April 20, 2021

Facebook Gifts Urges Users to Shop While They Share

The nudge comes from a new Facebook service called Gifts. It allows Facebook users — only in the United States for now — to buy presents for their friends on the social network. On offer are items as varied as spices from Dean DeLuca, pajamas from BabyGap and subscriptions to Hulu Plus, the video service. This week Facebook added iTunes gift cards.

The gift service is part of an aggressive moneymaking push aimed at pleasing Facebook’s investors after the company’s dismal stock market debut. Facebook has stepped up mobile advertising and is starting to customize the marketing messages it shows to users based on their Web browsing outside Facebook.

Those efforts seem to have brought some relief to Wall Street. Analysts issued more bullish projections for the company in recent days, and the stock was up 49 percent from its lowest point, closing Tuesday at $26.15, although that is still well below the initial offering price of $38. The share price has been buoyed in part by the fact that a wave of insider lockup periods expired without a flood of shares hitting the market.

To power the Gifts service, Facebook rented a warehouse in South Dakota and created its own software to track inventory and shipping. It will not say how much it earns from each purchase made through Gifts, though merchants that have a similar arrangement with Amazon.com give it a roughly 15 percent cut of sales.

If it catches on, the service would give Facebook a toehold in the more than $200 billion e-commerce market. Much more important, it would let the company accumulate a new stream of valuable personal data and use it to refine targeted advertisements, its bread and butter. The company said it did not now use data collected through Gifts for advertising purposes, but could not rule it out in the future.

“The hard part for Facebook was aggregating a billion users. Now it’s more about how to monetize those users without scaring them away,” said Colin Sebastian, an analyst with Robert W. Baird.

He added: “Gifts should also contribute more to Facebook’s treasure trove of user data, which has the benefit of a virtuous cycle, driving more personalization of the site, leading to better and more targeted ads, which improves overall monetization.”

Facebook already collects credit card information from users who play social games on its site. But they are a limited constituency, and a wider audience may be persuaded to buy a gift when Facebook reminds them that a friend is expecting a baby or a cousin is approaching her 40th birthday.

The Gifts service, which grew out of Facebook’s acquisition of a mobile application called Karma, was introduced in September and expanded earlier this month on the eve of the holiday shopping season.

Magnolia Bakery, based in New York, was among Facebook’s early partners for Gifts. Its vice president for public relations, Sara Gramling, said the company had sold roughly 200 packages of treats since then. She counted it as a marketing success. The bakery, which gained fame thanks to “Sex and the City,” had only recently begun shipping its goods. “It was a great opportunity to expand our network,” she said.

Magnolia Bakery isn’t exactly catering to the masses. A half-dozen cupcakes cost $35, plus about $12 for shipping. Facebook, Ms. Gramling said, takes care of the billing. The bakery is eyeing Facebook’s global reach, too, as it opens outlets internationally, especially in the Middle East.

One of the appeals of Facebook Gifts is the ease of making a purchase. Facebook users are nudged to buy a gift (a gift-box icon pops up) for Facebook friends on their birthdays. They are offered a vast menu to choose from: beer glasses, cake pops, quilts, marshmallows, magazine subscriptions and donations to charity. They are asked to choose a greeting card. Then they are asked for credit card details. Facebook says it stores that credit card information, unless users remove it after making a purchase.

Facebook has declined to say how many users have bought gifts, only that among those who have, the average purchase is $25.

David Streitfeld contributed reporting.

Article source: http://www.nytimes.com/2012/11/28/technology/facebook-gifts-urges-users-to-shop-while-they-share.html?partner=rss&emc=rss

DealBook: Yelp Surges After Lockup Expires

7:28 p.m. | Updated with closing price.

Yelp is shrugging off the social media slump.

When early investors first get a chance to sell their shares in a newly public company, a stock typically falls as owners pare back their holdings. In the case of Yelp, the stock soared after the so-called lockup period expired.

On Wednesday, shares rose 22.51 percent to close at $22.37, its largest one-day gain since the company went public in March.

Given the gains, it appears that Yelp’s early investors decided to stick with their holdings. “It’s refreshing to see insiders with discipline,” said Michael Pachter, a Wedbush Securities analyst.

The stock got an added boost from short-sellers, investors who were betting that the stock would fall. When the stock rose, they had to cover their positions and buy shares.

Yelp’s post-lockup performance stands out from its peers’.

Shares of both Groupon and Facebook dropped sharply after their lockups ended. Facebook hit a record low this month when early investors started to sell some shares.

Peter Thiel, Facebook’s first outside investor, sold 20 million shares at roughly $20, or nearly half the original offering price of $38. The large sale by Mr. Thiel, who also sits on Facebook’s board, spooked some investors who interpreted it as a sign that insiders were losing faith in the social network.

Many analysts expected the same fate for Yelp. Since mid-August, shares of the online reviews site have been hammered, dragged down in part by concerns that early investors would dump stock once the lockup period ended.

Adding to the pressure, Yelp faces the same challenges of other young Internet companies. While the company is one of the most popular review sites on the Web, it is also struggling to convert more local businesses into paying users. Consumers can get access Yelp’s reviews free, and vendors have the option to spend money on advertisements or other services.

But only a fraction of businesses with profiles on Yelp — about 4 percent — pay the company anything. Last quarter, Yelp’s revenue rose 67 percent to $32.7 million, although the company recorded a net loss of 3 cents a share.

“This is still a concern,” said Aaron Kessler, a Raymond James analyst. “How many businesses will actually advertise on Yelp versus just get free traffic from the site?”

A Yelp spokeswoman declined to comment on Tuesday.

The stock action on Wednesday seems to indicate that Yelp’s biggest investors are holding on to their shares — at least for now. The company’s five largest shareholders, Bessemer Ventures, Elevation Partners, Benchmark Capital, Max Levchin and Jeremy Stoppelman, the company’s chief executive, collectively own more than 80 percent of the company’s stock.

Unlike some recent Internet I.P.O.’s, Yelp’s biggest holders have been conservative about their stock sales. No insiders sold in the I.P.O., with the exception of the company’s charitable foundation, which sold 50,000 shares, according to filings.

In contrast, the game maker Zynga allowed some insiders to sell at the I.P.O. in December and then again at a second offering in April. Shares of the online game company are down 70 percent since its debut.

Article source: http://dealbook.nytimes.com/2012/08/29/yelp-surges-after-lockup-expires/?partner=rss&emc=rss

DealBook: Nasdaq Sets Aside $40 Million to Settle Facebook Claims

A Nasdaq ticker in Times Square.Ángel Franco/The New York TimesA Nasdaq ticker in Times Square.

9:28 p.m. | Updated
The Nasdaq OMX Group is taking its first step to quell investor anger over the flawed debut of Facebook shares last month — pledging $40 million to cover broker losses — but some customers and competitors quickly raised objections.

The stock market operator said on Wednesday that it would set aside $13.7 million in cash and pay out the rest in trading rebates to settle disputes by investors arising from technical malfunctions in Facebook’s initial public offering on May 18, the biggest technology I.P.O. ever.

Nasdaq has maintained that the decline in the price of Facebook’s stock since the first day was because of factors other than the glitches on the exchange. Facebook’s shares rose 3.6 percent to $26.81 on Wednesday, an overall strong day for stocks around the globe, but they are still down 29 percent from the $38 offering price.

Retail investors bore the brunt of the losses from the fumbled I.P.O., but they will not be able to appeal directly to Nasdaq. Instead the exchange is making the money available to the market-making firms that traded on behalf of investors.

Some of the Nasdaq money could flow through to investors who lost money on the first day of trading, including when the exchange ignored their requests to cancel purchase orders. But some analysts say they doubt that the compensation will do much to restore confidence among ordinary investors, who had already been turning away from stock markets before the I.P.O.

Facebook's first day in public trading, May 18, touched off excitement at the Nasdaq in New York.Scott Eells/Bloomberg NewsFacebook’s first day in public trading, May 18, touched off excitement at the Nasdaq in New York.

Nasdaq’s proposal to compensate firms by reducing future trading costs quickly faced opposition from other exchanges, who said the rebates gave Nasdaq an unfair advantage.

Even if approved by regulators, the plan still falls far short of the more than $100 million that industry experts have said market-making firms lost when errors in Nasdaq’s systems led to delays in setting an opening price for Facebook. About 30 million shares were executed improperly after trading that was supposed to start at 11 a.m. was delayed by a half-hour.

“Their proposed solution to this problem is simply unacceptable,” Knight Capital, a major brokerage firm that has claimed some $30 million of Facebook-related losses, said in a statement. “As previously stated, the company is evaluating all remedies available under law.”

Nasdaq’s chief executive, Robert Greifeld, has admitted that the ordeal has left his company “humbly embarrassed.” In Wednesday’s announcement, the exchange said that it had hired I.B.M. to review its technical systems.

Others have been criticized for the Facebook fiasco, among them the lead underwriter, Morgan Stanley, for setting too high an offer price. But Nasdaq has been a popular target for investors and firms involved in the I.P.O. The common thread of their complaints has been that the Nasdaq technical stumbles spooked investors and created a climate of fear that sent the Facebook share price down.

Such are the scope of Nasdaq’s problems that its main rival, NYSE Euronext, briefly tested the possibility of luring Facebook onto the New York Stock Exchange, people briefed on the advances have said.

Nasdaq has already explained what lay behind the problem. As Nasdaq’s systems were setting Facebook’s opening price, a wave of order modifications forced the exchange’s computers into a loop of constant recalculations. The firm was forced to switch to another system, knocking out some orders and delaying many trade confirmations.

The net effect was investors left guessing as to whether they held any Facebook shares at all. For days afterward, traders claimed that they still did not know how many Facebook shares they held, while others argued that the technical problems left them holding stock that quickly plummeted in value on Friday and days afterward.

Nasdaq’s proposal on Wednesday has several qualifications. Member firms must prove they were directly harmed by malfunctions that erupted before trading started at 11:30 a.m. on the first day of trading, when the stock opened at $42.

And the program applies only to certain kinds of trades, including sale orders priced at $42 or less that did not execute or were carried out at lower prices, and purchases that were priced at $42 but were not immediately confirmed. All claims will be evaluated by the Financial Industry Regulatory Authority.

Brokerage firms that handled the problematic trades declined to comment or said they were reviewing Nasdaq’s proposal.

The swiftest response came from other stock exchanges.

NYSE Euronext complained that the proposal would incentivize trading firms to flock to the beleaguered exchange to claim their rebates. The plan would “allow Nasdaq to reap a benefit from market share gains they would not have otherwise received,” NYSE said in a statement.

A spokesman for DirectEdge, another major stock exchange operator, said that the company had “several significant concerns with the Nasdaq remedy and plan to aggressively voice them throughout the process.”

The Securities and Exchange Commission will ultimately decide whether to approve the compensation program.

Article source: http://dealbook.nytimes.com/2012/06/06/nasdaq-sets-aside-40-million-to-settle-facebook-trading-claims/?partner=rss&emc=rss

DealBook: Groupon Weighs Raising Its I.P.O. Price

Groupon headquarters in Chicago.Tim Boyle/Bloomberg NewsGroupon headquarters in Chicago.

It appears that investors are flocking to Groupon’s forthcoming initial public offering like customers to one of the daily deal giant’s coupons.

The company is considering raising the price of its shares above its current expected range of $16 to $18 a share, people briefed on the matter told DealBook on Friday. That would value the online coupon pioneer at potentially more than $12 billion.

Behind Groupon’s deliberations, these people said, is heightened demand from potential investors. The company’s executives and bankers, led by Morgan Stanley, Goldman Sachs and Credit Suisse, have completed the first week of a multistate road show. The presentation team has been pitching institutional investors about the three-year-old start-up’s business prospects, describing them as primed for enormous growth.

On Friday, Groupon held a presentation before a crowd of more than 300 people at the St. Regis Hotel in Midtown Manhattan.

Groupon’s management and executives had not reached a final decision to raise the offering price as of Friday night, these people said. Should they move ahead, the new price range would likely be disclosed in an amended prospectus on Monday.

A representative for Groupon declined to comment.

Such a move would be only the latest shift in expectations for the offering, the latest in a new generation of Internet start-ups that has captured the public’s fancy. But the road to going public has been rocky for Groupon, as critics seized upon several accounting revisions as potential concerns for the company’s health.

Next week, Groupon is expected to visit prospective investors out west, including in cities like Los Angeles and Denver. Its bankers expect to price the I.P.O. on Nov. 3 and its stock to begin trading the next day.

Article source: http://feeds.nytimes.com/click.phdo?i=667106d7241b00cd5aa0de7cdbbaae6e

DealBook: An I.P.O. Built on the Basics: Sugar and Coffee

Nigel Travis, chief executive of Dunkin' Brands, celebrated the stock offering outside the Nasdaq MarketSite in New York.Mario Tama/Getty ImagesNigel Travis, chief executive of Dunkin’ Brands, celebrated the stock offering outside the Nasdaq MarketSite in New York.

The latest splashy stock debut had all the markings of a sizzling technology start-up company: a better-than-expected offering price, a swarm of investors clamoring for shares and a first-day pop that defied a broader market drop.

But the company was not an online music service or a social networking site. It was a fast-food chain that sells bite-size Munchkin donuts and extra-large cups of coffee.

On Wednesday, shares of the Dunkin’ Brands Group, which priced its initial public offering at $19 a share, soared 46.6 percent, to close at $27.85. In spite of the turbulent market conditions related to the gridlock over the debt ceiling talks, the stock was flying high.

The gains on the first day mimicked those of newly minted Internet stocks like LinkedIn, Yandex and Pandora. At that level, Dunkin’, whose shares trade on the Nasdaq market under the ticker symbol DNKN, is valued at about $3.5 billion.

“People love brands, and we have two iconic brands with real history,” said Nigel Travis, the company’s chief executive. “We felt like this was good timing.”

For all the attention heaped on Facebook, Groupon, Zynga and other technology start-ups developing the next new thing, demand has been just as strong for some basic businesses that sell food, clothes and other consumer goods.

A crush of international and domestic investors tried to get initial public stock offering shares of Dunkin’, with orders amounting to more than 20 times the size of the eventual offering, according to one person with knowledge of the matter. In all, Dunkin’ sold 22.25 million shares and raised $422.75 million.

Over the last year, 20 consumer-oriented companies have gone public, generating average returns of 29.5 percent, according to Renaissance Capital, an I.P.O. advisory firm. Francesca’s Holdings, a women’s boutique chain that went public last week, is trading 56 percent above its offering price. Despite getting off to a shaky start, retail offerings overseas have also posted strong gains, with Prada up 25 percent from its initial offering and Ferragamo up 44 percent.

By comparison, there have been 50 technology offerings in the last 12 months that have gained a more modest 21.7 percent on average. The initial offering market over all is up 16.4 percent in the same period, based on Renaissance Capital data.

“Consumer I.P.O.’s are resonating well because they are easy to understand,” said Paul Bard, vice president of research at Renaissance Capital. “Despite cautious signals, investors are looking forward and expecting consumer spending to improve.”

For Dunkin’s new investors, the offering was an opportunity to bet on a well-known brand that is expanding in the United States. Its brands Dunkin’ Donuts and Baskin-Robbins have long been staples in America’s quick-food industry, with histories stretching back to the 1950s. Five years ago, the spirits maker Pernod Ricard sold the company for $2.4 billion to the private equity firms Bain Capital Partners, the Carlyle Group and Thomas H. Lee Partners, which still own 78.3 percent.

Dunkin’, which makes nearly all its money from franchising, blankets the New England and New York areas with about one store for every 9,700 people. In contrast, the Western half of the United States suffers from a severe Coolatta shortage. Unlike the coffee-peddling rivals McDonald’s and Starbucks, which have thousands of locations in the region, Dunkin’ Donuts has just 109 outlets. According to Mr. Travis, the company will open about 250 stores this year and will double the number of American stores in 20 years.

“This is a long-term play for us,” said Josef Schuster, the founder of the money manager IPOX Schuster, which got shares in the Dunkin’ offering. “Although their sales growth is modest, they haven’t touched the West, and that’s where strong earnings growth can come from.”

Unlike Web start-ups, consumer stocks are often established companies generating cash and profits. In 2010, Dunkin’ Brands earned $26.9 million on revenue of $577.1 million. Teavana and the Chefs’ Warehouse, other retail companies that are expected to start trading this week, are both profitable, too.

The consumer stocks are also cheaper in many cases. Dunkin’ is selling for about six times sales. LinkedIn trades around 39 times trailing sales.

“Many of these companies have a strong earnings record and are modestly priced,” said Mr. Schuster, who also owns the stocks of other recent offerings like Francesca’s and Vera Bradley, the accessories maker. “As these stocks continue to perform well, demand increases for consumer brand I.P.O.’s.”

Consumer stocks, particularly newly minted ones, are hardly a sure bet, particularly in an environment with a weak job market, anemic economic growth and global uncertainty. The private equity-backed Dunkin’ has the added burden of a $1.89 billion debt load. The company plans to use proceeds from the offering to help pay down its debt, according to a recent filing.

Retail companies typically do not have the same trajectory as fast-growing technology start-ups, either. Revenue at Dunkin’ increased 7 percent in 2010. LinkedIn’s sales more than doubled in the same period.

And today’s hot I.P.O. can always turn out to be tomorrow’s dud. Shares of Krispy Kreme Doughnuts, the fast-food chain that had a popular offering in 2000 and at one point traded for nearly $50, is currently at $8.27.

Still, the mood was celebratory on Wednesday when Dunkin’ went public on Nasdaq. To mark the day, the stock exchange unofficially changed its name to Nasddaq and splashed its logo with the signature pink and orange hues of Dunkin’ Donuts.

As shares of Dunkin’ climbed higher, Mr. Travis and his team sipped on the brand’s coffee and nibbled on a generous spread of doughnuts, Munchkins and Baskin-Robbins ice cream, which came in flavors like mint chocolate chip and strawberry.

“I’ve had at least seven cups of coffee today and a doughnut,” said Mr. Travis. “I’m delighted with the current enthusiasm, but I’ll wait until next week before I get too excited.”

Article source: http://feeds.nytimes.com/click.phdo?i=3705be33dd822cf40f9c21bb82a2e5b1

DealBook: Shares of Zillow Soar 90%

4:08 p.m. | Updated

Not even the weak housing market can slow down the rush for Internet stocks.

Shares of Zillow, the online real estate information company, soared nearly 79 percent in its stock market debut on Wednesday, closing at $35.77. The company, which set its initial public offering price at $20, traded as high as $60 earlier in the day.

Demand for shares of Internet companies has reached a fever pitch in recent months, raising questions about whether this boom could be a bubble. The professional social networking site, LinkedIn has more than doubled, since going public earlier this year. Investors are eagerly awaiting the public offerings sector’s biggest players like Facebook and Groupon.

Like other Internet companies, Zillow has upsized expectations about its initial public offering. Originally, the company had set its price range at $12 to $14 a share, later increasing it to between $16 and $18. It finally landed at $20.

But as with peers, Zillow — a combination of the words “zillion” and “pillow” — is still struggling to be profitable. The company reported a loss of $6.8 million in 2010, according to its recent regulatory filing.

Still, the company is growing. Zillow revenues increased 74 percent, to $30.5 million. Earlier this year, Zillow entered into a partnership with Yahoo! Real Estate and acquired Postlets, a real estate listing service.

Citigroup was the underwriter on the offering.

Article source: http://feeds.nytimes.com/click.phdo?i=e54731b1f597d250cafd7bedf43b1fad

G.M. Still Hopeful of Fully Paying Back the Government

The executive, Daniel F. Akerson, said that G.M. was working to maximize its payback to taxpayers, but that the government did not make a bad investment even if it did not recover the full amount given to the company.

“At some level, the government’s got to decide: are they an investor or were they trying to save the industry?” Mr. Akerson told reporters ahead of G.M.’s first annual stockholder meeting since its 2009 government-financed bankruptcy.

A report last week by the White House National Economic Council concluded that the government would probably have to write off about $14 billion of the $80 billion spent rescuing the auto industry by the Bush and Obama administrations.

Mr. Akerson said that a G.M. liquidation would have saddled taxpayers with more than $17 billion in pension liabilities. G.M. has cut its pension shortfall in half since 2009, he said, adding that he wanted the plan to be fully financed during his tenure as chief executive.

Because most of the $50 billion G.M. received was converted to an equity stake held by the Treasury Department, Mr. Akerson said G.M. had “technically” repaid its debt to the government, but he added that executives were “doing our level best” to help taxpayers recoup the remaining amount. The Treasury, which still owns 26 percent of G.M., has recovered about half of its investment in G.M.

Shares of G.M. rose 22 cents on Tuesday, to $28.78, compared with the initial public offering price of $33 in November. To break even, the Treasury needs to sell its remaining shares at an average price of about $53.

The Treasury is expected to begin selling more of its G.M. stake as soon as August, but it can wait longer if the shares remain below their original price. G.M. has no say in the matter, Mr. Akerson said.

He said the recent decline in G.M.’s share value mirrored what had happened to competitors’ stocks and attributed it to economic instability.

“There’s a lot of uncertainty about a jobless recovery,” he said.

He said G.M.’s performance was tied to the economy and that the government needed to reduce its deficit to calm the markets and avoid “playing chicken” with its credit rating.

G.M.’s stockholder meeting, held in Detroit for the first time since 1990, was sparsely attended and contained none of the tension that had been common before its bankruptcy. The company has posted five consecutive quarterly profits, earning $4.7 billion last year. Mr. Akerson opened the meeting by contrasting G.M.’s progress since bankruptcy with its bleak outlook before that.

“General Motors almost made history by not making any more future histories,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=9d0e78b29454f71abbbc7d0e55e3b86e