Facebook IPO. Could the Share open at 37 Dollars and go to 67 Dollars?

The Facebook IPO + my third blog on the matter.
Why? Because you're sick of it?


Because I keep getting asked about it.
And I'm going to give a view on the price + what will happen. Although the headline might give it away.


Of course I'm not a financial bloke (clearly, screams my friends) but I do have an understanding of a Nasdaq IPO having been through one as an isp and maybe, I have some understanding of the space. I also trade Forex online and some equities (I generally don't like them though).


But I'll make this shortish because I've dealt with the ins and outs before..... 


(if you're interested here http://streamabout.blogspot.com/2012/05/facebook-ipo-letter-from-zuckerberg-and.html and here http://streamabout.blogspot.com/2012/05/facebook-ipo-may-18.html).


Bizarrely well read posts, actually.


The view always revolves around these issues;


1. Interest in the Stock (Share). 


This is gauged both by comment/pr and the roadshow run by Facebook. I can tell you interest is HUGE, bigger than anything. Massive. (Although some wall street types took offence to The Zuck turning up in a hoodie. Respect.)


And it's being hyped by investors who deliberately want to drive up the price so they can profit. You can read their so called "blogs" which in "giving advice" are doing so for their own reasons. I'm not.


Shares will be bought by "ordinary" investors (Moms & Pops and Facebook users/supporters don't forget) and the pros know that - so they see a real chance to make money here. Interesting too the role of Morgan Stanley- at the forefront of recession causing it's argued.


If interest is huge, generally share price will rise.


2. Company performance. 


We all know Facebook so in this case it's practically irrelevant.
They will tell you that the share price is based on company fundamentals blah blah blah. Bollocks in this case. And in Googles, Groupon, LinkedIn.....


3. Access to shares. 


If you haven't opened a brokerage account, you need to do so quickly in order to be able to buy shares. Brokers might limit share dealing to certain clients under certain conditions (they see this as a windfall too) and disgracefully in some cases. More or less a "if you lodge this amount, I'll get you access".


When you hear talk of a "rationing of stock", it drives up price.


4. Price. 


We won't know the price until the market closes on May 17 and then that price is traded on opening on May 18th. But we do know a band of 28-35 usd has been indicated (lower than anticipated).


We also know the shares traded higher than that at 40+ usd on the secondary market. But they'll have to price it low enough to generate interest and high enough to make it worthwhile.


So here's what I think is going to happen.


1. Share Price will open at 37 Dollars (higher than the indicative band indicating early interest to the market....and, of course (!), giving early institutional investors an immediate profit).


2. On the day it floats, it will open to huge demand (very bullish) and over the first 2/3 days, it will then bounce and climb to circa 67 dollars (60 usd+ anyway). A 30% gain on the first day would bring it to 48 usd alone.


No one is saying anything like that (in fact, good traders tell me that I'm mad...we'll see) but I know Facebook will go past the magically 100 billion usd valuation mark easily (1st day) and well past it. They'll want that to get headlines.


3. It will then stabilise and then you'll see profit taking on a grand scale. So selling (bearish) at the 60+ usd mark. A Bear attack?


4. That'll bring it down quickly and as the market sees that trend they'll short it, to I think what will be the real long term price of 45 usd.


The opportunity is over the first 1 or 2 days.


Buying at 37 usd and selling at circa 50 usd seems to me anyway, a play.


BUT YOU HAVE TO WATCH IT ALL THE TIME because the market can start selling at any stage and you're following the market not yourself. You're doing what they do.


I do warn you, this is like forecasting the weather. Nobody knows.
And no more is that the case than in equities on Nasdaq.
Insider knowledge? Nah, doesn't exist.....


It could open at 30 dollars and fall to 22 Dollars.
But I think that's unlikely.


Mind you stranger things have happened and you're on your own.


But never spend money you can't afford to lose.
Having a go at this IPO might add to your interest perhaps in the space and that's no bad thing.


One thing I can say - I've never seen a show like it.

YouTube. The Third Wave and especially, an unmissable 1m+ viral video from The Harvard Baseball Team 2012 just posted.

Firstly, wait... it gets going. Secondly, turn up the sound. And thirdly make it full screen (if you can)..........Then sit back.

This is The 2012 Harvard Baseball Team. On a Bus. Doing Call me Maybe. It was posted 2 days ago, it has over 1.1m views. Magic. Get me on The Harvard Baseball Team! (Thanks to Connor Hulse for filming).

Online video delivering engaging content and reaching huge audiences really quickly.

So if you read this blog regularly, you'll know how big a fan I am of the likes of YouTube, Streamabout Live Streaming, Netflix and how I wonder at the future of traditional broadcasting. Not in a nasty way, because I grew up with it intimately through advertising. But because it's a magnificent opportunity for brands and programme makers.


I like to write my own stuff because it's a view, an opinion, a blog.
And when I mention video or live streaming, people say well, he would wouldn't he (in the famous words of Mandy Rice Davies). Then they yawn.


But sometimes someone else makes the point better and maybe an objective eye is good. Like, don't just take my word for it....

So I came across a piece in The New York Times (pretty reliable source eh?) which actually makes the point better. So I'm going to quote from it (in italics) because I think it's making a really strong issue about the new TV.

It starts, "Tribeca Enterprises, the parent of the Tribeca Film Festival, is teaming up with Maker Studios to create a channel on YouTube.com, named the Picture Show, that is to go live later this year. The channel on YouTube, which is part of Google, will be a home for online series and short films, rather than the feature-length movies that are released by Tribeca Film in theaters and on the video-on-demand channels on cable systems".

So here's a channel that's professional and going to show short films and online series. An online production company, an online TV station. But they're not alone.

"The Picture Show was among several channels that were announced by executives of YouTube and Google at a presentation in New York on Wednesday; others include Team USA, a channel for the United States Olympic Committee, and Wigs, a channel aimed at women. The intent is for YouTube to offer more than 100 online original shows on some of the initial channels are being sponsored by advertisers like AT&T, General Motors, Toyota and Unilever."

Supported by advertisers like Unilever? 

Wow, brands developing their own content like the sponsored programmes of days gone by. It's a big market though - Nielsen reports US TV Adspend at 72 billion usd. Yep, billion. 

One Agency in New York alone, does more business than the whole of the Republic of Ireland.

"We’re about to see another large explosion in the use of video,” said Eric E. Schmidt, executive chairman of Google.“This is probably a third wave,” he added, following the first, broadcast TV to cable, and the second, cable to the Internet."

And in case you still don't get it,

"Some new YouTube channels are already drawing more than a million viewers a week".

Huge audiences, huge brands getting involved with huge programme makers broadcasting to a global audience. Video and Live Streaming is where it's at.

I already noted Amazon's venture into this space through Amazon Studios, before but it gets a mention here too because already (already) it's expanding.

"And Amazon.com announced on Wednesday that its Amazon Studios unit wanted to expand content development efforts for Amazon Instant Video, a digital video streaming service, to include children's and comedy series in addition to its previously announced plans for movies."

It's hard to think of a greater opportunity ever existing (nevermind in a depressed market) for programme makers and broadcasters. They just need to start to think digital.

Brands are taking note and spending money with online channels.

Interested?

Irishman Jerry Comyn leaves US Advertising. And leaves the world in absolutely no doubt why!

Bit of a trend going on here which employers should note.

It follows from Goldman Sachs Greg Smith doing exactly the same.

When someone leaves, they're inclined to tell the world and it appears on Social Media.
But did you expect it from an Irishman abroad?

I don't know him - I don't think I do anyway - but meet Irish senior Outdoor Advertising man Jerry Comyn who's left US major outdoor player 'Titan' (he's from Navan so he worked in Ireland too with Nova and gives Ireland a good old mention) and decided to tell all in an email letter to his contacts after 18 years in the business. (Within hours of publishing it, I heard from the man himself and publish his comments at the end).


He says it's not a reflection on any one company but just his general advertising experience.
Obviously.


It's all over the web so I've no reason to doubt it's true.


And Twitter? Nearly all the responses (and there's masses of them) are thumbs up. 
Plenty of "me too!", "Go Jerry Go!" and even one spuriously claiming that "his life in advertising sales brought him a life of debauchery".


Now him, I do know. 
And I'm desperately trying to make contact.


Jerry is on LinkedIn (to be fair, his resume reads real well).
In fact he's on everything.


You'll find him on Facebook - without any difficulty!
I'd say at this stage if you just Googled 'Jerry', you'd get only 2 results - him and Tom Cruise.


The letter is reproduced courtesy of Business Insider. So let that be a warning. It'll get out.

And the other warning - don't write something on the spur of the moment you might regret. Leave it and think on it overnight, then send it. Most don't on reflection (it's an old business rule).


Ouch.

Anyway here goes:

“Hello all,

Having spent the past 18 years of my life in advertising sales, TV, Radio and Outdoor, I’ve always wondered why I was in a business I detested. For years, I couldn’t figure it out, and then I realized what was motivating me, MONEY! There are few careers where one (we called ourselves a business of C students) could earn so much money for doing very little.

The hardest I ever worked were the first 5 years of my career, from 1994 to 1999. This is mostly because I spent my days making my boss look good. I earned him/them a lot of money by making sure the media buyers were kept happy. Let me tell you, back in the mid 90′s, NYC buyers were animals. If you weren’t at the top of your game, they would eat you without salt. As a result, I believe, I learned ‘the business’ from the best.

Over the years I learned that I was part of a ‘club’ I had no desire to be a member of. By the mid 2000′s I found myself lashing out at the very corporate system I had signed up for. Had I sold my soul? No, there was no way I could have done that. Alas, I realised I had indeed sold my soul for the almighty dollar.

Recently, I decided, once and for all, to leave the industry I have dedicated the last 18 years of my life. The reasons are numerous but following are a few:

* I was trained to lie to clients and cheat as much as possible.
* I was encouraged to dismiss FCC regulations on clients business.
* 99% of Advertising Sales Reps spend their days figuring ways to rip off clients
* 99% of Advertising Sales Managers got their positions by lying and stealing their way to the top.
* Most competing TV and Radio Stations COLLUDE on rates.
* Most vendors are ripping off clients by up to 80%
* Reps WILL rip off their bosses (through expenses) if you treat them like crap.
* Most reps are managed through fear, the worst motivator, in my opinion.
* There are few leaders left in a business that once promoted leadership

I know most of you will think these are the bitter words of a disillusioned ex-rep. Maybe you’re correct, but I like to to think of my words as coming from someone who is finally calling BULLSHIT on the ad sales world, both in the USA and Ireland.

I wish you all good fortune and good luck.

Jerry”

Collusion on rates Jerry? You're kidding.
Can't be true. Nah. Could it?
Letters in a stamped addressed envelope please.

(Since publishing last night, I heard from Jerry this morning - "Hi Stuart...thanks for your commentary on my letter. I never expected it would go viral but I guess it touched a nerve with many people. 

I should also like to clarify that I gave very serious consideration before sending the email, which just happened to go viral. With regard to 'collusion' on rates, that is a federal offence in the USA as controlled by the FCC")


Funny enough he sounds like a completely rational bloke to me.

New TV Research. And yet again, it's not good.

I have blogged many times before about the demise of TV - here about VOD and Amazon Studios http://streamabout.blogspot.com/2012/05/video-on-demand-live-streaming-and-end.html 


- here about Netflix and how broadcasters are letting the Web sail by them  http://streamabout.blogspot.com/2012/04/netflix-greatest-change-in-broadcasting.html 


- here about The BAI, their ridiculous Advertising restrictions and how they'll impact on domestic TV whilst allowing online broadcasting to grow further
http://streamabout.blogspot.com/2012/04/advertising-regulators-youre-fired.html 


- here on the stunning growth of youtube http://streamabout.blogspot.com/2012/03/youtube-mashable-death-of-tv-and-henry.html 


- and here about how youtube will deliver new content better than TV  http://streamabout.blogspot.com/2012/03/youtube-is-new-tv-keep-calm-people.html. 


Spot a trend? TV is in serious, serious, difficulty and as traditional broadcasters stand idly by. Nero and Rome.


So lo and behold, only this week, out comes a new piece of research about TV and viewing habits which only adds to the woes, if, of course, they're bothered to read it (which they won't).


What it says, in a nutshell, is that traditional TV has become "moving wallpaper".


It's an extensive piece of research and UK based (so very similar to the Irish market but a good indicator european-wide) of 2,500 responders in March. 


It's recent. And shocking. 


Media buying Agencies should sit up and take note (who read this blog) because this type of data is not gathered by Nielsen as such. But anecdotally, it rings true as well as being backed by science.


Fundamentally, only 60 per cent watch TV live ("live" meaning when it's scheduled) and this makes sense - because we all know about the growth in iplayer viewership. So what seems to be happening is that more and more viewers are watching later.


Therefore, 40% do not see your commercial as it happens, and possibly not at all (if it's viewed through SKY+ or the iplayer). So you're losing audience here, hand over fist.


However, more worrying than that for broadcasters even, is that Social networking is almost as popular now as live TV. We kinda' knew that.... but what we didn't realise is that almost 4 in 10 viewers are surfing the internet on another device as they watch telly.....extraordinary and it is ringing bells. 


Two laptops open using Social Media whilst the TV is on, is regular in our house anyway- so television is becoming wallpaper. Equally we've always known the high dwell times on social media such as Facebook (2.5 hours) in the evening so it rings absolutely true. People are using Social Media while the telly is on in the background AND only 60% have it on live.


So live TV, for a lot of people, is something now quite ambient. Moving wallpaper.


That is a shocker.


This is turning TV data on its head and it so damages the traditional broadcaster's market expect that we'll find protective interests bringing forward spurious data, to protect their own interests, in reply to this.


(I noticed in press last week for example, "A new study of Irish websites has found that Irish Internet users are over three times as likely to trust Irish content sites compared to social networks and almost twice as likely over portal sites. This in turn has led to greater levels of engagement and responsiveness." Amazing.....Irish websites 3 times more likely to be trusted than social networks? So I truly scratched my head...made no sense to me. So I wondered where it came from? "The study was commissioned by the Association of Online Publishers (AOP) Ireland, the industry body representing Irish digital publishing companies". Oh okay. I get it.)


Apart from problems for TV, the Research also threw up some other interesting stuff;


- 3D has also lost its flavour as the need to wear glasses reduces its impact.


- 42 per cent say tablets are still too expensive and 27 per cent are waiting for the price to fall. But 33 per cent prefer a laptop


- Only six per cent of the survey subscribe to a music streaming service. (Which doesn't surprise me and hints further at the illegal downloads and sharing of music). Or points to a greater preference for "on demand" services  and indeed the research shows overall there's a reluctance to pay for subscription services.


- Other consumption habits are worth a note. More people read newspapers online than play online games. Just over a third - 36 per cent - gamble, but most do so only infrequently. 


- More people now listen to internet radio (18 per cent) than rent DVDs (13 per cent). And 14 per cent admit to watching porn (with a possible another 86% lying....)


- Apple scores highly as an innovative brand (31 per cent), but the most "boring" brands are Facebook and Twitter.


And last from The Telegraph "The online poll of 1,959 consumers also found that the potential damage to publishing is likely to increase, as a quarter of those who admitted to e-book piracy said they would continue." I would agree.


This Research is another landmark in the TV online revolution and this time it's extensive, it's scientific, it's black & white. 


But most broadcasters will choose to ignore it. Rubbish it. Demean it.


As they slowly lose their business.
Shame.