Explaining Southern California's economy

California's fading 'Facebook Effect'

Facebook Sets IPO Price At 38 Dollars A Share

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A poster is seen below a message board that is announcing Facebook's IPO price in Times Square on May 17 in New York City. The stock is now trading well below its $38 open.

I'm getting to this a bit later than planned, but that's okay, because Facebook's share price hasn't done much but go down, down, down for the past few weeks. Observers are even beginning to ask a once un-askable question: Should CEO Mark Zuckerberg be replaced?

Facebook has rallied a bit this morning, recovering from an all-time post-IPO low of $18.75. The company is currently in the throes of the slow-motion end of it's "lockup" period — through next year, early investors and Facebook employees will be able to sell shares in the firm. 

The state of California is facing a gigantic budget deficit and has been counting on revenue from the sale of those shares — which are taxed as capital gains — to ease some of the pain. Prior to the Facebook IPO, the Legislative Analyst's Office (LOA) said that California could anticipate a revenue windfall related to investors and employees cashing out. 

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After Fender canceled its IPO, will Carl's Jr.'s hold up?

Will this be another Fender? Or will private equity make it to the IPO finish line?

There's still an IPO market out there, folks, even after Facebook's train wreck with the public-offering process (and subsequent struggles with the stock market). Apollo Global Management, the private-equity group that owns, through an affiliate, Carl's Jr. and Hardee's parent CKE has just priced an IPO for the company at between $14 and $16 a share, according to LATimes.

Apollo took CKE private in 2010 for about $700 billion and plans to sell 13.3 million shares, which would raise somewhat less than the $230 million than Reuters reported on back in June, a month after CKE filed its IPO plans with the SEC with the intention of raising $100 million. It appears that the so-called "road show" for CKE, when investment bankers including Morgan Stanley and Goldman Sachs drum up investors, has attracted more interest in the Southern California-based company than was originally expected.

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Facebook's earnings call: The Storify treatment

Facebook Sets IPO Price At 38 Dollars A Share

Justin Sullivan/Getty Images

Facebook's first earnings report wasn't disappointing. But a big question about its mobile growth prospects is dogging the company.

Facebook reported earnings for the first time today as a public company and, as expected, it mostly met Wall Street's expectations, earning $0.12 per share. But that didn't matter much, as the stock still got crushed in after-hours trading, diving well below its $38/share IPO offering price. How could this be, on a day when the markets rallied on news that the European Central Bank will — wink, wink — not allow the euro to fail, according ECB President Mario Draghi?

I listened to Facebook's earnings call, which feature CEO mark Zuckerberg in additional to COO Sheryl Sandberg and CFO David Ebersman — he of the botched IPO — in speaking roles. The focus of the call was mobile, mobile, mobile. Facebook has almost a billion PC users and half a billion mobile users. And it's to this latter group that Wall Street is now looking for growth. Unfortunately, Facebook just isn't there yet on developing an ad platform for the mobile environment. And it may not get there for a while. 

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Facebook's big day may not really be so big

Facebook Debuts As Public Company With Initial Public Offering On NASDAQ Exchange

Spencer Platt/Getty Images

Facebook will report earnings for the first time ever tomorrow.

It's not the IPO big day, which turned out to be a total FAIL! day. Rather, it's Facebook's first quarterly earnings report as a public company, due to arrive tomorrow. 

This is from AP by way of Boston.com:

Though there’s a lot riding on its second-quarter earnings report — Wall Street analysts aren’t expecting big surprises. Why? Facebook effectively warned investors before its IPO that Wall Street’s expectations were too high. In a filing issued a week before its IPO, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.

As a result of that disclosure and others, many analysts reduced their estimates for Facebook’s projected revenue and earnings.

On average, analysts are expecting Facebook to post earnings of 12 cents per share on revenue of $1.16 billion, according to a poll by FactSet. In all of 2011, it had net income of $1 billion and revenue of $3.71 billion, according to regulatory filings.

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DeBord Report Live: Felix Salmon edition

A sign announcing Facebook IPO is flashe

EMMANUEL DUNAND/AFP/Getty Images

The Facebook IPO announced on the NASDAQ stock exchange. Did it's inability to live up to the hype doom the IPO revival?

We welcomed Reuters finance blogger — and recent Loeb Award winner — Felix Salmon to the Crawford Family Forum last Thursday to talk IPOs, as part of my "DeBord Report Live" series. Specifically, whether the IPO is D-E-A-D. Felix has lately been making a very strong case against the traditional IPO, in Wired and elsewhere. He's outlined an alternative model, of sorts. So we got to engage in some lively conversation on the topic, and we enjoyed some excellent contributions and questions from the audience.

We also got more mileage out of the three terrible slides I grabbed to contribute to the conversation than I ever thought possible.

An interesting product of the evening's discussion was our kind of shared realization that the business of Silicon Valley (broadly defined, but basically the Bay Area tech scene) isn't necessarily the creation of new companies — it's the creation of venture capitalists. 

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