Facebook Stock

What do you think of Facebook’s stock going up a lot today? In addition, what do you think it will be worth in 5-10 years?

Reported for forum change.

Nobody in this world knows. Ask a medium.

Moved to IMHO from General Questions.

It went up because their earnings are up. Who knows where it will be in five years, it does seem to be getting near the time for it to go the way of myspace though.

I’m interested in how institutional investors will value the stock subsequent to Zuckerberg’s latest restructuring shenanigan, in which he will severely dilute almost all voting shares held by the public.

It shouldn’t make much of a difference. It’s not dilutive in the sense of equity ownership. If you own $100 of FB before the restructuring, you’ll own $100 after the restructuring. The duel share class will allow Zuckerberg to give away his equity stake without losing decision making power over the company.

Right, but it’s dilutive of voting power, in a company where one dude already has majority control. What will institutional shareholders think when it becomes clear that it will never be possible to fire Zuck?

I think they already know. Similar to the situation at Google, investors are apparently pretty satisfied with his leadership. If he starts making ridiculous decisions, the stock price would reflect it. As far as the value of A class vs. C class, I’d expect the As to trade at a premium of somewhere around 2% to 6%.

At least with the current setup, there was a real possibility that MZ would slowly sell off his controlling interest and outsiders might gain significant influence on the Board. Now that will never happen. Large investors would much rather have the option of replacing management that they don’t like instead of just watching things burn and running for the exit.


While the research of people who claim to be able to predict the future of stocks isn’t rare, its almost never well done.

PS- of equal “scientific merit” my picks for the Derby are:

Brody’s Cause
Oscar Nominated
“He Pissed It All Away…!” - David Johansen

And those that can do it successfully won’t tell you how it’s done.

I pretty much avoid any company that doesn’t actually produce anything. No idea why FB stock would rise, but I’m not enticed in the least. As a side note, Chobani is going public, and I like their products.

Isn’t Renaissance Technologies famous for using arbitrage to get its returns? (That exploits instantaneous differences in prices.) They’re also famously secret as you say, but I’ll bet the one thing they’ve never done in their history is predict stock value ten years in advance.

Yes, but I’d say more “relative value” trading than pure arbitrage. Though, they do hold hundreds of millions of dollars of individual stocks, which aren’t positions that can be entered and exited quickly.