By Christian Sgrignoli:

The true value of the Facebook (FB) common A stock is a difficult puzzle. There are too many moving parts for definitive assumption-making. Modeling future free cash flow shows the relationship between market expectations and the value of the stock. The thesis on FB growth needs to be analyzed and benchmarked. In this article, I will speculate on qualitative factors then model market expectations for the $38 IPO price.

Qualitative

Management

For most companies, management has a strong correlation with long-term performance. For Facebook, this relationship is exacerbated. FB is a “controlled company” with CEO Mark Zuckerberg controlling 55.9% voting power holding common B shares. He is often perceived as an eccentric tech wiz that is not motivated by money. In the S-1, Zuckerberg explains that Facebook is focused on influencing the flow of information. The company was started for a social mission and not incorporation.

To be a shareholder

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By Kevin Quon:

Facebook’s (FB) recent sell-off upon its initial public offering stands as a reminder that the surrounding market uncertainty that has come to characterize the nascent social media sector has blurred the lines of what entails an opportunistic growth play. On Thursday, May 17, the company sold 421 million of its IPO shares to underwriters at $38 each. In total, Facebook raised $16 billion in a record IPO that was expected to have a well-received opening day. Yet a lackluster performance on Friday ultimately ended with underwriters coming in to support the share price. This negative sentiment was only further reiterated by the rampant sell-off that occurred on Monday, May 21, in which Facebook’s shares trimmed 11% off of the previous close to end the day at $34.03.

In all fairness, the company’s hype had been bolstered along the way. Mispriced IPOs found in LinkedIn (LNKD) and Yelp (YELP) did all

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By Asset Investing:

The Offering

A California based company is bringing professional aesthetic treatments into customers homes at a fraction of the cost of the doctors office. Tria Beauty (TRIA) offers two lines of aesthetic light-based treatments, a Hair Removal Laser and Skin Perfecting Blue Light. The healthcare company is looking to raise $64 million in an initial public offering set to begin trading on May 24th. Tria Beauty is pricing 4.6 million shares at a range of $13.00 to $15.00 per share, giving the company a total market cap of about $270 million. The managers underwriting the deal are Morgan Stanley (MS), Piper Jaffray (PJC), and Well Fargo Securities (WFC).

Tria’s Business

Tria Beauty’s best selling product is its Hair Removal Laser. The diode laser device is designed to reduce hair growth and provides results comparable to equipment used by physicians. The device was approved for over-the

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By Felix Salmon:

Matt Levine had a very wonky post on Friday afternoon about the dynamics of the Facebook (FB) IPO in general and of the very misunderstood greenshoe option in particular. Now that we’ve all had a nice relaxing weekend, it’s maybe worth revisiting that greenshoe, because it’s actually possible, given Facebook’s tumbling share price today, that Morgan Stanley (MS) will make a substantial amount of money on it.

First, it’s worth explaining how the greenshoe option is meant to work. In the IPO, the underwriting banks — there were lots of them, but let’s just call them all “Morgan Stanley”, for simplicity’s sake — sold 484 million shares of Facebook at $38 each. At the same time, they bought 421 million shares of Facebook from the company and its investors, at $37.582 each. The underwriter’s fee of 1.1% is the difference between those two numbers: if you buy at $37.582 and

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By Andrew Butter:

Do the math. At the end of trading on Friday, May 18th, Morgan Stanley (MS) had 162 million shares left, JPMorgan (JPM) had 82 million and Goldman Sachs (GS) had 63 million, that totals 307 million out of 421 million, which means they sold net after the buy-backs in the afternoon, a grand total of 111 million or 26%.

Or did I read the article in The Telegraph wrong? Apparently 570 shares were traded, so allowing for a bit of flipping, the underwriters sold about 300 million shares in the morning and bought back 200 million in the afternoon. Felix Salmon says Facebook is …”brand-new company, which no one knows how to value”.

Well excuse me! Does that imply that the best and the most beautiful of the venerable mega-shadow-banks do not know how to do a valuation? How could that possibly be?

Come on guys, show some respect, after

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By IPOScoop:

But the die had been cast earlier.

To re-cap: Facebook’s (FB) IPO was priced at $38 per share. It opened with a pop at $42 and narrowly avoided a flop by closing at $38.23. The entire day was hounded by reports of major execution problems.

The deal: Facebook and its inside shareholders planned to raise $10.6 billion by offering 337.4 million shares at $28 to $35 each. In the end, they raised $16 billion by offering 421.2 million shares at $38 each. The size was increased by slightly more than 50 percent. That’s when ECON 101 kicked in – supply versus demand.

Judging by Facebook’s close — up just 23 cents per share from its initial offering price — it seems as if the supply side was increased enough to satisfy the demand side.

Blind Hysteria

One thing got overlooked in all the hysteria. The stock market was not in

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By Steel Reserve:

As a poker player, I contrast gambling with wagering. Wagering is when there is no house advantage, the odds can be readily estimated, and the outcome is not purely dependent upon chance. Anything else is gambling – placing a bet when the house has an advantage and there’s no control over the outcome.

Rick Summers of Morningstar says Facebook (FB) is a good buy, even though no one can yet track how many FB users are buying products and services as the result of advertising. He notes that “[t]here is a lack of best practices for advertisers to measure the return on their advertising dollar.” However, he says this is offset by FB’s “massive” user base.

I have nothing against Mr. Smith or Morningstar. But at this point, it feels like we’ve gone back in time to when all that mattered where “clicks” and “eyeballs.”.One can only imagine the amount

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By TechCrunch:

By Dan Scholnick

Judging by many of the headlines on Friday, you might think that Facebook’s IPO was a miserable failure. The Wall Street Journal declared, “Facebook’s IPO Sputters,” and our very own TechCrunch declared that bankers were “struggling” to keep the share price up. Nevermind that it was the highest ever IPO valuation and one of the largest sums of money ever raised by a U.S. company. According to the pundits, what really matters is that the stock price didn’t increase in value-or “pop”-post IPO and is being propped up by banks. Taking bets on whether an IPO will “pop” provides entertaining fodder to help pundits promote their interests, but it misses the point. This view represents a fundamental misunderstanding of the purpose and economics of an IPO. By the correct measures, the Facebook IPO (FB) was a resounding success. Let me explain why.

1. The best IPOs maximize

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Facebook (FB) had its eagerly anticipated initial public offering (“IPO”) on Friday and it was one of the more exciting trading days in recent history. After an opening IPO cross in the upper $40s, the stock plummeted back to its IPO price of $38 when it is widely believed that the offering underwriters had to step in to support the price. When trading was bouncing off the $38 support level, I was glued to my monitor to see if the IPO price would break; this occurring in both the late morning and towards the close as the chart reveals.

Taking a step back, the objective of an IPO is to raise funds for the offering firm and its investors without “leaving money on the table” for selling shareholders. IPOs commonly appreciate significantly on the first day for a multitude of reasons such as a shortage of demand. The benchmark for

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By Harris Roen:

The Initial Public Offering (IPO) of Facebook Inc. (FB) has been dominating the news, but I am more interested in another IPO that is developing. One of the largest solar installers in the country, SolarCity, has filed a confidential application to the SEC to create an IPO of its shares. This is an exciting development, and is reflective of a new theme in solar investing that is worth following.

The smart alternative energy money is moving toward solar installation companies, not solar component manufacturers. Considering that there has been much focus on solar bankruptcies in the past year, including Solar Millennium, Evergreen Solar, Solar Trust of America, and the infamous case of Solyndra, this solar IPO looks to be the hallmark of a new trend. And how this IPO turns out should be very telling as to whether or not this trend has legs.

Since the application was just submitted

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