Facebook IPO: The good and the bad

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Facebook went public and the people who got in at the initial price of $38 made a little money, but the stock is hardly exploding in the way that suggests social-networking is the next stock market darling. In fact, right after Facebook started selling, Zynga (which gets the vast majority of its revenue from Facebook) collapsed so quickly that trading was halted.

Still, about 1,000 Facebook employees are a lot richer today, and Mark Zuckerberg will join the likes of Bill Gates and Larry Ellison atop the Forbes 400 leaderboard. The state of California gets a nice bump, too -- according to some accounts, the state will eventually pick up close to $1 billion in tax revenue when the Facebook Fuckinzillionaires exercize their options and start selling their stock.

But for all the rest of us? Sure, increased consumer spending will help the local economy (dealers in luxury cars are drooling in their cheap coffee). But if that's not your line of work, you may not be so lucky.

The biggest factor in lifestyle and economic security in San Francisco is the cost of housing -- and that's going the wrong way. The Chron estimates that the total increase in the housing market will approach $1 billion, which doesn't seem all the much spread around the Bay Area, but it will be concentrated in a few popular places, and the east side of San Francisco, particularly Noe Valley, the Mission and surrounding nabes, will be part of ground zero.

Meaning if you are looking to rent or buy a place in this city, you just lost a bunch of money. That is, you will now have to pay more for your housing, which will be a net benefit to landlords and sellers.

And it's not necessarily such good news for small business and other startups:

    The winners are of course the 1,000 or so Facebook employees who will cash-in, however the losers will be the rest of Silicon Valley for the following reasons. Housing prices will rise across the whole Bay Area. For local businesses and start-ups, recruiting due to difficulty moving to this area because of those rising prices

Go at it, trolls. Tell me I'm utterly wrong. Because it seems like those non-radical types at the Chron and Trulia seem to agree with me that there's a downside here, too.

 

Comments

So what are you arguing for? First, not all of those employees will live in sf. Second, they are not competing for low income or low priced housing. Third, maybe if sf could build some more high end housing rents wouldn't rise as precipitously as you predict. Fourth, you seem to believe that the only increase in consumer discretionary spending will go to cars and rent and completely ignore both the follow-on spending (car salesman buys more coffee, clothes, etc) and the increase in spending that will occur for other items that will occur when people have more wealth.

To put it another way, would you prefer an sf with high unemployment? Detroit has plenty of inexpensive housing. Is that the type of local economy you'd prefer?

Posted by Guest on May. 19, 2012 @ 7:32 am

how their economy. Misery loves company and the more poor, homeless, unemployed people there are here, the happier he is. It's the exact opposite of what almost every city on the planet wants - successful businesses and prosperous people.

Posted by Guest on May. 19, 2012 @ 8:31 am

I hope this is a passing fad - it's really irritating.

A poor person never gave anyone a job.

Still haven't figured out how you grow the economy, create jobs and pay off public debt by demonizing success. It's not a plan. It's infantile.

Posted by Guest on May. 19, 2012 @ 9:04 am

people by first stereotyping them "all rich people are evil" and then attacking them "tax them until they squeal".

America was built on risk-taking, innovation and success but now, apparently, it's become a sin.

Posted by Guest on May. 19, 2012 @ 9:13 am

Your knowledge of history is pretty weak. Read up on the First Sicilian Slave War.

Posted by GlenParkDaddy on May. 19, 2012 @ 9:49 am

We originally considered blacks a different species, yo justify enslaving them.

Hitler demonized the Jews.

Every extremist movement needs a villain class and, for socialism, it's those who succeed.

Posted by Guest on May. 19, 2012 @ 10:27 am

Republicans demonize the poor, hence justifying their endless "War on this, war on that." What is your point exactly?

We shouldn't raise taxes a few percentage points on the wealthiest and most successful for fear of unleashing the Cultural Revolution?

I think you are confused.

Posted by GlenParkDaddy on May. 20, 2012 @ 9:26 am

Generally they do not feel there is a mandate for that.

Every ideology demonizes somebody.

Posted by Guest on May. 20, 2012 @ 4:50 pm

Well see in November. My Congresswoman is Nancy Pelosi and she agrees with me already. What is your excuse?

The voters will vote their taxes up quite a bit after the Bush Tax Cuts for the Rich expire.

Posted by GlenParkDaddy on May. 21, 2012 @ 3:54 pm
Posted by Guest on May. 21, 2012 @ 4:25 pm

Please give at least one example of your claim that Obama is "demonizing the rich." I won't hold my breath.

Posted by GlenParkDaddy on May. 20, 2012 @ 9:30 am

When they are demonizing the wealth earned by Mitt Romney every day as if he did something illegal.

But fair is fair - I recall all the demonization of John Kerry's wealth...

Posted by Guest on May. 20, 2012 @ 10:46 am

Oh Noez! Stop the presses!

Posted by Greg on May. 20, 2012 @ 2:07 pm

Kerry's wealth wasn't demonized, nor was McCain's (7 houses) but since Obama doesn't have an economic record to run on suddenly a candidate's wealth is a huge issue. (How many times do we have to hear Romney has a car elevator in his garage??) Matter of fact, can't recall any presidential candidate's wealth being a issue. In the old days, successful people were admired, something for Americans to aspire to...until Obama came along.

Are you trying to pretend the whole Obama/Occupy/Govt union "1%" whining isn't about demonizing the very wealthy...? Wow.

Still waiting to hear how Obama plans to grow the economy other than borrowing more money.

Posted by Guest on May. 20, 2012 @ 2:27 pm

Kerry and McCain's wealth were both big topics of debate. John Stewart made fun of both of them for being wealthy and out of touch, for example.

I can provide you with many examples, but facts never matter to people like you. You just lie to suit your agenda.

Posted by GlenParkDaddy on May. 21, 2012 @ 9:14 am

Jon Stewart made a couple of jokes...I was speaking to actual candidates attacking an oppponent's wealth - did not happen.

Did Carrot Top makes joke too? Do tell.

Posted by Guest on May. 21, 2012 @ 4:40 pm

Somehow you missed all the attacks on Kerry for being a ketchup fortune heir?

Where you asleep all of 2004?

Posted by GlenParkDaddy on May. 21, 2012 @ 11:26 pm

All the corporate hype about FB. I'm sick of hearing about data mining FB, and I'm glad their IPO fell flat.

Posted by Guest on May. 20, 2012 @ 3:43 pm

It priced at about the open, meaning that it was priced right. Those trying to make a bundle at the IPO lost out, but the insiders all got their cream.

Dream on.

Posted by Guest on May. 20, 2012 @ 4:48 pm

Google this: facebook ipo falls flat

About 26,500,000 results (0.25 seconds)

Posted by Guest on May. 20, 2012 @ 8:01 pm

FB was priced correctly. If you think that's a failure then don't apply for a job at an investment bank.

Posted by Guest on May. 21, 2012 @ 5:55 am

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/19/MNJ11OJK3U.DTL

I would recommend that Anonymous and "Guest" go over to the comments section on this article and tackle the nay-sayers there, as the critical comments FAR exceed anything posted on here.

Posted by Michael W. on May. 20, 2012 @ 8:53 pm

BBC News - Business Section:
21 May 2012

Facebook closes below float price
Shares in Facebook closed well below the price at which they were floated amid doubts that the newly-listed company can live up to expectations.

(Google it. Spam filter won't allow the link.)

Posted by Guest on May. 21, 2012 @ 1:46 pm

that only affects the dumb unwashed masses who piled into the IPO. The insiders cashed out and will use their millions to make SF more boring - at least if you buy into Tim's weird generalizations and stereotypes.

Posted by Guest on May. 21, 2012 @ 2:02 pm

Experts say now's not the time to buy Facebook
http://tinyurl.com/8yekub2

"The lackluster opening means individual investors can buy Facebook stock at the same price shares were offered to privileged investors. Investors who piled in the first day lost as much as 15% in just a few hours."

Posted by Guest on May. 21, 2012 @ 5:24 pm
Posted by Guest on May. 21, 2012 @ 5:38 pm

Posted by Guest on May. 21, 2012 @ 5:38 pm

Well, if Guest disputes it, then we should all listen to Guest because Guest knows best and knows more than all financial experts on the topic. All of these financial experts should consult pro-Facebook Guest on the matter to be brainwashed pro-Facebook.

Guest is a self-appointed expert on all matters and knows nothing about any of them. So let's all listen to the self-appointed expert in stupidity and on trolling.

Fool.

Posted by Guest on May. 21, 2012 @ 5:59 pm

Referring to Facebook's stock:

"I would not touch this," says Josef Schuster of IPOX Schuster. "Facebook's (stock) trend is to the downside."

•Weak first day.
•Lofty valuation.
•Broad market struggles.
•Individual investor dogpile. Mania-level interest in Facebook by individual investors shows just how hyped, and overvalued, the stock is, Gaskins says.

And that "Guest" nut/troll on here wrote, "FB was priced correctly."

Don't apply for a job at an investment bank.

Posted by Guest on May. 21, 2012 @ 5:49 pm

One issue we seem to be having here is that many of the commenters appear to believe that housing is a commodity, just like CDs that you might sell (or, for that matter, a commercial office building). I believe that housing -- like food and water -- ought to be a human right, and should be tightly regulated. That's not socialist -- I'm not saying all private businesses should be owned by the state or that the market doesn't work for a lot of things. But housing is like health care -- the further we get it away from the market the better we do.

Posted by tim on May. 21, 2012 @ 7:30 pm

You believe in a mixed economy tim, just like me. Just like all sane people. We might differ on where to draw the line, but some things are better left to The State and some to free enterprise.

Posted by GlenParkDaddy on May. 21, 2012 @ 11:47 pm

support he has for capitalism and free enterprise appears to be limited to small, local companies, preferably producing something groovy.

I can't recall him ever expressing support for any company larger than, say, Peet's Coffee.

As for real estate, it's subject to market forces everywhere. The state can intervene at the margin, by building projects and issuing Section 8 vouchers. But RE is far too large a market for any government, national or local, to control or subsidize.

Shelter might be a basic human right, as you claim, but nobody has a right to cheap accomodation in one of the most desirable, wealthy and expensive places on the planet. That's just naive.

Posted by Guest on May. 22, 2012 @ 6:42 am

Tim,

I am in agreement with you that some things should be regulated or left to the government (don't get me started on military privatization and the zeal to go to war). However, regulating housing to the degree you believe should be done is fraught with problems. You, yourself, have indicated that the demand for SF real estate is infinite (it's not, but we can leave that for now). So how is that that we determine who gets to live here? Do we have a lottery, or do we let some government agency select the lucky few who get housing? Do we, as you have proposed, force landlords with vacant units to rent those out and, if so, should we not also force homeowners and renters to make available spare bedrooms?

In my opinion, housing may be basic right but not necessarily housing in SF. There is plenty of housing available in this country, it's just that most of it is far from job centers. You can thank lax zoning in suburban and exurban areas with contrasting NIMBYism in the central cities. The specific SF housing shortage cannot be solved without massive investment in large, high rise apartment blocks. Of course, the style and type of housing that would put a dent in rental rates would be vehemently opposed by almost everyone in SF including the Bay Guardian.

Posted by Guest666 on May. 22, 2012 @ 8:13 am

out a vacant unit. Santa Monica actually tried that maybe 15 years ago, which led to the Ellis Act and countless subsequent evictions.

And that's the problem with passing laws about housing that are too strict. There are unintended consequences and a backlash.

Another example is vacancy control, which says that a rent cannot go up even when a tenant leaves. Berkeley and Santa Monica has vacancy control (SF never did) and, again, a State law was passed to ban it.

So push too far and it comes back and bites you. All a city can do is create affordable housing funds which, coincidentally, is exactly what Mayor Lee announced yesterday. So while Tim is spouting ideology, Lee is actually getting it done.

But you're right, such efforts only scratch the surface. And while housing may arguably be a right, a home in San Francisco is not. Oakland is half the price and ten minutes awau.

Posted by Guest on May. 22, 2012 @ 9:57 am

Today: Facebook stock slumps another 9 percent

Posted by Guest on May. 22, 2012 @ 1:54 pm

it's your IRA and mutual fund that pays for that. So why gloat? You've been had. Again.

Posted by Guest on May. 22, 2012 @ 3:01 pm

I have neither an IRA or mutual funds and have nothing to do with FB nor would I. Do you often assume things about people without knowing anything about them? How intelligent is that? Or is that part of your troll routine? You've been had again. You've been exposed. Again.

Posted by Guest on May. 22, 2012 @ 3:17 pm

Way to go but, seriously, consider saving.

Posted by Guest on May. 22, 2012 @ 4:17 pm

I found this headline interesting:

Facebook's Whiny Investors Should Start Their Own Group

Posted by Guest on May. 22, 2012 @ 3:11 pm

It looks like the data-mining company (FB) may be in trouble:

BBC News/Business:
22 May 2012 Last updated at 18:33 ET

Facebook shares fall again as flotation concerns emerge

Facebook's flotation has run into more controversy amid reports of concerns about the way advisers disclosed information to investors.

As Facebook shares fell another 9% on Tuesday, regulators said they may review the disclosure process to see if some investors got favourable access.

-------------

Oh, so will we see an investigation into FB? Corruption? Another corporate entity involved in corruption?

I would put the link here, but it's such a waste of time when the spam filter rejects links more than 1/2 the time, so why bother.

Posted by Guest on May. 22, 2012 @ 7:28 pm

The floatation of Facebook is facing a federal probe amid allegations that underwriter Morgan Stanley kept some investors in the dark over forecasts that the stock would tank.

A subpoena has been served on the investment bank in Massachusetts and the federal Securities and Exchange Comission is reviewing the allegations.

http://www.dailymail.co.uk/news/article-2148414/Wall-Street-watchdog-set...

Posted by Guest on May. 22, 2012 @ 8:21 pm

Facebook is a good company but did anyone really think it was worth more than the $100 billion the underwriters priced it at?
Tim, if you wanted to make a few quick million you might want to think about taking the Bay Guardian public. I'm sure you could find some investment bankers to underwrite it. Look at it this way: the New York Times trades at a market value of $900 million and they aren't even profitable and can't figure out how to make money out of online advertising.

Posted by traderkitten on May. 23, 2012 @ 9:25 am

I grew up in Silicon Valley, yes are prices and rents have been going up, nothing wrong with making money. The problem lies in the Bay Area and their strong NIMBYism, you can build anything without spending time on lawsuits and meetings, you go for the high end earner because the money you invested in the site. Most people would rather have upper income resident because look around we have some of the most high income areas.

You have to complete for rentals, homeownership, space on the highway, services, the people that are non tech, and not rich are losing out, the middle class are losing out, the blue collar worker is losing out, the non whites are losing out, the poor are losing out.

Today I ready in the newpapers from the south bay that 75 percent of the bay area land is saved, 300,000 acres is under threat, either that land will go into open space or have upper income homes on it. So tell me why prices are so high again, why we can't get a good transit system here, why small business owner have a hard time finding space for business.

Posted by garrett on May. 23, 2012 @ 10:03 am