Daily Investment Tips

I got the following email this morning from a technology newsletter I subscribe;

Well, a very wealthy customer of  Goldman Sachs decided to leak Facebook’s financials yesterday after receiving it over lunch: ‘… during the first nine months of 2010, Facebook generated $1.2 billion in revenue. Net income at the firm was $355 million. The financial statements were not audited and offered little detail about how Facebook generates its revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.’ Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income.

written by Constantine Njeru \\ tags: Facebook, Financial Statements, First Nine Months, Goldman Sachs, Lunch, Net Income, Non Disclosure Agreement, Technology Newsletter

Facebook is now the hottest property in the internet, with over 500 million registered users every one is wondering whether Facebook will knock out Google as the most influential company in the internet. Already statistics indicate facebook is now the most visited site in the internet, ahead of Google.

At the moment Facebook revenues are just under $2 billion compared to Google near $25 billion. Will Facebook ever catch up with  Google or over take Google at the end.

Facebook Vs Google Revenue Comparison when both Companies were Six Years Old

For all of 2009, Facebook’s revenue was $777 million and its income was $200 million. Google in 2003—the similar year in the search giant’s history—reported revenue of $1.5 billion and a profit of $106 million.

Facebook Vs Google Revenue Comparison When both companies were seven years old

Through the first nine months of 2004, Google reported revenue of $2.2 billion and net income of $195 million. Through the first nine months of 2010, Facebook’s revenue was about $1.2 billion and its income was $355 million.

There you have it, although Google had more revenue, it is clear Facebook is a more profitable company.

Source of data, wallstreet journal article

written by Constantine Njeru \\ tags: Ahead, Company Source, Facebook, First Nine Months, Giant, Google, Journal Article, Net Income, Profitable Company, Seven Years, Six Years, Statistics, Wallstreet Journal

Goldman Sachs is reportedly raising $1.5 billion for Facebook. Goldman Sachs has sent out a Facebook offer document to it’s list of wealthy clients.

Other investors targeted are hedge funds and private equity funds. Goldman Sachs partners have also been given the opportunity to buy Facebook stock.

According to Goldman Sachs Facebook offer, investors must promise to invest at least $2 million and not sell shares until 2013.

written by Constantine Njeru \\ tags: Buy Stock, Facebook, Goldman Sachs, Hedge Funds, Investors, Opportunity, Private Equity Funds, Promise, Wealthy Clients

Goldman Sachs has been busy receiving orders from hungry investors wanting to buy  a piece of Facebook. According to Wallstreet Journal article, the demand for Facebook stock is so high and now Goldman Sachs plans to stop taking orders for shares of Faceboook inc.

Scanty Facebook Financial Report & Statement

This high demand is despite the scanty financial disclosure from Facebook inc. The journal reports, Goldman has provided some potential investors with little more than a snapshot of Facebook’s online traffic, advertisements and other basic measurements, with no disclosure of the Palo Alto, Calif., company’s bottom line.

Facebook Financial Report & Statement 2009

The journal reports, in the offering document, Facebook had net income of $200 million in 2009 on revenue of $777 million. Financial report & statement for 2010 weren’t disclosed.

written by Constantine Njeru \\ tags: Advertisements, Amp, Bottom Line, Facebook, Faceboook, Financial Disclosure, Financial Statement, Goldman Sachs, Investors, Journal Article, Measurements, Net Income, Online Traffic, Palo Alto, Snapshot, Stock, Wallstreet Journal, Weren

written by Constantine Njeru \\ tags: Darling, Facebook, Goldman Sachs, Investing, Investment Analyst, Investment Bank, Investment Help, Investment Terms, Ipo, Lead, New York Times, New York Times Dealbook, Prelude

According to an article in deal book NYTimes there are 22 companies in the tech I.P.O. pipeline for 2011.

The five Tech IPOs 2011 to watch out for are internet sensations Facebook, Zynga, Groupon, Linked and Skype.

Non of these companies have confirmed going for a tech IPOs in 2011 but going by the level of public and  investor interest in these five the IPOs are around the corner.

For Facebook, Zynga, Linked and Groupon one factor showing a tech IPO 2011 is the significant demand for these companies stock  in the secondary markets, private exchanges that match buyers and sellers.

Facebook one of Tech IPOs 2011

Facebook has crossed 500 million members mark and reportedly bringing near $2 billion revenues for 2010. In private exchanges Facebook is now valued at $45 Billion.

Zynga one of Tech IPOs 2011

Zynga is heavily tied to Facebook. The company raised more money in 2010 from the likes of Google. Word out there is annual revenues are above $800 million. The demand for Zynga stock in the private market has remained strong.A zynga tech IPO in 2011 is not unthinkable.

Groupon one of tech Ipos 2011

As 2010 came close to an end Google unsuccssefully tried to buy Groupon. Groupon is now negotiating with Fidelity, T. Rowe Price and Morgan Stanley for another round of financing that could be as large as $950 million. With this investors looking forward to an exit strategy groupon could go for a tech Ipo in 2011.

Linked one of Tech IPOS 2011.

Although Linked is below the radar when it comes to news coverage, early investors eventual will want an exit. If Facebook, Zynga or groupon have a spectacular tech IPO in 2011, Linked will be hot on their heels.

SKYPE one of Tech IPOS in 2011.

Skype is the only one that has confirmed a 2011 tech ipo. On August 9, 2010, Skype filed with the SEC to raise up to $100 million in an initial public offering

written by Constantine Njeru \\ tags: 100 Million, Buyers And Sellers, Exit Strategy, Facebook, Fidelity, Google, Initial Public Offering, Investor Interest, Ipo, Ipos, Members Mark, Morgan Stanley, Pipeline, Private Exchanges, Private Market, Radar, Secondary Markets, Sensations, Skype, T Rowe Price

Businessweek has a story about investment funds that have invested in Facebook. This funds are providing retail investors with a means to invest indirectly into facebook.

Facebook Funds

EB Exchange Funds, based in San Francisco, along with New York firms Felix Investments and GreenCrest Capital, have opened Facebook funds.

Since you cant buy facebook stock directly you instead buy into the fund just like you buy a mutual fund.

Read the full story at businessweek facebook.

There is no doubt facebook is the biggest story since Google. Those investors who were lucky to get in early are smiling all the way to facebook IPO date. Funds such as EB exchange have given retail investors another window to get a piece of facebook.

Although Facebook is still a private company investors have been able to buy stock of the company. Stock of Facebook trade on a private-company stock market. The market is known as Secondmarket.

Although there is a secondary market it is extremely hard for outsiders to even get a single stock. The funds have provided another window to get into facebook.

written by Constantine Njeru \\ tags: Businessweek, Buy Stock, Company Investors, Company Stock, Exchange Funds, Facebook, Felix, Google, Greencrest, Investment Funds, Investments, Mutual Fund, No Doubt, Outsiders, Private Company, Retail Investors, San Francisco, Stock Funds, Stock Ipo, Stock Market, Stock Trade

It is the question that will never go away; How will facebook make money?

Predicting Facebook revenues in five years

Techcrunch has an article that answers that question. The writer, Adam Rifkin shows the ways that Facebook’s annual revenues could grow from $2 billion to more than $30 billion in five years a diverse set of revenue streams.

The author shows different ways that Facebook will make money.

Facebook Ads

Facebook Credits

Facebook Search

Facebook Games

Facebook pages & Places

The article is not about the revenue streams Facebook has; it’s about the revenue streams they’re about to have.

Read the whole article at techcrunch

written by Constantine Njeru \\ tags: Adam Rifkin, Ads, Amp, Different Ways, Facebook, Money Search, Revenue Streams, Search Games, Search Pages, Writer Adam

Zynga is the maker of Facebook games like Farm Ville and Mafia wars. The Zynga Game Network, as the company is officially called, is the hottest start-up to emerge from Silicon Valley since Twitter and Facebook.

If rumours are to be believed, Zynga is on a path to pocket as much as $500 million in revenue this year.

Investors hungry for another Google are asking when will Zynga file for an IPO or go public.

Zynga has not given a specific date for an IPO but one way to predict Zynga IPO is to look at the changes in shareholder numbers.

Once more than 500 individuals or institutions own shares in Zynga, securities laws mandate that the company go public. Google staged an I.P.O. in part because it hit that same threshold.

So, watch out the number of Zynga shareholders, once the number hits 500, the IPO date will be announced!

written by Constantine Njeru \\ tags: Facebook, Game Network, Games, Google, Institutions, Investors, Ipo, Mafia Game, Mafia Wars, Mandate, Securities Laws, Shareholder Numbers, Shareholders, Shares, Silicon Valley, Threshold, Twitter

Although Facebook is still a private company investors have been able to buy shares of the company. Shares of Facebook trade on a private-company stock market. The market is known as Secondmarket.

According to an article I read in Techcrunch

SecondMarket is a private stock market with thinly traded shares where demand often outstrips supply. (By definition, private stock sales trade in an illiquid market)

The Article makes analysis of the latest valuation of facebook, as of june 2010

Shares of Facebook on private-company stock market SecondMarket are going through the roof right now. This week, Facebook shares traded on SecondMarket passed $50, giving Facebook a total market value of $25 billion, according to sources with access to the market. (SecondMarket itself does not disclose pricing or valuation of the private stocks it trades)

Facebook shares are available to investors via SecondMarket. If you want to buy into facebook before the IPOthen you may consider opening an account at SecondMarket. According to the site, Signing Up is free!

written by Constantine Njeru \\ tags: Buy Shares, Company Investors, Company Shares, Company Stock, Facebook, Illiquid Market, Investment Tip, Private Company, Private Stock, Private Stocks, Stock Market, Stock Sales, Stocks Shares