"80 Percent of Facebook Ad Clicks Came From Bots, Firm Says"

Alleged sketchy ad activity.


“Limited Run, which develops e-commerce platforms for musicians and labels, claims that 80 percent of the clicks for which Facebook was charging came from bots, not real Facebook users.”

“They’re scumbags and we just don’t have the patience for scumbags,”

Facebook shares down about 6% today to $21.7. Down 43% from IPO. Might or might not be related.

That’s a tricky deal. No doubt bots are out there and account for a huge amount of clicks, but FB may not be behind it. Google faced similar accusations a few years back and the bots were found to be unrelated…though still misrepresenting the click-throughs.

If FB is running bots to inflate paid clicks, that would be massive fraud.

Call me when it’s at $10, then we’ll talk.

Why, are you a lawyer specializing in shareholder class action suits?

Call me when it’s at $20, then we’ll talk.

the intraday high on the day of the IPO was something like $45.

Well, seems increasingly likely that you’ll see those price targets. Stock is under $21 today…

give us your number first and we’ll see

No, but I would make an exception for fb.


Edit: It touched $20.00 briefly, actually.

$19.90 now (-47%) since IPO

Has there been a more disastrous 2month post IPO period of a large-cap corporation in history?

I reaaaaaaaaally struggled to think of one.

Blackstone group in '07? $31 a share at IPO, popped to $35, went to $15 or so within two months. They only sold like 10% of the firm but a lot of people who didn’t do great diligence (OH IT’S LIKE I’M BUYING PRIVATE EQUITY INVESTMENTS, BUT IN BITE-SIZED, CONVENIENT STOCK FORM!) got their faces ripped off.

Yeah, it’s like, some of the most successful investors in the world are selling this after the market has been going up for years. Do you really want to buy any of this? There was / is a good pamphlet floating around somewhere online called “Blackstoned” that outlined some of the carnage – lulz

Well put. As Buffett said in Omaha (about Facebook, actually), “These people could choose any time in the world when they want to sell, and they’re intelligent, and they understand their business better than you, and they work for the firm full time, but they’re selling now. And it comes with a 400 page prospectus. You know, you probably don’t even have to know the business but - if it comes with a 400 page prospectus, I’d say, ‘don’t buy it’.”

Found that “Blackstoned” piece you were talking about.

Even that wasn’t as large (in terms of market cap) as this one. We are talking about roughly $45B in market cap drop. More than what Blackstone was worth at its peak.

I happen to know a lot about display advertising and there are a lot of players, not just Facebook. When a diplay ad is run on Facebook, FB doesn’t get 100% of the revenue. There are companies that actually “serve” the ad such as Mediaplex and others that will take a piece.

It’s a crooked industry. As an example AOL is big in display advertising and I believe that is their only profitable line. They will take out my coworkers and take them shopping. Expensive sunglasses, designer jeans, boxes at sporting events, it is ridiculous. There are no rules or ethics like in finance. They will drop $500 per person easily without batting an eye.


I enjoyed your post, very informative, but you lost me at that part

True. I just meant performance-wise.

So yeah, this is the largest offering done at a hyper-optimistic valuation that I can ever think of. There are more outlandish valuations (money losers like Webvan, Pets.com, Groupon) that I can think of, but…none as big as Facebook.

Good thing we’ve got Blake here. I, for one, would be lost without these insights.

There is a real big difference between actually doing it and writing about at a “micro-cap fund” my friend. You have probably heard the term “big data.” I have said this before but it is one of the largest improvements and movements in tech now. I have clients in the internet space and have access to their data. You have no idea what goes into an ad campaign and how quantitative they have become. It is actual science now. Sitting back at your desk talking to people and reading financial statements does not make you an expert in the space at all.