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Comment by spindritf | Hacker News Reader

Where's the "dump"?

Mom and pop investors who own facebook stock in their retirement accounts paid $2B to VCs for Oculus VR.

I don't second guess Mark Zuckerberg, as that is a consistently losing bet. That being said, there is no reason the price should have been $2B. The frothy prices, mean that a $100M company was priced at $2B and that dumped a lot of money from Mom and Pop to VCs.

They have also seen a 78% increase in stock price over the past year so maybe using Facebook shareholders as an example isn't the best way to make your point

Facebook has revenue, so it's sort of immaterial to the Snapchat discussion... at least in the short term.

Yet in the long term I'm not so sure. Facebook's revenue is built on doing things that cannibalize the value of their platform-- annoying ads, creepy surveillance, even creeper "experiments" on their users, etc. That's making them decidedly uncool. Network effects are holding their popularity high for now, but while network effects are powerful they are not unstoppable. Things can "tilt" at any time.

I think that's why Facebook is acquiring things like Oculus. If they're to become the next Yahoo they want to make sure they've invested in some other properties. That of course is why there's still a Yahoo-- the core Yahoo brand is almost worthless.

Yeah but that's the funny thing about pension money going into equities. They have "seen" the 78% increase but not realized it unless they cashed out their accounts and retired right then. Wall St / US pension funds turned everyone into "investors" while mom & pop still think the funky numbers on their statements are their "savings". I mean I'm simplifying, I'm not a US subject, but that's what it seems like from afar.

People said that Facebook overpaid for Instagram at 1B valuation. In hindsight that was extremely good deal that will pay many times over now that Instagram has 200M+ users and is still growing.

The bet is that Oculus will be used in many areas (not just gaming) and will become multi-billion business in the future. It a big bet and it could go wrong. Keep in mind that $2B is 1% of FB stock price - placing 1% bet on new promising technology is not unreasonable.

IG is making money now?

Instagram has ads - not sure if they are profitable. Service should not be too expensive to run - images are on smaller size so traffic and storage should be cheap.

http://blog.business.instagram.com/post/95314562151/business...

Aren't many pension funds VC LPs? Seems they would also benefit from this phenomenon too.

The article speculates that SnapChat will offer an IPO.

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