The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

nobody “Likes” Facebook other than Mark Zuckerberg

May23

if you can’t be bothered to read this entire post because your tearing your hair-out over Facebook – and Barack Obama, just consider this opening paragraph:

I TOLD you to short Facebook – http://j.mp/JXtQwP. but, NASADAQ “broke” (seriously) /1. so, nobody could. the stock might make sense at $9.  and, now Mark Zuckerberg and his crew are going to choke on their greed and the type of avarice that spawned the hell that Facebook creates daily in everyone’s lives.

but, you’re hooked now, so just keep going…

as you read this, regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its highly publicized stock offering last week, selectively informed clients of an analyst’s negative report about the company before the stock started trading.

the stock debut, originally set for 11 a.m. EDT Friday, was delayed more than half an hour because of “technical problems” at Nasdaq. some brokerages were still sorting out the aftermath today. just so we are clear… the “technical problem” had a lot to do with the fact that insiders were dumping their shares faster than Secret Service agents rearview mirroring their red-skirted girl friends when the lights came on.

I already knew that was both inevitable, and was going to happen. I have over two hundred emails from people grimly advising me that they tried to follow my guidance and short Facebook’s stock. but, NASDAQ won’t allow that, yet. trust me, that’s a whole other story in the realizing. so, watch for that.

in the harsh light of truth, companies going public typically want the momentum and desirable status that comes with stock being so coveted that the price rockets from the launch pad. that might be fair. but…

“I think that the underwriters convinced Facebook to offer too much stock,” said analyst Michael Pachter of Wedbush Securities. “The market didn’t have sufficient appetite for the number of shares offered.”

[pause]

did you know that market trackers have reported that people are much more likely to click on ads at Google than at Facebook, and US auto giant General Motors said the day before the IPO that it would no longer advertise on Facebook because it lacked impact? that evidently inspired an analyst at Morgan Stanley to drop his earnings forecast for Facebook on the eve of the IPO, but nobody let that information out of the bag, and left wanna-be shareholders holding another bag.

[end pause]

to wit…

The Reuters news service reported Tuesday that a Morgan Stanley analyst, Scott Devitt, cut his estimate for Facebook’s revenue this year to $4.85 billion from more than $5 billion earlier. Reuters reported that it was unclear whether Morgan Stanley had told only select clients about the reduced estimate. Reuters reported that the analyst cut his figures for Facebook while the company’s executives, including founder and CEO Mark Zuckerberg, were shopping the stock to potential investors in the weeks ahead of the IPO, a process known in investing as a “road show”.

The Wall Street Journal reported Tuesday night that Facebook’s chief financial officer, David Ebersman, decided shortly before the stock debut to raise the number of shares the company would offer by 25 percent. The Journal, citing people familiar with the planning of the stock offering, also reported that Morgan Stanley had assured Ebersman there was plenty of demand for the stock.

meanwhile, you all knew this was coming (the Greek- like tragedy that is the Facebook IPO, the “Zuckerberg generation” [I made that up, but it will stick], the pending Wall Street Journal expose, etc). but, faithful readers of this Blog know I’m not jumping on a facebook-dissing bandwagon, here, and had already started slapping their collective knees with me back when I wrote the following posts:

Facebook’s contribution to Terrorism.

“in any event, I’m, admittedly, a bit weary of using Facebook as a punching bag. however, I won’t tire of being relentless when it comes to pointing out that Mark Zuckerberg and his Facebook Mafia (this can be stated in something of positive light because it’s a reference to the wealth generated by the Facebook insiders and how they are seeding countless other venture at unprecedented speed) have it within their collective power to use the Facebook platform for good. but, right now, with millions of examples over the course of any given day, it’s being used for a lot of evil, and mostly in the hands of ignorant children.” Source: https://www.unsinkablebriancork.com (http://s.tt/14HTR)

Facebook is on a Mission but not from God.

so, it’s interesting (to me, any way) that Facebook and other forms of religion have similar global strategies.

why Facebook might be a great bad story.

“but, Zuckerberg, and the people around him, know this is a problem. and, every day makes it bigger and uglier.” Source: https://www.unsinkablebriancork.com (share this quote)

the distortion field of social media and marketing and it’s impact on marketing.

“…have you noticed that most photographs have him staring soullessly into the camera?” Source: https://www.unsinkablebriancork.com (http://s.tt/14fz8)

Facebook is dead to Me.

“Zuckerberg has made billions of dollars, and I’m sure he feels great about that. but, I hope one day he understands what he has unleashed upon a culture that was unprepared for his platform to be used as a weapon of mass destruction.” Source: https://www.unsinkablebriancork.com (http://s.tt/14I49)

the SEC had already said on Friday that it was looking into problems surrounding the IPO. on Tuesday, the agency’s chairman, Mary Schapiro, said: “I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook.”

by Monday, the top securities regulator for Massachusetts, William Galvin, said he had subpoenaed Morgan Stanley. Galvin said his office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimates for Facebook before the stock hit the market on Friday.

on Tuesday, Robert Greifeld, the CEO of the Nasdaq Stock Market, acknowledged to shareholders of Nasdaq’s parent company that “clearly we had mistakes within the Facebook listing.”

a spokesman for Facebook Inc., which is based in Menlo Park, Calif., said late Tuesday that the company had no comment.

but, I’m guessing Mark Zuckerberg isn’t going to “like” any of this.

right about the time the IPO was being unleashed upon the masses, the Facebook/ Morgan Stanley/ Goldman Sachs/ Satan PR machine kicked-in. we saw short-stories quoting Zuckerberg saying things to the effect, “I don’t care about shareholders, I care about the company and it’s vision”. but, he left-out the bit about his owning fifty-seven percent of the companies stock. so, that simply means he is an insider that cares about himself. we also learned that he married his long-time sweetheart partner co-conspirator from college. but, unfortunately he managed to time that like an estate planning event, which it was. so much for true love American greedy style. I sincerely hope his little marriage gets off to a better start than the colossal IPO. but, then she knew him when he ripped-off his early partners, and she knows him better as he steam-rolled his shareholders.

isn’t there a law in this land that says a wife doesn’t have to testify against her husband?

so…

while Facebook has fallen well below its IPO price, valuation metrics still show the stock is still pretty expensive.

at roughly thirty six dollars ($36), Facebook shares are trading at fifty-seven (57) times projected earnings for the next 12 months. I got this information from FactSet Research (and, forget about the trailing 12-month earnings PE; that’s at 73.50.) this is a much richer valuation than other tech titans that actually create things of value, suggesting the stock price remains too high relative to projected earnings, and could (probably) fall further. price-to-earnings (P/E) ratios are calculated by taking a stock’s price and dividing it by the company’s earnings per share. for instance, Google (why not?) trades at a forward P/E multiple of 14, meaning one Facebook share is more than four times as expensive as a share of Google. Apple’s forward P/E is 11.6, and Microsoft is 10.8. Cisco Systems trades at a forward P/E of 9 and Dell is at 7.1. but, I’ll tell you to buy Apple, Cisco, even Microsoft. but, again, I think Facebook is probably worth a look once it hits nine dollars ($9) a share.

I want to be reasonably fair… thusly, it’s probably worth noting a high P/E multiple doesn’t necessarily mean the (or any) stock is destined to decline. Amazon has a forward-year P/E ratio of 182. I’m thinking that aggressive spending has crimped the online retailer’s profits, but investors have found the company’s strong sales growth appealing enough to keep bidding the stock higher. the stock is up 25% this year.

Salesforce.com is another stock that has had a rich multiple for years. the stock trades at eighty-nine (89) times forward earnings, yet shares are up forty three percent (43%) this year. mind you, companies that invest in Salesforce don’t actually use it. most people in sales refer to it as “salesfarce”. but, risk-averse sales managers think they are supposed to buy it, so they do. that works for shareholders even while it might not bode well for corporate America.

I’m no hypocrite. and, I do see the world differently, and from unique angles, compared to most (that’s why I get to be a Cultural Architect, and you don’t). I see Facebook for what it is. it’s easily described as a platform for cheating spouses and cyber-bullying. it’s a company where engineers develop products that we don’t need. people just want them because they feed our vices. so, why should anyone really be surprised that Zuckerberg and a bunch of Wall Street hooligans that are probably in their early to mid thirties used the company to punk the zombie-like thundering herds that think wealth-building is attached to an easy-button?

peace be to my Brothers and Sisters.

brian patrick cork

1/ consider this… Monday shares briefly climbed above $42 before skittering back down and finishing at $38.23 with the help of underwriting banks that essentially put a floor under the stock by buying back shares when they dipped to the opening price. that means Morgan Stanley stepped-in and bought a lot of the shares that people were dumping. they played a key role in over-touting the opening price and are paying another price.

“It’s hard to know what would have happened if the banks hadn’t stepped in,” said Lou Kerner of the Social Internet Fund, raising questions about what will happen to Facebook’s share price when the Nasdaq reopens on Monday.

well… I’m guessing Morgan Stanley and Goldman Sachs probably got in around $10 to $12. so, that is the real bottom, and likely where the stock was heading if someone had not ‘broken” the system and created artificial buying.

analysts and bloggers are such Rascals!

June27

so… personally, I just find this flat-out goofy. but, I acknowledge this is just how it all works.

Morgan Stanley Issues ‘Tactical Buy’ On Apple Valuation

today, Morgan Stanley analyst Katy Huberty issued a “tactical” buy recommendation on Apple (AAPL) shares.

“We believe the share price will rise in absolute terms over the next 60 days,” she writes in a research note. “This is because the stock has traded off recently, making short term valuation much more compelling.”

to be clear… Apple’s stock took a short-term hit recently because analysts like Huberty made a fuss over production issues coming out of Japan just after the earthquakes.

but, now, she notes that post-Japan production constraints have eased, and adds with improved component supply, “Apple is negotiating price cuts with some suppliers,” potentially boosting margins for the June and September quarters.” Huberty adds that “after meetings in Taiwan last week, we expect Apple order cuts to ease and iPhone/iPad production to begin ramping aggressively from August through year-end.”

Huberty adds that “Apple’s next iPhone will begin production in mid to late August and ramp aggressively” into calendar Q4.

isn’t this obvious?

as a direct result, AAPL this morning is up $2.34, or 0.7%, to $328.69.

why am I blogging about this?

…mostly because I do believe most people don’t understand how this is part of a game.

I called Huberty, but I know she won’t return the courtesy. but, she’ll read about it all, here.

consider prior posts of mine if only for perspective: brian cork on those Wallstreet Rascals!, Outside of the insiders, and After Hours Trading.

years ago, David Sugarman, himself, taught me that you should buy a stock never expecting to sell it. Apple has always fit that frame of reference for me. and, I always know that when analysts (and, more-and-more so today, bloggers) attack a stock, even indirectly, we know it’s an effort to create room and a buying opportunity for their “bank”. an example, here, is that we all knew the production issues in Japan would be short-term. they would impede retail initiatives. but, there was never any reason for someone with anyone “long” on Apple to be concerned. and, as many of you know, I’m convinced that Apple is a thousand dollar (or the equivalent after splits) stock inside the next five years.

what will always insult my sense of fairness and justice is that authorities understand this is part of the game and allow it by not enforcing “tactical” information designed to mislead citizens.

thank God, most of the day traders proved Darwin correct several years ago.

peace be to my Brothers and Sisters.

brian patrick cork

 

the Microsoft curse

June1

it’s no secret I hold Microsoft in utter disdain. contempt is a good word, as well.

…utter contempt.

they have the simple audacity to exist. this in light of the simple fact that they pale in comparison to Apple, in terms of innovation and profitability. of course this is poetic given the fact that Bill Gates gave birth to Microsoft by stealing from Steve Jobs. to day, Apple’s marketcap eclipses Microsofts by an order-of-magnitude.

…whatever… that’s old news.

what is becoming more apparent, and every day is that Microsoft’s evil core carries with it something of a curse.

As it turns out, at least eight firms have recently cut ratings on Microsoft stock, including Goldman Sachs, Canaccord, WestLB and Citigroup. as bad as Tuesday was, Wednesday will be another rotten day for Nokia shareholders. and, it’s what they get for partnering with Microsoft.

in a fast changing market, Nokia is losing ground very rapidly. The profit warning for the second quarter provided evidence that the next couple of years will prove very challenging, with the gross margin and market share trends of the last four quarters continuing, if not accelerating even more. the collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast and the window of opportunity for an alternative ecosystem is vanishing rapidly. even modeling a scenario in which Nokia stabilizes next year leads us to believe that the stock will under-perform over the next twelve months.

you think I’m, biased, and possibly opinionated, eh?

Bernstein Research analyst Pierre Ferragu early Wednesday cut his rating on the stock to Underperform from Market Perform, chopping his price target on the shares to $4, from $7.33.

I called him myself. if he were standing in my Boardroom, right now, he will tell you that he’s come to the conclusion that Nokia is in deep trouble, which continue to get deeper. and, he does not think the deal to switch to phones based on the Microsoft Phone 7 OS will save the beleaguered, and former technology darling.

consider the harsh realities. I believe new guidance issued by the company is a strong indication that a worst case scenario is crystallizing. I have to believe Nokia’s Device business will experience operating losses in the third quarter of this year and in the first quarter of next year. I’m also convinced that the launch of Windows-based phones will be challenging, to say the least, given the likely loss of traction and visibility of the Nokia brand, as well as the speed at which the opportunity for a third ecosystem to emerge is vanishing.

Nokia’s stock isn’t even worth the effort to short it.

but, Google is.

later, I’ll discuss what I’m confident will happen to Facebook now that they’ve sold their soul and part of the company to Microsoft. Facebook has an evil element to begin with. but, now the rot can’t help but become evident. look for the story in or around June of 2013.

later, I said. Google now has three problems that you need to understand:

it underestimated Facebook. evil spreads like plague (just look at Android [AKA “dumb down kid machines”]) and over five hundred million people are on Facebook. this includes millions of kids that lie to open-up accounts, and people that create a statistic that says Facebook accounts for sixty-one percent of divorces in our country, alone.

Larry Page is now CEO. he’s not a leader. you don’t have to trust me on this one. he’ll prove it himself.

finally, but not really, there is so much more. but, neither employees or shareholders can build wealth owning Google stock. so, the company is easy to recruit from. the company built it’s collective employment foundation on greed and a sense of entitlement. if you understand my core business, you get how I know this. let’s be clear, I stand against such things. I fight them.

the best way to win and make money with Google is hope your enemies buy their products and you shorting their stock.

do it!

if you are wondering what Microsoft has to do with Google, just understand the lack of innovation, creativity and soul that permeates both organizations. how could purgatory, in it’s form, be any different?

peace be to my Brothers and Sisters.

brian patrick cork

alex guana, Apple, and the life of Brian

March21

there was something of a “shake-up”  last week on wall-Street relative to Apple and the earthquakes in Japan.

SAN FRANCISCO (Dow Jones) – Apple Inc. (AAPL) got a rare downgrade on Wednesday as a JMP Securities analyst (Alex Guana) pointed to results from the company’s main Asian manufacturing partner that may indicate some relative sales weakness in some of the technology icon’s products.

mid week, on the heels of the turbulence emanating out of Japan, analyst Alex Gauna lowered Apple to a rating of market perform, or neutral, just before the opening bell. I’ll say it right, here, analysts always know just how they can impact a stock, minutely, and, timing is absolutely everything. he made things happen that left the ordinary shareholder defenseless because his information could only be seen by industry drivers.

I freely admit I took this downgrade personally. so, I’m biased. however, my fervent support of Apple, to include a belief in it’s leadership, valuing it’s products, and being an evangelocal shareholder are based on fact, information few people have access to, and a lot of research and keen understanding of the market and all of this affects it. my daughters weddings, and school are hinged on Apples success (mind you, shares would have to drop below $4 for there to be any concern other than the loss of substantial financial wealth). but, there are many, many people out there that take me sersiouly when I say everyone, everyone should own Apple stock. I’ve said it on this blog before, and I’ll say it again… Apple is a $1000 stock, at some point (well inside the next five years). because of my guidance (investors, givers, charities, ministries, etc) around  all of that, thousands, possibly hundredes of thousands, of people in far-flung countries, places, simply eat.

so, I take information, and worse, misinformation damn seriously.

that said, I’m going to drop, for only a few minutes, into a lighter mode – and, drag you with me. this life episode, some how, reminded me of the movie Life of Brian, and uttering the word “Jehovah!”.

and, now you see why.

we already have Guana jokes abounding:

there are two kinds of Wall Street analysts: Those that analyze with clarity and understanding, and  (the job-hopping) Alex Guanas. the guys at Bank of London are already calling gaffes, “pulling a Guana”.

so… with the stage set, who the hell is this guy? we’ve never heard of him, or his firm before now. yet the market drops its pants despite better guidance from other and leading investment bankers, like Credit Suisse.

NOTE: my sense of fairness has me sharing a detailed interview over this between Matt Phillips at MarketBeat and Guana, himself. don’t simply take my word for anything. you need this information for it’s own perspective. my credibility is always enhanced by the facts. drive your own conclusions, accordingly while reading:  Blasphemer!: Meet the Analyst Who Downgraded Apple/ his ultimate point is that some how, some how, what happened in Japan will create reduced demand for the iPad2.

“But we also know how much people love their Apple technology, and it is an admiration we share (ironically Fed Ex just delivered the first of my two iPad 2 orders halfway through our dialog). So it was surprising how thoughtful and respectful the vast majority of our investor interactions were, and how noticeably it differed from past actions of a similar nature. There were only about a dozen hateful or angry calls into our firm that I am aware of. By all accounts it appears our downgrade did not go unnoticed, so I am left to conclude that most found value in the wake up call, and it also suggests to me that AAPL has a high quality and classy investor base.” – Alex Guana

“…classy investor base”?

he says a lot of things in the article. readers will want to buy-into Guana’s “earnest[ness]” (his word). yet, there are still lines wrapping themselves around Apple Stores (and malls) for the iPad2 two weeks after launch. and this guy is arguing that demand has decreased?

fair question #1: “where the hell is the downgrade for all the other supposed Tablet-makers who won’t even get they copycat tablets into the market due to lack of certain piece-part supply?”

I’ve had Santi do the analysis (he sacrificed his first iPad2) to determine what components are used inside the device. he has identified at least five parts that come from Japan: storage and memory from Toshiba Corp. and Elpida Memory Inc., an electronic compass from AKM Semiconductor, touch-screen overlay glass that is likely from Asahi Glass Co. (which did report dmage to several of it’s facilities), and a battery from Apple Japan Inc. (a subsidiary of Apple). several of these companies are clients of ours. most are saying their facilities were not damaged by the earthquake or tsunami. however, they’ll likely be affected, some how, by general logistical problems in Japan, including intermittent electricity and hurdles to transporting raw materials and shipping-out products.

Apple can order some of the components from alternate suppliers. they have some fairly good experience and expertise when it comes to supply, demand and managing that with great margins for profit. this includes Samsung Electronics Co. in South Korea and Micron Technology Inc. in the United States.

the piece I, candidly, don’t have an answer to is questions around glass. iSuppli (analysis firm) said it would be harder to find substitutes for the glass, which it believes is a new type of glass calledHalo Effect“, especially Apple’s Halo Effect) is well documented.

meanwhile, consider the voice of (supplier reason) offered by Eric Savitz from The Tech Trade: Apple Concerns Ease On Component Supply Issues/ do it!

as I prepare to wrap this post up, I’ll remind the collective you that it takes one terrorist to cause a panic. to wit, some of the things Guana said were completely out of context.

…[thoughtful pause]…

if you read the early releases when his firm “dropped the Guana”, there are typos and poor grammar. this indicates hurried activity. that smacks of agenda, and less so careful guidance.

Apple shares dropped almost five percent (5%), or sixteen dollars, ($16) to $329. that’s admittedly a lot of money if converted into share price and valuation. especially in light of the fact Apple’s stock hit three hundred and sixty five dollars ($365) recently. some of the downside was likely the result of the broader market’s latest selloff. but, momentum was carried by panic and greed. possibly evil.

…so Credit Suisse comes back within hours and grades Apple at five hundred dollars ($500).

thanks Credit Suisse something like the U.S. Calvary. go Credit Suisse and $500!

Apple’s share price  has no choice but to go there now. mostly because stocks like Apple tend to go back and surpass prior points. that’s just the way it is. and I think that was part of Guana’s thinking.

hacks like Guana don’t make a stand (or, stick their necks out) based on altruism. Guana was possibly “swinging for the fences”. if you read the first article, Guana has jumped around quite a bit with employers I’ve referred to him earlier as a “job-hopper”). As most of you know, I’m involved with one of the top recruiting companies in the world. so, I’m something of a Subject Matter Expert (“SME”) on this topic, as well. you can bet I’ll be monitoring the fall-out of all this with a curiosity  to see if Guana and his handlers are polishing their resumes along with Apples.

its likely he took orders from some sinister and shadowy organization, possibly headed by that damn black dog or smoking rabbit and took a bullet. the temporary drop in the stock served no other purpose than to create a buying opportunity for certain powers, and you were, otherwise, powerless.

as obvious as this “play” is, how can the regulators be so clueless if not powerless, themselves?

in other news, Cisco just declared their first ever dividend, finally doing something smart with their cash.

peace be to my Brothers and Sisters.

brian patrick cork

 

 

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"What am I looking at?", you might wonder.

Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

brian cork by John Campbell





photos by John Campbell

 

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