Facebook (NASDAQ:$FB) is by far the biggest social network in the world in terms of active users. However, is an enormous user base a guarantee for a rising stock price and satisfied stakeholders? Ultimately, as a public company it has to be. Unfortunately the IPO of the Century is infamous for all the wrong reasons highlighting the difference between potential and reality. Facebook has made repeated attempts to transform its billion users into billions of advertising dollars to justify its very rich premium, while at the same time not chasing users away. I still don’ think they have succeeded and may never do so.
In a recent SEC filing ahead of its split, Rupert Murdoch’s News Corp (NASDAQ:$NWS) revealed that its publishing arm had suffered a loss of $2.1 billion for its last reported fiscal year, which included a $1.3 billion write down of goodwill. Does that mean that even conservatives don’t buy what Fox News is selling anymore?The split, which should be completed by the middle of the current year, involves the separation of its publishing arm from the rest of the company. Dow Jones Editor-in-Chief and Managing Editor of the Wall Street Journal (WSJ) Robert Thomson will head the new company which will take the name of News Corp (his tenure has already begun from the start of the New Year). The entertainment arm, which includes 20th Century Fox and the Fox Network will be renamed the Fox Group. Rupert Murdoch will be the chairman of both of these companies and the CEO of Fox Group. What is significant here is that, at least technically, Rupert Murdoch will not have any operational role to play with the publishing side of his business empire.
Malaysia has become the global destination of IPO hunters this year with several deals exceeding the billion dollar mark. Last month, the continent’s largest hospital operator, IHH, the Malaysian government’s healthcare unit with operations in Malaysia, Singapore (AMEX:$SGF) and Turkey, raised $2.1 billion in its IPO on the Bursa Malaysia.
Honestly, with the way things are going for U.S. IPO’s this year one has to wonder just what people are thinking in setting these things up.First we have Facebook (NASDAQ:$FB) which Morgan-Stanley (NYSE:$MS) hypes to the moon and back again, taking the IPO price from around $10-12 per share in November to $38 per share by the time the IPO occurs.We all know what happened after that.The underwriters spent most of the afternoon supporting the IPO price that first day and it cost hundreds of millions of dollars to do so.
Peter Pham is an author, international fund manager, and a registered financial director by the Cayman Monetary Authority (CIMA). In 2013 he published his first book entitled, The Big Trade: Simple Strategies for Maximum Market Returns. He currently manages the portfolio of a global hedge fund and runs an asset management company, Phoenix Capital. (read more)
The Big Trade: Simple Strategies for Maximum Market Returns
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