Sign up  |  Log in

If Facebook Tanks

If Facebook tanks, let’s say market cap after a few weeks IPO reflects <50 billion instead of say 100 billion. 

What happens to LNKD, GPRN, ZYNGA?  Do they sink? How Much?

I’m wondering if Facebook will have a dramatic effect of the valuation of these stocks.

Conversely let’s say the valuation sticks at 100 billion +

Do these other stocks jump up?  Way up? How Much?

Disclosure:

I’ve just bought put options expiring this spring on some of those companies and others like them.    Considering buying calls as well.  But not yet. 


No Homo

See how TagniFi is helping investment professionals streamline their valuation and analysis process in Excel. Sign up for a free trial today.

I say yes, if Facebook drops, so do the others. The Groupon IPO was illustrative of how these social companies appear to be joined at the hip with respect to their share price movements. Without doing any calculations, in November there appeared to be very strong correlation.

However, if Facebook pops, I don’t see the others following nearly as much. Groupon is already overvalued in my opinion.

We can kiss the AF IPO goodbye.

Sweep the Leg wrote:
We can kiss the AF IPO goodbye.

Hahahaha

No Homo

In any case, this is just a trade idea.

The way the market has gotten all excited the last month even though none of the problems have gone away makes me more resolute that the next time some bad news comes along the market will tank and over react again.

I love that Facebook is supposed to have a bigger market cap then Amazon. Can’t wait to see the market way in.

No Homo

So looking at the Facebook S-1 I think this actually bodes poorly for LNKD. LNKD isn’t making any money. Pretty much no profit. It’s revenue is only 243 million yet it is still valued at 7 billion dollars.

The company is NO Facebook. It doesn’t have the cache or the people to make it better like Apple, Google or Facebook do. I doubt it can compete in the long run.

It’s got 489 million in current assets, which does not strike me as a whole lot in order to compete with the others. Loosely speaking, Facebook is kicking its ass.

Oh and then there is their business model.

Finally, their CEO is definitely so fat that he’ll die in the next 10 years for sure.

Whether or not this stock pops or drops because of Facebook I’m just gonna keep adding to my short position on it in puts. I hope it goes nice and high real soon. I’ll be buying puts into that strength all the way.

No Homo

I think LNKD will stay, it has a definite niche that Facebook can’t penetrate - the professional area. People want to keep their professional persona separate from their private lives, and in that regard, Facebook, LinkedIn and Twitter can occupy pretty distinct roles. I think most of us maintain a LinkedIn profile and will continue to do so.

Palantir wrote:
I think LNKD will stay, it has a definite niche that Facebook can’t penetrate - the professional area. People want to keep their professional persona separate from their private lives, and in that regard, Facebook, LinkedIn and Twitter can occupy pretty distinct roles. I think most of us maintain a LinkedIn profile and will continue to do so.

Absolutely agree. I have both a LinkedIn and Facebook and the 2 are in no way connected. My facebook is rather private (I mean all my info is out there for Facebook to sell, but not for people to just see). LinkedIn is for keeping up with old professors and employers and for scouting out new jobs.