Facebook Shoots It’s Foot Off. Probably will sell you the picture. $FB #instagram

Image via CrunchBase

So Facebook (Nasdaq:FB) will now be selling your pictures without notice or compensation. Apparently you cannot opt out. I hope Facebook has set aside some money for lawsuits.

Facebook is proving itself to be the biggest financial honey trap since the Borgia Cardinals and Popes ran the Vatican. Here is how the rebellion will come about. Lawsuits. The litigation and tort community is just salivating at the teeth. Lawsuit after lawsuit will pile up. Vexing Facebook which has yet to prove itself profitable.

The lawsuits will damage the brand as users become enraged and abandon. Corporations who may be using imagery will suddenly face the prospect of losing control. Not happy. I`m personally waiting for the misuse of Mark Zuckerberg photo`s. Someone will come up with something devious. you just know they will.

In the meantime if you posted some family photo`s. Mark and the boys can make a few bucks from it. Globally you just know there will be jurisdictions that will not allow it.

Win, lose or draw this will be a tar baby for Facebook.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or his evil twin brother who writes Wall Street Murder Thrillers at twitter@georgegutowski

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Mobile App Storm Surge #sandy Drives Facebook $FB #twitter

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NYC, NYSE and Nasdaq all prepare for hurricane Sandy. Wall St to stay home and trade electronically. Watch for a surge in users of Facebook (NASDAQ:FB) and twitter as more investors are forced to use mobile.

So far apps have been sold on efficiency. Will Mark Zuckerberg figure out the plan B dynamic.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti

Zuckerberg Held Prisoner by Stock Market Yikes $FB

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

Facebook (Nasdaq:FB) and Mark Zuckerberg have been taken prisoner by investor perceptions. Facing a humiliating $50 billion loss of shareholder wealth Facebook will start buying back some of its own shares which might reduce the float some and help engineer the illusion of EPS growth.

More importantly Mark Zuckerberg promises not to sell any personal holdings for the next year. Because Mark knows if he sells it will be the largest unfriend action in the history of capitalism. In the mean time he continues to have a mortgage on his mansion. Truly wealthy people do not have mortgages. They have walls erected around them.

By the way markets are conversations. Stock markets are an original form of social media.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti

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Facebook Executive Mutiny. Smokescreen Before Investor Lawsuits This is Classsic Behaviourial Investing$FB

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Facebook (Nasdaq:FB) is losing its most valuable asset. People. Key executives Katie Mitic and Ethan Beard announced they’re leaving Facebook to pursue other opportunities. This bring to three the number of high-profile management departures since the IPO. While it is only normal to have some turnover what we have here is a full-scale mutiny. Yes the stock price is disappointing and perhaps the financial rewards are not what were hoped for but when they leave by the busload it’s a problem.

Mark Zuckerberg probably cruises through the office to see who is left. Sort of taking roll call after a fire fight. You need to see who survived. While executive dissatisfaction plays into the very recent loser narrative investors need to start asking if these guys knew something before the IPO. Their profiles have not changed. Venture capitalists and head hunters all knew who they were. But today they are all bolting for the doors.

Shareholder litigation will be coming. Facebook will become the poster child for manic-depressive investing. Investors will claim mis-representation and will be wanting to depose and cross exam the mutineers. They were on the inside and know how it’s all been trending.

In the meantime the market is realizing that extreme hype is not value.

George Gutowski writes from a caveat emptor perspective.

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Facebook Claims Early Days of Monetization. Show Me The Money Problems Exist. $FB

Facebook logo (Photo credit: Wikipedia)

Facebook (Nasdaq:FB) finally came out with their first quarterly conference call. Much of the commentary was very high level and almost every management comment concludes ”its early days and cannot forecast as yet.” This waffling does not justify a 60 forward PE.

No data on customer metrics. How much money does user have? Marketing is getting client to pay for something. Data provided is geographic but in a global marketplace it’s all about reaching clients that match the marketers product lines. The global bar charts are superficial.

The executives still emphasize the evangelization of Facebook. The comment is made Facebook advertisers need to learn how to use Facebook. The second comment is that they want to take large companies and make them social. Then I remember General Motors giving up on Facebook not that long ago. There seems to be a dynamic tension which is not being resolved. Automobile marketing is such a huge share of marketing Facebook may need to learn something about the end-user dynamics and not just keep saying social social social.

Mark Zuckerberg waffled on an excellent question when he was asked how Facebook would leverage video and e-commerce. The suggestion being if a user is liking something there is an obvious e-commerce opportunity. Zuckerberg talked around the point and discussed who does what platform. Sounded like his thoughts and Facebook thoughts are dare we say it very early stage.

Many of the analysts asked questions about the mechanics of socialization. No one could really drive through to the all important monetization. If a business cannot show you how they will make money then you have a poor business.

George Gutowski writes from a caveat emptor perspective.

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Facebook Can You Stand It. It’s About Mobile or Go Home $FB

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

Facebook (Nasdaq:FB) will release much-anticipated numbers later today. Two problems. You have to justify a forward PE ratio of 60. Then you need to prove you are a monetized player in mobile not desk top. The two points will intertwine. Chances are the mobile strategy would already be on the street. PE’s of 60 on the forward are never sustainable except in sugar-plum dreams.

High noon for Zuckerberg and the hoodie.

George Gutowski writes from a caveat emptor perspective.

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Facebook Pre-IPO Hype

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Facebook and 26-year-old boy wonder Mark Zuckerberg gained PR top dog status by announcing a $100 million gift to the Newark School system. Some cynically point to timing and a new movie called “The Social Network” coming to a theatre near you. I think we should be cynical about the donation but for other reasons.

The Wall Street Journal has confirmed that the gift will be in the form of stock. Newark needs to pay its bills in cash. The stock can be sold on private exchanges. Facebook buzz keeps mentioning a huge IPO and $20 Billion valuations. Lots of people want to get their hand on the stock. Limit supply and force the valuation up. So as Newark sells the stock greedy suckers will swarm around and drive the price up. By the way it’s not nice to screw a school so everyone will want to buy.

There is some talk that the gift will be spread out over five years in twenty million dollar tranches. So as the price goes up Mark Zuckerberg sells less shares but still hits his $20 million commitment. so if you want more stock can someone try to force the price down. just how do these private exchanges work. Is the SEC watching this one or do they also need an educational grant.

Newark is still the big winner and they really needed the money. But Zuckerberg has put the Facebook stock into play in a most ingenious manner. Watch for others to copy this pre-IPO technique.

Taking it one step further how does the Newark school system know it can sell and recoup $100 million. What has been salted into the system and how? Then again if the stock will be worth so much more in the future does Newark have the fiduciary obligation to keep the stock well into the future? buckle up this will be an interesting ride. Wonder if Oprah will buy some for herself.

Disclosure: No position in stocks mentioned in this post.

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