August 17, 2012
We've Been Looking Past The Overhyped Facebook Effect, Have You?
We took a bit of heat for suggesting our readers Look Past The Overhyped Facebook Effect in February. As we wrote at the time:
Forget the overhyped Facebook effect (a.k.a. "buy now or be priced out forever 2.0") and simply turn your attention to the S&P 500 which closed the day at 1,363.05, just below its April 2011 high of 1,363.61 (its highest close since June 2008) and the Dow’s 12,986.81, its highest close since May 2008.
Having since gone public at $38 a share, Facebook shares closed at $19.05 today.
plugged-in reader noted, the current Market Cap for the company is roughly $41 billion according to Google (see UPDATE below), 18 percent less than the $50 billion at which the company was valued by Goldman Sachs in January 2011, since which more than half of the current employees have joined the company and been awarded shares.
That being said, the S&P 500 closed at 1,418.16 today, one point below its four year high, and the Dow closed at 13,275.20. And the number of employed people in San Francisco is currently up by 9,700 over the past five months, up 24,900 over the past year.
UPDATE: As a plugged-in reader quickly points out and assuming Henry Blodget is correct, Google’s share count for Facebook is wrong and should be 2,741,423,185, undercounting the effective number of shares by 22 percent and the market cap by as much as well.
As such, Facebook should have a current market cap of $52 billion, not $41 billion, 4 percent over its $50 billion valuation at the beginning of 2011.
We’ll also take this opportunity to note that of those 2,741,423,185 shares, only 692 million are currently tradable while the potential float will increase by another 1.6 billion shares over the next three months.
∙ Look Past The Overhyped Facebook Effect [SocketSite]
∙ What's The Point? [SocketSite]
∙ Facebook On The Home Front [SocketSite]
∙ Employment In San Francisco Up By 4,600 In July, Up 24,900 YOY [SocketSite]
First Published: August 17, 2012 4:00 PM
Comments from "Plugged In" Readers
I suspect what "the Facebook Effect" is now is that realtors look stupid for saying, "buy now before the prices go up after the Facebook IPO." Seemed like there was some rabble over Zynga over the prior thread too, which is funny. That's not to say there aren't Facebook shareholders who made good money and will buy houses with it, of course, but the mood appears to be a bit dampened.
Anyway, this post is a great answer to those who used to complain that the editor only told us when the S&P was down. :)
What was the correlation again? That SF housing prices trail the stock market by a year or two?
Posted by: sfrenegade at August 17, 2012 4:19 PM
It will be interesting to see the impact on Palo Alto and Peninsula:
"There was a huge run-up before the Facebook IPO and it cooled off after the Facebook fizzle," Ken DeLeon, a Palo Alto real estate broker, said about local home prices."
^That was in July when FB was still over $30.
Posted by: CH at August 17, 2012 4:38 PM
"It will be interesting to see the impact on Palo Alto and Peninsula"
As to that specifically, I was seeing a huge number (relatively speaking) of listings for $2M+ houses located on certain parts of the Peninsula from about Jan/Feb onward, but it stopped at some point. I wasn't sure if that was seasonal, if it was because of more economic confidence, or if it was Facebook, however, and it would take some analysis to figure it out, but it seemed like a huge number compared to last year during the same time.
Posted by: sfrenegade at August 17, 2012 4:44 PM
Ouch. I still believe this is good for us SF in the long run. Facebook and Zynga are now having to prove themselves to a skeptical market. To do that they'll have to create substance. After which, the wealth will be real and here to stay this time. I'll take a rough and bumpy road the top over a bubble any day.
Personally, I think the stock drop is the best thing that could have happened for Facebook. They're faced with retaining talent post IPO, so those who are inclined to see their investment pay off just might have to stick it out.
Posted by: kg at August 17, 2012 5:14 PM
The market cap is actually $52B. Google Finance, Yahoo Finance and others have the wrong number.
Henry Blodget confirmed with facebook that 2.74B shares are outstanding:
Also, I believe employees have been receiving RSUs so the valuation of the company in January of 2011 isn't that directly relevant. i.e. no one is underwater, afaik.
[Editor's Note: Great catch and since updated above.]
[Editor's Note: And you're correct about RSU's and not being underwater. The relevancy, however, relates to how the valuation would have influenced the size of subsequent employee grants as well as expectations.]
Posted by: Mark at August 17, 2012 5:22 PM
its not just the annoying guy in the movie shoes getting DILUTED
Posted by: spencer at August 18, 2012 9:18 AM
OK, so the non-existent "facebook effect" has now ceased, um, to exist.
The interesting question is the impact of the fb and znga employees' tax burdens from the RSUs, which will force more selling to cover the taxes and, thus, even lower share prices.
Posted by: anon at August 18, 2012 11:55 AM
You guys are tripping. Just saying internet stuff to like minded internet folks, for internet yuk yuk yuks. "now ceased?" no chance . The market has been dominated by tech money since April. It doesn't matter. Read past the mythic "buy before the FB effect" touts that bearish websites continue to mine, four months after the news cycle. Twenty bucks a share, 15, 30, whatever. A significant number of the rank and file, 1700 pre-2010 employees, got a 5 to 1 split. (And there were 4 for 1 splits in '06 and '07.) Average engineer allocations of RSUs prior to 2010 were in the 10 to 15k range ... Do the math. This is all on cnn and msnbc and similar. You posters can pretend that tech money -- and not just Facebook, Google just split 2 to 1 in late June -- hasnt been buying up every decent property across the better southern swatch of sf since April till the cows come home, decry realtors to the point that your own protests are louder than the initial news cycle, whatever. Or not look around at the actual areas on a given Saturday and notice the people, amenities, etc. , across Noe, Glen park, bernal, the mission, potrero hill, doma, and south beach. Heck, go to the street food fair right now and talk to people. Or continue to ignore what's happening. Doesn't change the reality. (Not that the Spencers and Tipsters of the 'Net truck in reality.)
Posted by: Anon1 at August 18, 2012 12:30 PM
Following the math above:
1700 pre 2010 employees get a 5 to 1 split on a 15K share allocation at $20 per share equals: 5*15000*20, or $1.5 million per average employee.
And lets even assume that a significant proportion of them are running around looking to blow the whole wad on local real estate.
Thats still only a $1.5 million dollar down payment. (Scoff)
Have you seen what's going on in Hillsborough lately?
Posted by: BillyBalls at August 18, 2012 4:40 PM
Don't follow the math above, it's bad. Average for pre-2011 employee was under 10k RSUs. Even with 5-1 split, 50k units = 1m @ 20/share taxed at 45% = $550k fully vested. Recent hires = $100k salary, $50k bonus, $120k in RSUs.
Posted by: RSUer at August 18, 2012 6:55 PM
What is going on in Hillsborough lately?
Posted by: Conifer at August 18, 2012 9:15 PM
FB hasn't even gotten out of its lockup for the rank and file. It is a little early to be declaring it dead just yet. Let's see what happens after November 14th.
If the overall stock market stays strong while Facebook continues to fade, we will the perfect setup to see what is driving the recent strength in sales more.
Posted by: NoeValleyJim at August 19, 2012 9:19 AM
Oh puleeze, when FB stock was at $40 per share, there were going to be 650 people with $1M before taxes and after everything vested. That got inflated by the media to "near 1000" and later "1000".
Now the stock is half that and we're up to 1700 with $1.5M? Only in the minds of the boosters and real estate agents.
I'm sure there will be 100 with more than a million after everything vests in a few years, and that's way more than usual, but that's about it. Another 500 will have around $175K after taxes in a few years but they took a pay cut to get it, so they'll net about $75K.
For 5 years, that's $15k per year. For every one at fb who got their precious $15K, there are 15 others at other companies who got nothing, but took the same pay cut.
And meanwhile, funding is drying up. Onlive, laid off 100 and wiped everyone's options to zero. Zero! And that's just one company in one day. A big online white board just sent out messages telling everyone to take everything off their cloud, they were shutting down.
Funding is drying up everywhere, and fb stock is being Zynga'd. Zynga is a catastrophe. Not the ending anyone expected, even me. Go ahead and try to tell us all how with the stock at half, there are now three times the millionaires and they are all worth 50% more. You guys will never stop.
Posted by: tipster at August 19, 2012 9:21 AM
Your words are not coming from anywhere credible Tipster, as usual. "funding is drying up" can be disproven by anyone with who spends give seconds on sf business time who reads more tha one story.. "650 with 1m pre-taxes" iis you being you, after initially getting rsus wrong for weeks and getting schooled repeatedly. Now it's the old "round down and speak as if it's old hat" technique. Whatever. Why you have such a hate affair with so much always springs to mind. But who cares.
Regardless, the point wasn't 1700 all got 20 to 25. The point was that the average engineer got that, during that time. And sales managers and other managers who drive revenue did, too. There are flow charts! And there were two other 4 to 1 splits prior to the 5 to 1 every one if the 2010 1700 got.
Bottom line, this "now that FB is dead" meme is the biggest crock I have ever seen on here . And that's truly saying something.
Posted by: Anon1 at August 19, 2012 9:46 AM
I know a former senior FB employee (non-engineer, but a skilled negotiator, had been there for about 5 years, *very* successful there)....he left right after the IPO and he indicated he got stock only worth in the high six figures. That is, I think the number of "multi-" millionaires post IPO is not nearly as big as people think. FB has been fairly stingy with stock giveaways. Of course, there are undoubtedly several dozen people with giant packages.
Posted by: Frank C. at August 19, 2012 12:01 PM
And I know a 2009 hire, a pretty talented salesperson, and she's looking at mid-high six figures at the 20 dollar mark. Only Friday were some of her RSUs released. So that's why I posted ... "This now that FB is toast" garbage. It's all over the place, up and down, what have you. It isn't the end all be all, but frankly, even that initial news cycle that went national didn't really contain the type of language that posters on this site characterized. Let alone the intentional obfuscation about RSUs from permahaters that NVJ and others corrected about a dozen times.
Posted by: Anon1 at August 19, 2012 1:48 PM
Well *I* know a guy, and he *told me* he made...
Oh wait, that has no credibility, twice removed. Thanks for that helpful information.
I'm sure we can all find (or make up) anecdotes, but the fact remains that the share price is half what it was three months ago, and something has to give as a result.
If there was only one employer in a town, and that employer cut everyone's salary in half, the price of homes in that town would fall.
You can come up with all sorts of anecdotes ("well the VP's salary, even after the 1/2 pay cut, is still over $100K!") and it wouldn't change squat. The price of homes in that town would fall.
Sorry, but that's how it works.
Posted by: tipster at August 19, 2012 5:25 PM
There's no debate. If FB employees were doing that well, Mark Z wouldn't be trying to console them and pretend he "feel their pain".
One thing for certain, the booster/realtor community can't go on talking about FB/ZNGA boom.
Maybe they could move on to EV and Tezla?
Posted by: HC at August 19, 2012 5:40 PM
In plain point of everyday easily viewable Socketsite fact Tipster, everyone can see you often going on about people you know, you arch hypocrite. Frank C shared an anecdote. I shared an anecdote. It read as if his friend thought a similar amount was insignificant to mine, for whom it will be a big deal. (and neither engineers) So whatever.. Again, stop being so selectively global. Plenty of FBers are now making a decision whether to wait, or to cash out. This is a fact. Others are not in the money at all. This "HC" poster comes round and gets expansive plus dismissive plus stretch to another company. whatever! There's no need to reduce every single thing to binary. It varies. But "over " it is not. Fact .
Posted by: Anon1 at August 19, 2012 6:03 PM
"For many staffers, the precipitous drop means their Facebook stock is not going to yield the returns they hoped, at least not right away. They have had to defer or downsize their dreams of buying a home or a new car."
"People made life plans and calculations," said a Silicon Valley chief executive who spoke on the condition of anonymity to preserve his relationships inside Facebook. "This is very, very painful."
Cancel the mansion: Facebook staffers put off dreams for now
Posted by: anon at August 19, 2012 9:52 PM
Facebook, blah blah. Apple has made (and continues to make) far more people far wealther.
Posted by: anon at August 20, 2012 8:59 AM
So we've seen the logic of the realtors laid bare. Housing prices will SOAR because of high-fliying new stocks like fb, and znga. You just wait! But when those stocks absolutely tank, housing prices will still SOAR because, because . . . um, "Google just split 2 to 1 in late June." Ha!
* by the way, goog's stock did not split in June. That plan goes into effect in October. And, of course, a stock split makes no change in the overall worth of any shareholder as they just own double the shares of stock that is now worth half as much. As I heard here once, "do the math."
Posted by: anon at August 20, 2012 9:29 AM
"will soar" -- never said it. "have increased since April" -- said it. Google announced the split in June. Spare everyone the pedantry about what a stock split may mean.
It's always about putting words into people's mouths about predicting some mythic future with you guys. Because you're never going to actually do anything. Ha. You were so busy crying about how '09 and '10 weren't lows that you missed the best buyer's market in eight years. And "logic " -- the Internet only guys' favorite word (to abuse the heck out of.)
Posted by: Anon1 at August 20, 2012 9:50 AM
sorry to provide such a misleading comment and "putting words into people's mouths" by quoting you verbatim! Gee, I should know better than to engage in such unfair tactics, especially with a straight shooter like you!
Posted by: anon at August 20, 2012 10:01 AM
You were [so] busy crying about how '09 and '10 weren't [lows] that you missed the best buyer's market in eight years.
Very true. There will be good buyer's markets in the future, like always. But this one was very decent.
Saying SF is expensive is like saying rain is wet. People with their eyes open can make the difference between a downpour and a drizzle. Others have emotions clouding their judgement.
Posted by: lol at August 20, 2012 10:14 AM
Do you belong to a troll network, "anon"? All your little moves are so generic as to appear coached.
Posted by: Anon 1 at August 20, 2012 10:28 AM
Oh, Ken, that's the oldest trick in the book. The troll shouting "Troll!" at those who point out obvious flaws in fact and logic in a sad attempt at misdirection.
Posted by: anon at August 20, 2012 10:46 AM
"Personally, I think the stock drop is the best thing that could have happened for Facebook. They're faced with retaining talent post IPO, so those who are inclined to see their investment pay off just might have to stick it out."
Does selling personal information to advertisers require talent? The site is starting to bore everyone I know (except maybe my great aunt that just created a profile). They better pull something out of their hat before they turn into the next MySpace.
Posted by: moz at August 20, 2012 10:51 AM
Facts: you inserted "soar" with all caps, no less, repeatedly, now youre trolling with somebody's first name, talking again with the Internet-only guy's favorite words to abuse the hell out of, logic and fact. You're a troll and a derivative one at that. Get some new material troll
Posted by: Anon1 at August 20, 2012 11:33 AM
Personal anecdotes notwithstanding, flunnon1 is right on this one: properties are moving very quickly and prices are increasing. It's not as insane as '06, but good luck finding a decent place for under ~$1.2 million. And anything under a million, unless it's critically flawed, is going into contract in about a week.
I'm not saying it'll be like this forever - we all know rents can fall quickly in SF, and I think high rents plus low mortgage rates are driving a lot of the buying right now. But this is the market today. A lot of the fencesitters that sat the bubble out have bought or are buying because renting isn't very attractive in the current environment.
Posted by: Legacy Dude at August 20, 2012 1:24 PM
"Only Friday were some of her RSUs released. "
Is She Ms Goldman or Ms Sachs??
Cuz employee Lockup aint till Nov
"Early Facebook investors such as DST Global Ltd., Goldman Sachs Group Inc. (GS), Elevation Partners and Accel Partners could start selling part of their holdings last week, Facebook has said in filings. "
"The stock being sold Nov. 14 would include shares from current and former employees, as well individuals who bought stock from them"
"With the Facebook employee lock-up releases coming in October and November, this isn't just an issue of morale and "paper net worth." Current and former Facebook employees have been counting on the stock to buy things (houses, for example). So it's a matter of near-term financial planning.
"Employees at Facebook are allowed to begin cashing in this November, six months after its IPO, when up to 1.2 billion Facebook shares could hit the open market. "
And Guys with Milions in stock Aint Cage Fighing for 100 Gs
"Those who can prove their worth, thrive. For several years, management has called all-hands assemblies every quarter where a handful of Zynga's high performers are each awarded $100,000 worth of vested stock."
Posted by: ReadingForRealtors at August 20, 2012 1:35 PM
I don't know. I haven't spoken to them in some time. I had heard /assumed the employee lockup was this past Thursday actually( not Friday as I also hit wrong .) Anyway,, it's not the end all be all, but it isn't a dead thing either. Plenty of rank and file people will get nice windfalls and that point stands.
Posted by: Anon1 at August 20, 2012 2:01 PM
Apple has made (and continues to make) far more people far wealther.
Apple has made lots of investors wealthy. Apple has never really been that generous with their stock, so has not made many employees rich. Though it has no doubt made many wealthy enough to afford a house in San Francisco.
Glass door has the average yearly salary for a Sr. Software Engineer at $126k, which is pretty typical for The Valley and the average stock bonus worth $46k, which is higher than average, but hardly mind boggling.
No doubt some people that have been there for a while are doing very well though, does anyone have any anecdotes to share? My Apple employee pals are very tight lipped.
Posted by: NoeValleyJim at August 20, 2012 2:18 PM
Thiel isn't anticipating to grow his wealth in FB:
He's a director and was a very early investor in FB. If they're not holding their shares, why would anyone else invest in FB stock? November will be very interesting.
Posted by: marko1332 at August 20, 2012 3:44 PM
@moz: "Does selling personal information to advertisers require talent?"
Clearly you have never done advertising on FB (or Google for that matter) - they don't sell personal information, they allow you to target particular profiles.
Advertisers don't know the individual identities of the people they target. Everything is kept within the walled garden.
If you're worried about information being sold, you should worry more about your bank or supermarket than Google or FB.
Posted by: Toady at August 21, 2012 10:49 AM
whatever FB's demerits, the company will continue b/c it is an extremely useful aggregator of information - it's basically one giant database on Americans & foreigners. With face recognition software being deployed, you will soon be able to take a picture of someone on the street, locate their FB profile and get a description of who that is (& what they ate for breakfast) - all live;
Why do you think that other contries' are fighting so hard to establish their own "social networks" and locking out FB?
This is the same reason why Google will never go away so long as people are willing to put their most intimate searches in the public domain. This kind of surveillance tool is priceless & saves lots of time for many otherwise exhausted public employees.
Zynga, on the other hand, is relevant only inasmuch as it drives people to FB.
Posted by: wrath at August 21, 2012 11:29 AM
of course, this is not unique to these companies. Why search library databases when you can look at what people are reading by going over their Amazon profile? For that matter why do you think tha the itunes store, of otherwise wholesome Apple, has Soviet, Satanic & German WWII music - what bells ring & where when you make those downloads. And what about the App Store - did you download that anti-Obama app, has your computer been running ever so slowly since then?
Credit cards are, of course, a granddaddy of them all;
@ Toady: your name is Toady;
Posted by: wrath at August 21, 2012 11:33 AM
you're so smart, but you should show how much smarter you really are by telling all of your loyal readers that the performance of FB over the past few months is just a simple leading indicator of how the S&P 500 and Dow will perform post Sept 30 2012
at a minimum, S&P 500 and Dow will be cut in half just just like FB and some of the other "Internet" garbage
Posted by: johnny at August 21, 2012 2:09 PM
I'll start keeping track of these wild predictions. They're so much fun to repost in retrospect.
Posted by: lol at August 21, 2012 3:00 PM
review all of my predictions - they have all been right and some have yet to ripen, eg, the S&P 500 and Dow I have always predicted will completely fall apart post Nov election, but could sooner post Sept 30 when govt fiscal year end closes out and the 'debt' limit will need to be lifted which, if it is, is bad, and if it is not, is equally bad for asset prices.
gear it up ... lots of value in the pipeline
Posted by: johnny at August 21, 2012 3:26 PM
the S&P 500 and Dow I have always predicted will completely fall apart post Nov election
Being consistent in nonsense doen't mean being right.
Debt limits come and go. This issue has been a reason for political posturing in the 80s, the 90s, the 00s, and today. Nothing new there.
But hey, if that makes you live another day hoping to soon snatch assets at rock bottom price, to everyone his own. This is a recovery with tons of cash on the sidelines.
Posted by: lol at August 21, 2012 3:44 PM
[Removed by Editor]
johnny, you said the cliff house on here a while back wouldn't get over $6.5M, 1/2 off it's list price. It got list, so they haven't all been right.
Posted by: sparky-b at August 21, 2012 4:40 PM
I'm not sure I was wrong.
Can you post a copy of the purchase contract?
just because a property is advertised as 'selling at list price' does not mean the buyer literally contributed Cash at 'list price'
Posted by: johnny at August 22, 2012 9:02 AM
whatever conspiracy theorist. I can't prove you wrong, I actually don't have purchase contract for any houses (that I didn't buy myself), so I can't prove I shouldn't deduct every sale price ever by $6.5M
Posted by: sparky-b at August 22, 2012 9:46 AM
yep. real estate, in general, is inherently non transparent. still in the dark ages which is surprising given other asset classes such as common stocks and bonds that are highly transparent, regulated and more fully embedded in our 'Internet based' world.
Posted by: johnny at August 22, 2012 10:26 AM
yeah, 'debt limits come and go' until they don't
just ask europe
Posted by: johnny at August 22, 2012 10:34 AM
You cannot compare the US with Europe.
1 - The US can print their own money freely which scares the heck out of market speculators. EU? Well, as they say "it's complicated".
2 - There is no "EU budget" per se, and therefore no discussion of how much deficit the EU overall will allow itself to dig.
3 - Europe ran towards the Euro with its hands behind its back. The EU is not unified, fiscally, politically or culturally. Rich US states have been subsidizing less well off states for decades and this is expected as we are one country. But Greece overspent and Germany or France will not easily transfer its wealth to help out. They want Greek pain to show for it because Germans will not vote for a party that throws money away to help foreigners.
2 very very different situations.
Posted by: lol at August 22, 2012 10:49 AM
Many alternative names on this topic. Who is the editor? Why do some people try to appear as many? Why do some people so vocal on other threads have no voice here. Facebook just announced sponsored search ads. This could potentially be a big revenue generator. The pig is slaughtered. Everyone loves bacon. Let's eat.
Posted by: Here's..... at August 22, 2012 11:19 AM
"With the stock plunging 70 percent following Zynga’s December initial public offering, cash and investments represent 73 percent of the company’s market value, "
Guys Looking to Buying Zynga for the IPO cash
Posted by: ReadingForRealtors at August 22, 2012 1:05 PM
"Facebook just announced sponsored search ads. This could potentially be a big revenue generator."
Some of us have been aware of this product for longer than just today. We'll see how they do with it. I love bacon as much as the next guy, but I have no idea what you were talking about. Until last week, I hadn't posted here in several months, and it looks like there are a ton of site-regulars posting in this thread, so again, not sure you were talking about there.
Posted by: sfrenegade at August 22, 2012 4:21 PM
Zynga is a good example of why the modern ownership structure in Silicon Valley can be a problem. It appears that Mr. Pincus has control over the company with voting rights above 50%. While he can't oppress minority shareholders and while Zynga's board is still on the hook with respect to fiduciary duties as in any corporation, he still has way too large an influence on the direction of the company. Many of the other recent tech IPOs are similar, and investors often have underweighted this ownership structure as a risk factor.
Posted by: sfrenegade at August 22, 2012 4:29 PM
Since the Feb 23rd post about the "FB effect" that Tipster and the editor claim was "overhyped" by Realtors rather than mainstream media, the SF RE market has been on fire. There appears to be zero interest in the actual driver of the SF market - why bother when you can accuse Realtors of something?
Overall jobs (24900 more in one year when less than 5,000 homes trade hands in the City each year), and the overall stock market (far more than a couple of IPO's), are the drivers. The S&P was in the toilet in Oct '11 and RE sales were at a standstill. The S&P is up 28% since then with some parts of the SF RE market up nearly that much and the overall market up at least 10%.
In the midst of that RE price climb that lots of commenters pointed out during the totally worthless Case Shiller posts earlier in the year, Tipster claimed it wasn't true and Realtors were lying about open houses being packed and over-asking offers and doing what the Editor likes to accuse Realtors of... "overhyping". Now, instead of admitting to egg on his face he comes on and tells a story about a company laying off 100 employees... totally missing the "9700 jobs in the past 5 months".
So great job as usual tipster - accuse Realtors of lying, while lying yourself and ignoring any evidence that contradicts your opinion. Aided by yet another worthless "FB effect" accusation article from the Editor. Well, at least here you gave us a "That being said" paragraph. That would make an educational article - not a driver of site traffic I guess as those get zero comments thanks in large part of Tipster having nothing to say to good news.
Posted by: hangemhi at August 24, 2012 9:26 PM
My prediction is that johnny will wander off to post at some other site in 6 months, when his prediction turns out to not come true. Just like almost all the perma-bears who predicted a 50% drop in SF housing prices. There were at least a dozen grave dancers who came out to cackle with glee during the financial collapse in late 2008, but only tipster is still regularly posting.
Posted by: NoeValleyJim at August 26, 2012 10:33 AM
Here's a place that illustrates how ON FIRE the market truly is.
2517 Lake just sold for 760,000. Wow, for just a 2BR condo right by Seacliff! The SF market must be doing great!
But . . . some recent past sales:
Factor in 33% inflation since 2000 and that's down just under 50% in 12 years. Maybe some future Facebook employee bought it in 2005 but was forced to sell in 2012 to pay the taxes on his massive fail of RSU grants?
Posted by: anon at August 27, 2012 7:59 AM
Do you think maybe that fact that it was a short sale and now has tenants has something to do with the price? Or is it just the market?
Posted by: R at August 27, 2012 8:16 AM
You think that cut off a half million dollars from the value? Dream on.
Short sale doesn't materially affect the selling price. Lack of demand does.
A tenant in a non-rent-controlled place probably knocked about 50,000 off the price.
Can't spin this one. Indicates a massive price decline, especially in real terms.
Posted by: anon at August 27, 2012 10:03 AM
It indicates cherry picking.
Posted by: sparky*b at August 27, 2012 10:28 AM
Wait, so what your saying Anon is that the market might be down since 2005? Why is this the first I'm hearing about this???
Posted by: Rillion at August 27, 2012 1:52 PM
FYI, discrepancies in FB share count are common and have to do with different data providers counting or not counting future dilutive shares -- think, unvested/unexercised options or RSUs. Google gets their data from Bloomberg, who's chosen the approach of not counting such shares. This isn't a matter of some providers being wrong as much as it is a matter of the accounting being more complicated than people assume.
Posted by: fixie landbaron at August 28, 2012 9:11 PM
just saw your post. I'm not a perma bear. I've been bullish on the economy in the past, including most of the 90s. I'm bullish on hard stuff, except real estate.
I doubt I'll wander off this site. I would miss eddy.
the numbers just don't work though. you cannot sustain an economic model where you borrow $4 of every $10 you spend and that is what the USA is doing and has been doing for several years. It will blow up at some point and I think that point will arrive after the Nov election sometime. Could be this Fall or next Spring.
If I'm investing in equities, they have to have incredibly liquid balance sheets and moderate price to sales and income to name a few characteristics.
Our govt stinks but it still pays the majority of our population which is why it has been able to get away w/its fiscal behavior for so long, but its model is unsustainable as described above
Posted by: johnny at August 29, 2012 7:23 AM
I don't think that public sector borrowing is what matters as much as overall indebtedness by the entire economy, public and private combined. This shot up in the Aught's, mostly due to private sector borrowing.
After the credit bubble collapsed, the public sector rushed in to prop up the banking sector and prevent total economic collapse. This is the same exact scenario that has repeated itself over and over again in different countries at different times.
The only times that I know of historically that this script has not been followed have been periods of revolutionary change, where bad debts are wiped out across the board like happened in Czarist Russia or at the end of the Ancien Regime in France or more recently when the Soviet Union collapsed. It is unlikely that something like that is in our future, though if it is sitting on some property with debt on it might not be a bad idea. Hyperinflation is great for debt holders.
Eventually, the public sector has to pare its deficit spending there is no doubt about that. I am 100% sure that this is going to come about through some combination of tax increases and spending cuts, mostly Medicare spending cuts. This was the "Grand Compromise" that Obama offered in 2011, only to be shot down by the GOP.
If you really believe that Washington is so dysfunctional that Congress will choose economic and political instability over a modest increase in tax rates and a modest decrease in Medicare, then you have every right to be bearing on Real Estate. But you should stay away from equities too as well. What scenario has the former doing badly and the latter doing well? I am genuinely curious.
Posted by: NoeValleyJim at August 29, 2012 9:55 AM
in a nutshell, operating companies like walmart and microsoft are more secure than anything associated w/the govt.
large liquidity base, large sustainable cash flow base, economies of scale, consistently rising divis and buybacks - all in, you should see your principal paid back w/in 10 years or less.
Barack Obama is not going to save you.
Mitt Romney is not going to save you.
The U.S. Congress is not going to save you. They are too busy living the high life at taxpayer expense.
Posted by: johnny at August 29, 2012 1:45 PM
FB at a new low. Again. Well below 18.
But you can buy now and pretend you got in long before the IPO at a mid-2010 price, lower than most employees' stock grants, by the way. And you'll certainly be rich soon!
Posted by: anon at September 4, 2012 7:58 AM
^You talk about this so very much, but you still don't utilize correct vocabulary. "most employees stock grants" isn't apt. Their price is zero, guy. You've only been informed ofthat three dozen times. Keep it movin already.
Posted by: Anon1 at September 4, 2012 10:49 AM
"Their price is zero, guy. "
Makes No Sense
How many Shares is $100k at Zero Price
"Those who can prove their worth, thrive. For several years, management has called all-hands assemblies every quarter where a handful of Zynga's high performers are each awarded $100,000 worth of vested stock."
Handfull of Guys gets $100k
Get $100K with Stock at $1 and Stock Goes $10 your a Millinare
Get $100K with Stock at $10 and Stock Goes $1 yous got Half a Car
Posted by: ReadingForRealtors at September 4, 2012 11:18 AM
Sorry, [Anon1]. Forgot that one needs to be very literal with you.
Edit: "lower than the price at which most employees' stock grants were valued when awarded, by the way"
Take out taxes, taxed at full ordinary income rates, and that nice house a senior engineer thought he would be able to buy has turned into a decent car. So we end up with a lot less realtor commission, but more car salesman commission!
Posted by: anon at September 4, 2012 2:01 PM
That's not a question of being 'literal'.
It's a question of being correct or not. And your initial statement was not correct. But that, it seems, rarely concerns you. It's part of the fun around here.
Posted by: R at September 4, 2012 2:17 PM
"And your initial statement was not correct. "
If Stock Grants have Zero Price
How Many Shares are in a $100K Grant at $0 per Shaer?
Posted by: ReadingForRealtors at September 4, 2012 2:22 PM
anon could probably pull an Eastwood: find an empty chair, call it "the market" and put words into its mouth.
I mean, instead of pulling a Ryan at each and every post like now...
Posted by: lol at September 4, 2012 2:25 PM
Does RfR realize that FB and ZNGA are two different companies? He mixes and matches quotes about both of them like he thinks they are one and the same? And apparently Ed thinks that's cool, cause while there's lots of editing going on in this thread, those comments are untouched. Odd, but heck, this is Adam's sandbox.
Posted by: R at September 4, 2012 2:46 PM
Exactly. What are they doing beside intentionally being remedial? Over and over again with the same mistakes. Step in and explain it to them on occasion, Ed. For crying out loud dude. You step in and correct bullish posters about opinion, yet these guys get a pass for not even understanding RSUs? And they go there, like, every chance they get? What a joke . It's as if you want casual readers to misunderstand.
Posted by: Anon1 at September 4, 2012 2:53 PM
"Does RfR realize that FB and ZNGA are two different companies?"
Math works the Same at FB and Zynga
Posted by: ReadingForRealtors at September 4, 2012 3:26 PM
Oh, the realtors are funny today!
"FB and ZNGA are two different companies - so, um, ha!"
Uh, the stocks of both crashed, and both failed to generate the realtor riches y'all were dreaming of. Same story, just told twice.
And the great bulk of FB employees have failed to see any significant RSU money regardless of how precisely one explains why that is so. But you can pretend not to understand simple statements when the truth is so contrary to your spouting.
But carry on with tangents about Clint Eastwood, whining to the ed. about, uh, something (can't tell what), etc. LOL!
Posted by: anon at September 4, 2012 3:51 PM
Hint to anon: if you're looking for a success with a big impact on the BA economy, look at AAPL. This is the quiet giant. Wealth at AAPL is spread among many employees, and this has been going on for years. But you do not seem to accept the real world, why am I wasting my time?
Posted by: lol at September 4, 2012 4:08 PM
yes, lol, agreed. I've made far more on aapl stock than the typical Apple employee! Apple is stingy with stock and option grants.
Posted by: anon at September 4, 2012 4:16 PM
So at 17 and change, it's looking like $1.9B fir the employees beginning 10/29 and FB is withholding shares to pay the tax bill.
Posted by: Anon1 at September 4, 2012 8:11 PM
"Zynga Loses CTO of Infrastructure as Executive Exodus Continues"
"Zynga, like a lot of other Silicon Valley startups going through hiring sprees, enticed new employees with reams of valuable stock options in exchange for grueling hours. As that stock price plunged, some people didn’t have much reason to stay at the company"
Maybe some Tech Insiders shold explain to these Guys how Valuable there Zero Price Stock is
Posted by: ReadingForRealtors at September 13, 2012 9:34 AM
Again with zynga, apropos of zippo. Meanwhile FB is back up 30 percent in the past week.
Posted by: Anon1 at September 13, 2012 11:05 AM
Heck, facebook is ON FIRE!
Down 53% from its first day high. About 50 billion dollars in market cap that disappeared. Now THERE'S a stock worth crowing about.
But, right, Zynga, which is actually in SF, is somehow irrelevant? Sure wasn't when realtors were salivating over all the Zynga dollars that would flow into D9. Not!!
Posted by: anon at September 13, 2012 11:51 AM
You like to see the glass half-empty, we get it. Incidentaly, one single month of quiet AAPL appreciation more than erased these paper wealth losses. Then there's GOOG, etc, most doing fine...
What counts is 1000s over 1000s of tech workers in SF are doing pretty well. Are you one of them? If not, please, please let us know how frustrated you are. Give me 5 minutes, I'll zap another bag of popcorn.
Posted by: lol at September 13, 2012 12:21 PM
So What Tech Compenies were Most Talked About on SS and by Realtors a Year Ago
Give a Straght Up Answer
No Smoke No Personal Attacks No Childhood Stories
Posted by: ReadingForRealtors at September 13, 2012 12:33 PM
I guess a big local stock falling in half is "a glass half empty" or "half full" - but HALF nevertheless.
Posted by: anon at September 13, 2012 12:33 PM
I did hit a nerve.
All hands on deck at Whiners, Inc
That company was worth nothing 8 years ago. Now it's worth 44B. And it's paying 1000s of people very decent salaries. That's the glass 1/2 full for you.
But FB is only a side story in the bigger picture.
Posted by: lol at September 13, 2012 12:46 PM
You Guys are Impling that Follow Up on ZNGA FB is Cherry Picking
Guys Accuse the Editor of Chery Picking His Apples
He Shows that the Apples were Picked Before the Result Was Known
Zynga FB Got Big Hype Waay Before they Tanked
Posted by: ReadingForRealtors at September 13, 2012 1:55 PM
I did answer. I will again point to your reading skills or more precisely lack thereof.
Posted by: lol at September 13, 2012 2:04 PM
"So What Tech Compenies were Most Talked About on SS and by Realtors a Year Ago"
Posted by: ReadingForRealtors at September 13, 2012 2:07 PM
Once again, it doesn't matter if the stick is at 15. FB will create billions. But it's the snide "on fire." once again, Facebook has more employees who live in sf than zynfa has employees. But the snide "actually in San Francisco" shows up. Hey great, you don't wish to know things. Fine. But get some new material akready. Once again.
Posted by: Anon1 at September 13, 2012 2:15 PM
I answered anon. Your questions are trollificious non-sequitur nonsense.
Posted by: lol at September 13, 2012 2:15 PM
have both Johnny and Tipster both disappeared from Socketsite? Certainly time for Johnny to update us on his doom and gloom prediction of the S&P dropping in half by or soon after the election (see above comments on 8/21). I suppose its the same prediction now, just a new date. that way you're never wrong and hope to mimic a broken clock some day.
meanwhile - SF RE and the stock market march on nearly hand in hand. never mind the fabricated "facebook effect" story by non-realtors
Posted by: hangemhi at December 12, 2012 3:05 PM
I haven't see ReadingForRealtors in a while as well. Maybe he's catching up on his own reading.
Too bad because the recent action on AAPL's stock price could have some cooling effect on the tempers of the some of our cash rich techies.
Posted by: lol at December 13, 2012 10:16 AM
Reading for Realtors, anon, Tipster, all gone. On and on and on about FB was a disaster and blah dee blah blah know nothing hateful blah. Of course they don't post here. They are haters with one or two notes of hatred. "housing market is going off a cliff," and "San Francisco is a lousy place with no jobs." They were wrong in the end, what, a 2 year decline out of the past going on nine? Not a good batting average. But hey, we all knew they were garbage all along. Win, bulls.
Posted by: Anon1 at December 13, 2012 3:45 PM
Wow. Facebook back up to nearly IPO price. So much for pigs to slaughter, Tipster, etc.
[Editor’s Note: That’s right, just like with the drop in San Francisco housing values which never really happened (although it did), Facebook never really fell to half its current value (although it did).
Note that while Facebook is now "back up to nearly [its] IPO price," the S&P 500 is up 26 percent over the same period of time.]
Posted by: Anon at July 25, 2013 4:28 PM
wow, interesting to reread the posts from people who are AWOL now. There is still one guy who keeps trying to enlighten us with conspiracy theories and nonsensical libertarian ramblings. Not even close to being entertaining.
Posted by: lol at July 25, 2013 4:54 PM
Yes and it's all just the S and P and nothing to do with Facebook being a dynamic company. Reading the thread above, the wditor might've stepped in to correct about a dozen conflated nonsense spins about RSUs and whatnot. But here we see him going to the "Never really happened"? How funny.
Posted by: Anon at July 25, 2013 5:08 PM
Anon, my comment was about wrath.
The editor brings a valuable point, even though my opinion all along has been that SF RE was not dominated by one force or one big company, but the addition of many that altogether brought the Mother Of All Bull Markets we've witnessed these past 18 months.
The reason behind this, imho: many tech companies sell their wares globally but some of the wealth is owned locally. That's the real macro story and individual stock stories are often a blip (at least today). In other news, the rain is wet.
Posted by: lol at July 25, 2013 5:15 PM