't just a problem on the Internet. In a society of unrelenting competition—where reality-show contestants duke it out for the approval of aging celebrities and pastors have publicists—is it any wonder we market ourselves relentlessly?

Live Chat: Bragging in the Facebook Age
Read the full transcript of the conversation at WSJ.com/Juggle.
Vote: Have your interactions affected personal relationships?


In part, you can blame the economy. In the most competitive job market in memory, the lesson is clear: You must demonstrate—on multiple platforms—that you excel above all others.

Changes in parenting style also play a role. Nowadays, every moment—first day of school, exhausted nap in the back seat of the car—is documented. The problem is that these shared moments can easily come off as crowing about how great Mom and Dad are to have raised such an adorable kid. 

We've become so accustomed to boasting that we don't even realize what we're doing. And it's harmful to our relationships because it turns people off. 

So why keep it up?

"We brag because we can," says Julie Hanks, a licensed clinical social worker who has a therapy clinic in Salt Lake City. "And a lot more people are listening." 


People brag for all sorts of reasons, she says: to appear worthy of attention or love or to try and cover up our deepest insecurities. To prove to ourselves that we're OK, that people from our past who said we wouldn't measure up were wrong. Or simply because we're excited when good things happen to us. 

And talking about ourselves feels good. According to the results of a series of experiments conducted by Harvard University neuroscientists and published in May in the Proceedings of the National Academy of Sciences, the reward areas of our brain—the same areas that respond to "primary rewards" such as food and sex—are activated when we talk about ourselves. We devote between 30% and 40% of our conversation time to doing just that, according to the study, which didn't focus on boasting specifically, but on self-disclosure.

In one experiment, the researchers offered people small amounts of money to answer questions about themselves or others. They generally were willing to forgo earnings in order to talk about themselves.

Unfortunately, some people can't seem to tell the difference between sharing positive information that others might actually want to know and flat-out crowing. Let me help: Bragging involves comparison, whether stated or implied. "It's being overbearing and showing excessive pride," says Ms. Hanks.

Often, bragging is in the eye of the beholder, as Faith McKinney found out at a church picnic one recent Sunday. The Indianapolis postal-service worker, 45, was telling an older member of her congregation about the interviews she does with celebrities for her freelance gig at a local online entertainment magazine, when her cousin—the one she donated a kidney to a few years ago—suddenly piped up: "There she goes again, dropping names."

"You could have knocked me over with a feather," says Ms. McKinney, who admits she mentions the famous people she's met at every opportunity because she feels this makes her more interesting

.
She continued her story—and even dropped a few more names, on purpose. But she felt humiliated, especially when she remembered that another relative had recently asked her why her "big head" was always in the photos of work she posted online. "If these are people who love me saying this, what am I to expect from strangers?"

According to yet-to-be-published research at Columbia University, browsing Facebook or another social media site increases our levels of narcissism as well as our self-esteem. 

And while we're more likely to be modest with our friends and family in person, these are the people we most want to see our enhanced updates online, says Keith Wilcox, assistant professor of marketing at Columbia Business School, who conducted the study.

"Their opinions matter more," he says, adding that online, the usual social norms of modesty don't necessarily hold.


"It's become a phenomenon where if someone posts a status update and 500 people see it and no one objects, it must be true," says Jennifer Mirsky, 45, a digital content strategist in New York. 

"But could it really be that everyone else has a husband as thoughtful as the heroes of romance novels, children who combine the brilliance of Einstein with the winning charms of Shirley Temple, and jobs packed with wall-to-wall glamorous events?" 

Ms. Mirsky says her strategy is to simply hit the "like" button and move on. "You input one keystroke of indeterminate meaning to say 'hooray for you!' " she says. 

So how should you deal with a braggart? 

"Feel sorry for them, because they're doing this impulsive, destructive thing that won't help them in the long run," says Simine Vazire, a research psychologist and associate professor at Washington University in St. Louis. Research on self-enhancement shows that people who brag make a good first impression, but that it diminishes over time. 

When Ian McKenzie, 30, a schoolteacher in Lincoln, U.K., goes out to dinner with his wife and their friends, he says, everyone soon gets around to bragging—about the gadgets and cars they own, their kids, their vacations. "I have my fill of it and start to act up," he says.

He mentions how he went to school with Prince William. (He attended St. Andrews in Scotland at the same time but never knew the prince.) Or he tells of the time he saw supermodel Kate Moss. (She got out of a car near where he was walking; he had no idea who she was until his wife clued him in.) 

The reaction? "Stunned silence," he says. "Hopefully, it will bring the pudding course on quicker and there will be a rush for the door."

Write to Elizabeth Bernstein at Bonds@wsj.com or follow her column at www.facebook.com/EBernstein-WSJ


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## Elan (Aug 18, 2012)

Beefnot said:


> That short squeeze hasn't worked out thus far. There may be too many shares being released and too little demand to squeeze the shorts.  If you are long on FB, it is advisable at this point to hedge the downside with some put options.  Especially with earnings on Oct. 25th and the humongous lockup release in November. If earnings os not overwhelmingly positive, it might get UGLY.



  I didn't say I was going to play it.  But short squeezes are a great way to make some very quick money on equities one would have no interest in owning otherwise.  I almost always check short interest on a high profile stock like this if I'm thinking about playing.


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## Ken555 (Aug 19, 2012)

Beefnot said:


> That short squeeze hasn't worked out thus far. There may be too many shares being released and too little demand to squeeze the shorts.  If you are long on FB, it is advisable at this point to hedge the downside with some put options.  Especially with earnings on Oct. 25th and the humongous lockup release in November. If earnings os not overwhelmingly positive, it might get UGLY.



It's not ugly already?


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## Beefnot (Aug 19, 2012)

Ken555 said:


> It's not ugly already?



Ugly is when it hits sub-$12 per share.


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## Ken555 (Aug 19, 2012)

Beefnot said:


> Ugly is when it hits sub-$12 per share.



I suspect those who bought at >$30 will dispute this opinion.


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## Beefnot (Aug 19, 2012)

Ken555 said:


> I suspect those who bought at >$30 will dispute this opinion.



True that.


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## Jestjoan (Aug 20, 2012)

*Facebook stock*

http://www.huffingtonpost.com/2012/...989.html?1345478180&ncid=edlinkusaolp00000009


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## "Roger" (Aug 20, 2012)

Tying in with Paco's post ...

I noticed with regard to people who bet on football, whenever they get it right, they brag about how they had it figured out (so and so would have a good matchup, so and so never does as well in cold weather, etc., etc.).  Whenever they lose a bet, they say well it was a bet and that's gambling.

Put differently, all of their wins are because they outsmarted the odds makers.  All of their loses are just what you would expect some of the time from making bets.  Since none of their wins were luck, they must be truly unlucky to lose all of their just plain bets.

Same thing for the stock market. Whenever someone makes a good gain they will tell you that they knew this company was going to do well because (yada, yada, yada).  Stock market loses ... just bad luck.  Again, they must really be unlucky given that they never had a lucky gain ... all of their gains were because they were better analysts than other investors.  Just their loses are a matter of (unfortunate) gambles.


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## Beefnot (Aug 20, 2012)

"Roger" said:


> Tying in with Paco's post ...
> 
> I noticed with regard to people who bet on football, whenever they get it right, they brag about how they had it figured out (so and so would have a good matchup, so and so never does as well in cold weather, etc., etc.).  Whenever they lose a bet, they say well it was a bet and that's gambling.
> 
> ...



Several months ago, someone asked me if he would be better off investing $500 in an ipad or a share of Apple stock (what it was trading for at the time).  I told him if he was intent to invest in a depreciating asset, then at least with the ipad he has some utility to show for it.  Oh how I was monumentally off the mark on that one.


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## pacodemountainside (Aug 21, 2012)

Read and weep!

Don't fight the  tape!

Don't sell short and potentially  unlimited losses. Use puts and know your maximum loss up  front

He who sells what isn't hisn, must pay it  back or go to prison as my college Investments prof was fond of saying!

BAILING OUT
By SHAYNDI RAICE

Peter Thiel, Facebook Inc.'s FB -3.80% earliest investor and a board member, has sold the majority of his shares in the social network, as restrictions on insider selling begin to lift.


Mr. Thiel, a partner at venture-capital firm Founders Fund, invested $500,000 in Facebook in 2004 as its first major investor when the company was valued at a mere $4.9 million.

Peter Thiel, famed venture capitalist and early investor in Facebook, sold more than 20 million shares of Facebook after his lockup expired last week. David Benoit has details on Markets Hub. Photo: Getty Images.
.
Mr. Thiel has now made more than $1 billion from his Facebook investment, and he still owns stock worth about $112 million. On Monday, Facebook's shares rose 5% to $20.01.

In a filing Monday, Mr. Thiel disclosed that he sold 20.1 million Facebook shares, and distributed another 2.2 million shares to investors, as part of a selling plan known as a 10b5-1 plan that he agreed to in May. The sales leave him with about 5.6 million shares.

Mr. Thiel sold the most recent tranche of Facebook stock for an average of $19.73 a share late last week, netting him about $395.8 million. Had he sold the 20.1 million shares at the time of the IPO—when the stock price was $38—it would have been valued at $762 million.



Facebook's History


.But Mr. Thiel will still make an immense profit on his small bet. He already sold some Facebook shares before the company went public, and in the May public offering, sold 16.8 million shares for $638 million.

A Facebook spokeswoman declined to comment. A spokesman for Mr. Thiel declined to comment.

The sale comes at a sensitive time for Facebook. Last week, more than 271 million Facebook shares came onto the market after the expiration of a "lock-up period" forbidding sales by insiders. The new shares caused Facebook's stock to drop to about half the value of its IPO price.

It isn't unusual for early investors to sell their stakes in public companies, especially if the company was private for many years. Facebook Chief Executive Mark Zuckerberg was loathe to take the company public, but said he did so in part to provide liquidity to employees and early investors, like Mr. Thiel.

Facebook faces more lock-up expirations in October, November and December, which will put more than 1.4 billion Facebook shares onto the market. 

Mr. Thiel is a Silicon Valley veteran who founded electronic payments company PayPal in 1998 and served as its chairman and CEO before selling PayPal to eBay Inc. EBAY -1.47% for $1.5 billion in 2002. He is also the founder of hedge fund Clarium Capital Management and has invested in other social media start-ups like social games maker Zynga Inc. ZNGA +0.17% and professional networking site LinkedIn Corp. LNKD +1.81%

—Scott Thurm contributed


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## hypnotiq (Aug 24, 2012)

Finally have some free time to surf forums again.

Hmmm. Looks like what I predicted to happen, happened.

Also, looks like Zynga is going down fast (and with FB valuation tied to it, thats not good)
http://arstechnica.com/business/201...ice-plummets-company-hemorrhaging-top-talent/

Additionally, Instagram is learning the hard way of making a financial deal based on stock price. 2/3rds of the price paid for Instagram was from FB shares of stock, which have dropped 30% since the deal. Whoops.


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## Beefnot (Aug 24, 2012)

hypnotiq said:


> Finally have some free time to surf forums again.
> 
> Hmmm. Looks like what I predicted to happen, happened.
> 
> ...



Seeing as Instagram was a $50 million company that was purchased for $1 billion, they shouldn't be complaining.


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## hypnotiq (Aug 24, 2012)

Shit, I think $50mil is generous. 

I find it pretty astounding that companies are being given these ridiculous valuations given what they are "providing".


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## am1 (Aug 24, 2012)

hypnotiq said:


> Shit, I think $50mil is generous.
> 
> I find it pretty astounding that companies are being given these ridiculous valuations given what they are "providing".



Me as well but with the internet they instantly get a worldwide market.


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## Ken555 (Aug 31, 2012)

FB at $18 today.


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## hypnotiq (Aug 31, 2012)

Down down baby...

Also the best is yet to come...
On November 14, as the biggest lock-up expires, Zuckerberg and other investors will be allowed to sell theirs, should they so choose—1.2 billion shares of the company will be made available.


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## Beefnot (Aug 31, 2012)

I was planning to load the boat on put options in advance of that date, until I got walloped by Yelp's recent masssive lockup release that actually created a short squeeze. Go figure!


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## Elan (Aug 31, 2012)

Beefnot said:


> I was planning to load the boat on put options in advance of that date, until I got walloped by Yelp's recent masssive lockup release that actually created a short squeeze. Go figure!



  Funny you mention that.  I was going to cite YELP's recent move as an example of how one can get toasted by short covering.  I was long YELP a while back, rode it for a few months and eventually sold for about a 3% loss.  Just felt it was too much risk for the potential reward.  One has to have a strong stomach to play the internet stocks (FB, YELP, ZNGA, LNKD, etc).


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## beanie (Sep 26, 2013)

Wish I would of bought when this thread was going on . Facebook went over $50 a share today .


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## am1 (Sep 26, 2013)

beanie said:


> Wish I would of bought when this thread was going on . Facebook went over $50 a share today .



Im still happy I did not take the risk.


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## pwrshift (Sep 26, 2013)

I'm too old to take a stake in a risky stock That doesnt pay dividends, even though it might go to $300 by next year when Twitter comes out!

Brian


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## geekette (Sep 26, 2013)

pwrshift said:


> I'm too old to take a stake in a risky stock That doesnt pay dividends, even though it might go to $300 by next year when Twitter comes out!
> 
> Brian



It's not so much that I'm too old, it's just that it doesn't fit my strategy.  Kudos to those of you who did well.


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## Beefnot (Sep 26, 2013)

Boy was I phenomenally wrong about FB back then. Although recently I did by some out of the money call options right before their earnings release and made about 3500% return (no typo). Had I bigger huevos and held my calls longer, I could have made 7000%.


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## MichaelColey (Sep 27, 2013)

beanie said:


> Wish I would of bought when this thread was going on . Facebook went over $50 a share today .


That's a 31% increase over the past year and a half.  That's nothing to sneeze at, but over the same time the Nasdaq has gone up 36%.  I wouldn't consider a slightly sub-market performance during a bull market to be that desirable.


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