facebook ipo
DESCRIPTION
En aquesta Friday analitzarem el cas de la sortida a borsa de Facebook i la compararem amb altres empreses tecnològiques que cotitzen a borsa. Des de llavors, les accions han caigut més d'un 50% i el co-fundador i CEO de Facebook, Mark Zuckerberg, s'ha vist obligat a anunciar que no vendrà cap de les seves accions al menys fins el 2014. Per la gent no familiaritzada amb la borsa explicarem els conceptes bàsics per tal d'entendre-la, i analitzarem un fenòmen típic de les empreses que comercialitzen amb la informació: l'Information Gap Value. Era previsible tot això? Es tracta d'una bombolla? Encara han de baixar molt més les accions? No existeixen respostes per totes aquestes qüestions, només es pot analitzar les dades disponibles i discutir-les entre tots per tal de que cadascú es configuri el seu propi criteri.TRANSCRIPT
Facebook IPO
@francescgo
#Ftraining 07/09/2012
First of all
“ Capitalism is the astounding belief
that the most wickedest of men
will do the most wickedest of things
for the greatest good of everyone.
” John Maynard Keynes
Basics
Stock (Capital Social) original capital paid into or invested in the business by its founders.
Basics
Shares of Stock (Acciones) The stock of a business is divided into multiple shares.
Shares represent a fraction of ownership in a business.
Basics
Stock exchange (Bolsa de Valores) A place where shares of stock (and other securities) are traded
Basics
IPO - Initial Public Offering (OPV – Oferta Pública de Venta) Shares of stock in a company are sold to the general public, for the first time.
Why an IPO?
1.
to raise expansion capital
In an IPO, the money paid by the investing public for the newly issued shares goes directly to the company (primary offering)
Why an IPO?
2.
to possibly monetize the investments of early private investors
In an IPO, the money paid can also go to any early private investors who opt to sell all or a portion of their holdings (secondary offering)
Why an IPO?
3.
to become publicly traded enterprises
Enlarging and diversifying equity base
Enabling cheaper access to capital
Increasing public image
Facilitating Acquisitions
Attracting and Retaining talent through liquid equity participation
Largest IPOs
$22,10 b Agricultural Bank of China (2010)
$21,90 b Industrial and Commercial Bank of China (2006)
$20,50 b American International Assurance(2010)
$19,70 b Visa Inc. (2008)
$18,15 b General Motors (2010)
$16,00 b Facebook, Inc. (2012)
Largest Internet IPOs
Pricing of IPO
Underwriters set the pricing of IPOs, and many factors are taken into consideration
Offering price must be low enough to stimulate interest in the stock, but high enough to raise an adequate amount of capital for the company.
Why Facebook IPO?
When the number of Facebook shareholders crossed the 500 threshold,
it had to take the company public
Facebook IPO pricing
Facebook went public on May 18, 2012
Underwriters settled on a price of $38 per share
Facebook debuted with 421 million shares
$38 x 421m = $16 b raised
Facebook IPO
Company 180 million shares
Investors 241 million shares $6,84 b
$9,16 b
Primary Offering Secundary Offering
Distributors of the cake
Facebook IPO Market Capitalization
May 18, 2012 $38 per share
Facebook Share count: 2,7 billion
Market Capitalization: $102,60 b
Facebook Value
90400
6600
83800
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Market Capitalization Real Value
Mill
ion
s o
f U
S $
Market Capitalization Vs Facebook “Real” Value
Market Capitalization Assets ¿¿??
Information Value Gap
Information Value Gap = Financial Value of Facebook Information Assets = $83,80 b Facebook monetizable pieces of information for the last 3 years = 2,11 · 1012 (likes, comments…)*
“like” value =
$83,80 b / 2,11 t = $0,04
90400
6600
83800
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Market Capitalization Real Value
Mill
ion
s o
f U
S $
Market Capitalization Vs Facebook “Real” Value
Market Capitalization Assets ¿¿??
*http://www.brucemacvarish.com/2012/05/creating-value-from-information-assets.html
User Value
User Value = $83.800M / 845M =
$99
2,11 Trillions
Pieces of information for the last three
years
845 Millions
Monthly Active Users (MAUs)
December 2011
2500
Pieces of information for each active user
There was bubble?
87,74
523,71
193,46 170,08
245,14
67,37 15,33
0
100
200
300
400
500
600
25/05/2012
$ b
illio
ns
Market Value
FB APPL GOOG KO (Coca-Cola) MSFT SAN.MC (Banco Santander) GAS.MC (Gas Natural)
PER
PER (Price to Earnings Ratio)
That can be read How many years receiving dividends do I need to make the price of the share
There was Bubble?
74,04
13,65 17,98 20,03
10,69 6,92 6,33
0
10
20
30
40
50
60
70
80
25/05/2012
Pri
ce-t
o-E
arn
ings
Rat
io
PER ratio
FB APPL GOOG KO (Coca-Cola) MSFT SAN.MC (Banco Santander) GAS.MC (Gas Natural)
There was Bubble?
Source: Wikipedia
Facebook After IPO
Facebook after IPO
4,07E+10
1,49E+10
2,57E+10
0,00E+00
5,00E+09
1,00E+10
1,50E+10
2,00E+10
2,50E+10
3,00E+10
3,50E+10
4,00E+10
4,50E+10
Market Capitalization Real Value
US
$
Facebook Value
Market Capitalization Assets Information Value Gap
Information Value Gap Evolution
8,38E+10
2,57E+10
0
2,5E+10
5E+10
7,5E+10
1E+11
25/05/2012 06/09/2012
US
$
Like value evolution
$0,04
$0,01
$-
$0,01
$0,02
$0,03
$0,04
$0,05
25/05/2012 06/09/2012
US
$
User Value Evolution
$99,17
$26,96
$-
$25,00
$50,00
$75,00
$100,00
25/05/2012 06/09/2012
US
$
Market Value Evolution
87,74 40,62
523,71
633,94
193,46 228,73
170,08 171,75
245,14 262,78
67,37 74,64 15,33 13,43 0
100
200
300
400
500
600
700
25/05/2012 06/09/2012
$ b
illio
ns
Market Value
FB APPL GOOG KO (Coca-Cola) MSFT SAN.MC (Banco Santander) GAS.MC (Gas Natural)
PER Evolution
74,04
43,79
13,65 15,89 17,98 20,73 20,03 20,2
10,69 15,67
6,92
15,2
6,33 7,49 0
10
20
30
40
50
60
70
80
25/05/2012 06/09/2012
Pri
ce-t
o-E
arn
ings
Rat
io
PER Evolution
FB APPL GOOG KO (Coca-Cola) MSFT SAN.MC (Banco Santander) GAS.MC (Gas Natural)
Consequences
• CEO Mark Zuckerberg will not sell any more stock for at least a year (he sold $1.1 billion at $38 on the IPO)
• On October 29, 234 million employee-owned shares will become available for sale
• The company will withhold 101 million shares of stock out of a total of 234 million shares that are owed to employees on October 25. (That means: Facebook buys 101 million shares at $19)
http://www.businessinsider.com/facebook-share-buyback-2012-9
In plain English
• Facebook is going to retire the stock it withholds from employees and then give the cash value of these shares to the government (tax payment)
101 million shares x $19 = $1,92 b
But remember…
• Only a few days before its IPO, underwriters raised the expected price of the shares $10. The Company sold 180 million shares
$10 x 180 m shares = $1,7 b
Ponzi Scheme
Fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation
Is Facebook a legal Ponzi Scheme?
So far Facebook is a Ponzi Scheme… at least until the first dividend is provided
“Facebook IPO” by Francesc Gomez-Morales is licensed under a Creative Commons Reconocimiento-No comercial-Compartir bajo la misma licencia 3.0 España License.