Facebook’s IPO Ponzi Scheme Collapsing

Company shares have plunged almost half from their original value. As predicted, correction will place company’s value at the correct level.

AP | AUGUST 16, 2012

Shares of Facebook are plunging to all-time lows after the expiration of a lock-up period that has provided early investors and insiders with an opportunity to exit.

The stock fell 7 percent, or $1.49, to $19.71 in Thursday morning trading.

If the stock hits $19, it will have lost half its value since Facebook went public in May.

It’s been a rough run for Facebook. After one of the most anticipated initial public stock offerings in history, Facebook Inc. suffered what may be the most-botched IPO as trading glitches marred its first day. It’s been almost all downhill since then.

In all, 271 million shares become eligible for sale Thursday, on top of the 421 million already trading. It’s conceivable no one would sell those extra shares, but if too many do, Facebook’s stock could decline.

Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman are among those free to sell stock they own. Microsoft Corp., an early Facebook investor, is another one, though it’s unlikely to sell because of partnerships it has with Facebook.

It’s not yet known whether anyone had sold shares. The stock price decline could reflect investor anticipation of such a move.

Other shareholders, including many Facebook employees, will be able to sell beginning in October. The last lockup period expires next May, a year after the initial public offering.

Facebook Inc. is based in Menlo Park, Calif.

Facebook’s Overvalued Stock Fiasco Uncovered

Although the slide on Facebook’s stock price was officially explained as a ‘glitch’, reality demonstrates that the company’s artificially high-valued position was due to the intervention of its underwriters.

BLOOMBERG | MAY 22, 2012

Criticism of the Facebook Inc. FB -10.99% stock deal grew as the shares dropped below their offering price in their first full day of trading Monday, wiping $11.5 billion off the social network’s market value.

The company, its investment bankers and the Nasdaq Stock Market came under fire for failing to ensure a smooth debut for one of the most anticipated deals in recent memory. Facebook shares, which opened Friday at $38 and managed to add just 23 cents during the day, fell 11% Monday to $34.03.

While investors agreed Facebook shares weren’t worth $38 apiece, they couldn’t find consensus on who deserved the most blame.

Monday’s selloff was attributed partly to investors who were allotted more Facebook shares than they expected and moved to pare their holdings, said people familiar with the matter. Retail investors usually are allocated up to 20% of the total shares allotted in an IPO, but in Facebook’s case, retail allocation was around 25%, the people said.

Facebook had increased the number of shares being offered at the last minute before the IPO. As a result, many retail investors weren’t hungry for more shares once trading began, according to the people.

Facebook’s offering, one of the biggest U.S. IPOs, was supposed to burnish the reputations of Morgan Stanley, MS -1.20% the deal’s lead banker, as an underwriter, and Nasdaq OMX Group Inc. NDAQ +3.59% as the listing exchange of choice for hot technology companies. But some investors said tactical missteps and technical problems left them uneasy about the deal even before trading began Friday morning.

They faulted Morgan Stanley for overloading the market with too many Facebook shares and took aim at Nasdaq for system glitches that prevented some investors from confirming their trades or trade cancellations, which some said cost them tens of thousands of dollars.

“The underwriters completely screwed this up,” said Michael Pachter, an analyst at Wedbush Securities. The offering “should have been half as big as it was, and it would have closed at $45.”

At $34, Facebook would have a price-to-earnings ratio, a measure of how expensive or cheap a stock is, of about 57 times projected earnings for the next 12 months, according to FactSet research. The ratio means a Facebook share is more than four times expensive as a share of Google Inc. GOOG +2.28%

“Facebook’s IPO priced at a level well-above where we foresaw compelling 12-month returns,” BTIG analyst Richard Greenfield said in a research note Monday. With revenue and earnings growth decelerating in 2012, “we find Facebook’s current valuation unappealing.”

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Facebook IPO Financing NSA Data Mining Front


Facebook has become a new icon of elite dominance over the web, and increasingly the tech-driven economy as well. Technocrats are busy building stock market credibility via the IPO for their Facebook spy front, while Bilderberg attendees select politicians, steer social movements and spy on the masses to harvest data. Aaron Dykes has a special report on Mark Zuckerberg and his intel ring of social media kingpins and financiers. Bilderberg 2012 is set to convene on Chantilly, Virginia during May 31-June 3. Stayed tuned at Infowars.com for full spectrum coverage of the secretive meeting.

Google Founder: Internet Freedom Under Greatest Threat Ever

Threats range from governments trying to control citizens to the rise of Facebook and Apple-style ‘walled gardens’.


The principles of openness and universal access that underpinned the creation of the internet three decades ago are under greater threat than ever, according to Google co-founder Sergey Brin.

In an interview with the Guardian, Brin warned there were “very powerful forces that have lined up against the open internet on all sides and around the world”. “I am more worried than I have been in the past,” he said. “It’s scary.”

The threat to the freedom of the internet comes, he claims, from a combination of governments increasingly trying to control access and communication by their citizens, the entertainment industry’s attempts to crack down on piracy, and the rise of “restrictive” walled gardens such as Facebook and Apple, which tightly control what software can be released on their platforms.

The 38-year-old billionaire, whose family fled antisemitism in the Soviet Union, was widely regarded as having been the driving force behind Google’s partial pullout from China in 2010 over concerns about censorship and cyber-attacks. He said five years ago he did not believe China or any country could effectively restrict the internet for long, but now says he has been proven wrong. “I thought there was no way to put the genie back in the bottle, but now it seems in certain areas the genie has been put back in the bottle,” he said.

He said he was most concerned by the efforts of countries such as China, Saudi Arabia and Iran to censor and restrict use of the internet, but warned that the rise of Facebook and Apple, which have their own proprietary platforms and control access to their users, risked stifling innovation and balkanising the web.

“There’s a lot to be lost,” he said. “For example, all the information in apps – that data is not crawlable by web crawlers. You can’t search it.”

Brin’s criticism of Facebook is likely to be controversial, with the social network approaching an estimated $100bn (£64bn) flotation. Google’s upstart rival has seen explosive growth: it has signed up half of Americans with computer access and more than 800 million members worldwide.

Brin said he and co-founder Larry Page would not have been able to create Google if the internet was dominated by Facebook. “You have to play by their rules, which are really restrictive,” he said. “The kind of environment that we developed Google in, the reason that we were able to develop a search engine, is the web was so open. Once you get too many rules, that will stifle innovation.”

He criticised Facebook for not making it easy for users to switch their data to other services. “Facebook has been sucking down Gmail contacts for many years,” he said.

Brin’s comments come on the first day of a week-long Guardian investigation of the intensifying battle for control of the internet being fought across the globe between governments, companies, military strategists, activists and hackers.

From the attempts made by Hollywood to push through legislation allowing pirate websites to be shut down, to the British government’s plans to monitor social media and web use, the ethos of openness championed by the pioneers of the internet and worldwide web is being challenged on a number of fronts.

In China, which now has more internet users than any other country, the government recently introduced new “real identity” rules in a bid to tame the boisterous microblogging scene. In Russia, there are powerful calls to rein in a blogosphere blamed for fomenting a wave of anti-Vladimir Putin protests. It has been reported that Iran is planning to introduce a sealed “national internet” from this summer.

Ricken Patel, co-founder of Avaaz, the 14 million-strong online activist network which has been providing communication equipment and training to Syrian activists, echoed Brin’s warning: “We’ve seen a massive attack on the freedom of the web. Governments are realising the power of this medium to organise people and they are trying to clamp down across the world, not just in places like China and North Korea; we’re seeing bills in the United States, in Italy, all across the world.”

Writing in the Guardian on Monday, outspoken Chinese artist and activist Ai Weiwei says the Chinese government’s attempts to control the internet will ultimately be doomed to failure. “In the long run,” he says, “they must understand it’s not possible for them to control the internet unless they shut it off – and they can’t live with the consequences of that.”

Amid mounting concern over the militarisation of the internet and claims – denied by Beijing – that China has mounted numerous cyber-attacks on US military and corporate targets, he said it would be hugely difficult for any government to defend its online “territory”.

“If you compare the internet to the physical world, there really aren’t any walls between countries,” he said. “If Canada wanted to send tanks into the US there is nothing stopping them and it’s the same on the internet. It’s hopeless to try to control the internet.”

He reserved his harshest words for the entertainment industry, which he said was “shooting itself in the foot, or maybe worse than in the foot” by lobbying for legislation to block sites offering pirate material.

He said the Sopa and Pipa bills championed by the film and music industries would have led to the US using the same technology and approach it criticised China and Iran for using. The entertainment industry failed to appreciate people would continue to download pirated content as long as it was easier to acquire and use than legitimately obtained material, he said.

“I haven’t tried it for many years but when you go on a pirate website, you choose what you like; it downloads to the device of your choice and it will just work – and then when you have to jump through all these hoops [to buy legitimate content], the walls created are disincentives for people to buy,” he said.

Brin acknowledged that some people were anxious about the amount of their data that was now in the reach of US authorities because it sits on Google’s servers. He said the company was periodically forced to hand over data and sometimes prevented by legal restrictions from even notifying users that it had done so.

He said: “We push back a lot; we are able to turn down a lot of these requests. We do everything possible to protect the data. If we could wave a magic wand and not be subject to US law, that would be great. If we could be in some magical jurisdiction that everyone in the world trusted, that would be great … We’re doing it as well as can be done.”

Facebook Acusado de Crear ‘Perfiles Sombra’ de los no Usuarios

Traducción Luis R. Miranda
23 de octubre 2011

Ochocientos millones de usuarios no son suficientes. Facebook, la más grande red social del mundo, está ahora creando perfiles de los no usuarios que ni siquiera están registrados. Esta es la acusación hecha por una organización internacional que promueve la privacidad de los usuarios de Internet.

Se afirma en la denuncia presentada en agosto por el Comisionado de Protección de Datos de Irlanda. El dice que los usuarios son invitados a entregar los datos de otras personas – incluyendo nombres, números de teléfono, direcciones de correo electrónico y mucho más – que Facebook está utilizando para crear perfiles ilegales de no usuarios.

Facebook niega categóricamente la acusación, pero expertos dijeron a FoxNews.com que esta acusación podría ser verdadera.

“No puede haber ninguna duda de que Facebook recolecta información sobre los usuarios actuales y las personas que no son usuarios, y recopila información de los contactos de los usuarios de Facebook”, dijo Kelly Kubasta, que comanda la división de redes sociales en la oficina legal Klemchuk de Dallas, Texas.

Ciara O’Sullivan, portavoz de la Oficina del Alto Comisionado de Protección de Datos de Irlanda, le dijo a FoxNews.com que una auditoría realizada en Irlanda a Facebook sobre sus políticas de privacidad es parte de una “investigación judicial” prevista por la oficina que conducirá a cambios inmediatos.

“La Oficina del Alto Comisionado de Protección de Datos iniciará una auditoría completa de Facebook en Irlanda antes de que finalice el mes”, dijo O’Sullivan.

Pero Facebook niega que esté creando “perfiles sombra” de seguimiento de los usuarios o no usuarios.

“Las acusaciones son falsas”, dijo el portavoz de Facebook, Andrew Noyes. “Permitimos a los usuarios enviar correos electrónicos a sus amigos invitándolos a unirse a Facebook. Guardamos la dirección de correo electrónico y el nombre del invitado para hacerle saber cuando llegan a ser usuarios del servicio. Esta es una práctica común entre casi todos los servicios que requieren las invitaciones – incluyendo el intercambio de documentos y organización de eventos “

“La afirmación de que Facebook está haciendo algún tipo de perfil nefasto es simplemente equivocado”, dijo Noyes.

Además, Facebook dice que la información obtenida de los usuarios de no se utiliza para orientar anuncios, y que no vende la información de los usuarios a terceros. La compañía insiste en su política de privacidad en su sitio web.

Pero eso no es lo que están pensando en Irlanda. La denuncia considera que Facebook claramente viola la privacidad – y lista varios escenarios y acciones que pondrían nervioso a cualquier usuario.

“Facebook Irlanda recoge una cantidad excesiva de información de los miembros sin consentimiento o notificación”, dice la demanda, y agregó que en muchos casos, la adición de la información “puede ser embarazosa o intimidante a la persona en cuestión. Esta información puede incluir detalles de información sensible, tales como las opiniones políticas, creencias religiosas o filosóficas, orientación sexual, etc. “

La legislación europea establece fuertes sanciones para las empresas que violan las leyes de “privacidad de información” – en contraste con las leyes relativamente relajadas en los Estados Unidos. Sin embargo, los EE.UU. también tiene problemas con Facebook: procesos legales por violaciones de la privacidad actualmente se ventilan en Mississippi, Louisiana, Kansas y Kentucky. La Comisión Federal de Comercio de EE.UU también está investigando denuncias contra Facebook, mientras el Congreso está pidiendo una investigación.

Kubasta señaló que – para bien o para mal – la mejor defensa de Facebook puede ser un buen ataque. Después de todo, no es el único: muchos otros sitios están llevando a cabo este tipo de prácicas también. (Google, Microsoft, Apple, y así sucesivamente)

“Independientemente de lo que está haciendo Facebook, muchos sitios recogen y difunden información sobre las personas sin ellos haber concordado sobre esta política con estos sitios. Sólo unos pocos ejemplos incluyen Spokeo, iSearch, WhitePages.com”, dijo Kubasta a FoxNews.com.

“En otras palabras,” el caballo ya ha dejado el granero ‘”, dijo.

Noyes dijo a FoxNews.com que las prácticas de Facebook son “consistentes con las expectativas de la gente. Esperamos poder aclarar estas y otras cuestiones en Irlanda. “

Los expertos dicen que estas acciones están a la vanguardia de una nueva tendencia – la creciente demanda de los consumidores de privacidad de sus datos en Internet, y mejorar la respuesta empresarial a estas demandas.

Marilyn Prosch, co-fundadora de la Privacy by Design Research Lab en la Universidad de Arizona, ha realizado una amplia investigación sobre la privacidad en línea, comercio electrónico y otras cuestiones relacionadas.

Ella está trabajando con las redes sociales y otros líderes de la industria para crear directrices para las empresas en línea y para proteger eficazmente los datos personales en todo el mundo.

“Asegurar la privacidad debe ser la política ideal de cualquiera de las empresas que ofrecen servicios en línea”, dijo Prosch a FoxNews.com.


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