Tip: Why (and How) You Should Buy Facebook Stock

Posted on May 18, 2012 by Arnold Tijerina

First, a disclaimer: I am not a financial advisor in any way, shape or form. What I AM is an entrepreneur so take this advice from that standpoint. There is never a guarantee of future value but this is why I think it’s a good investment.. if bought in a certain way.

Today, Facebook held its IPO to much media attention, speculation and became the largest IPO ever in the history of IPOs. There is a ton of advice saying that the opening cost is overpriced, to wait, etc. and that its a bad initial investment. I disagree but only from the perspective, and using the method, I describe below.

When a popular company has an IPO, they can choose whether or not to allow investors to obtain a physical stock certificate or not. Most companies do not and, if they do, its for a limited time. Facebook chose to allow investors to request and obtain physical stock certificates.

I’ve been selling things on eBay for over 14 years and I’m always on the lookout for things to sell and make a profit so I thought about this and did some research.

When Apple had its IPO in 1982, shares cost $22 each. They also offered the option to buy a physical certificate. Without any consideration for the current market value of that share, the actual certificate itself has a market value of almost $600 on eBay. Say you bought 100 shares and asked for individual certificates. The certificates ALONE would make your initial investment of $25/share ($2500 after adding a few dollars for the certificate) worth $60,000. If you actually retained ownership of the stock itself, without consideration for any stock splits or anything else, the shares themselves would be worth $53,259 (value as of May 18 at 12:00pm PST). You can retain ownership of a stock and sell the actual certificate so your initial investment with physical shares is suddenly ~$113,259. Yes, it took 30 years to make this but it’s still a VERY healthy return on your investment.

Let’s say you really don’t want to retain ownership of the shares as an investment. You buy the shares and order the physical certificates. Wait a couple months to receive the certificates, then sell the shares. Let’s say the shares have tanked and they are only worth $10 each at that point. You’ve recouped $1000 of your initial $2500 investment so you’ve lost $1500 BUT you still have 100 stock certificates which are, at this moment, worth $60,000. So your $1000 investment netted you $59,000. Best case, the share price is up and you can make a profit on the initial investment and, again, still have the actual certificates, in this case, for no investment.

People like collectibles and owning a piece of history. If you’re going to buy the stock anyways, pony up the extra couple of bucks a share (Make sure to get individual shares on each certificate rather than multiple shares on one certificate to maximize the potential future sale as people are buying the certificates themselves. There is no difference in value between a certificate that is for 1 share or 100 shares.) and have the extra potential return.

Other examples:

Pixar – IPO 1995 share price $47 – certificate value today $400 (certificate purchased in 2006 – 11 years after the IPO)
Harley-Davidson – IPO 1986 share price $11 – certificate today $210 (purchased in 1999 – 13 years after the IPO)

My guess is that a certificate purchased on (or near) the actual IPO date would be worth more to a collector in the future (as in the Apple stock certificate example). I also believe that the initial stock shares will be signed by Mark Zuckerberg based on similar past IPO certificates.

Of course there’s never any guarantee that the certificate will be worth anything in the future and this is certainly a long term investment whether you keep the shares AND the certificates or just the certificates. Whichever you decide to do, there’s more POTENTIAL in having the certificates then in not having them. In addition, due to the high demand for the stock itself, I don’t believe Facebook will be offering paper certificates for very long so you could have a narrow window to take advantage of this.

Most stock certificates won’t sell like this, of course. The examples I use are exceptions but I believe Facebook will fall into this category. If an old AOL floppy disc (that were everywhere “back in the day” and that they mailed to everyone once a week, it seemed) can sell for almost $10,000 on eBay… well, you get my point.

Either way, in my opinion, it’s kind of cool to own a piece of history.

Do Consumers Want It To Take All Day To Buy A Car?

Posted on May 14, 2012 by Arnold Tijerina

I answered a question posed on Quora about 6 months ago. The question was:

Why does it take so long at a dealership to buy a new car?

“Once the price is agreed on, the loan or lease is approved and they have your down payment, why do new car dealerships drag the car buying process out by making you talk to sales managers, account managers, loan managers, etc. etc. and have you sit and wait for their people to sign paperwork. Used car dealers don’t seem to do this. Why is buying or leasing a new car a multi-hour inconvenience for the customer?”

My answer was as follows:

“In many cases, it only has to do with the inefficiency which that dealership is run. Typically, all these people are talking to you so that you don’t get upset for the wait so they’re just trying to keep you busy. They may also be waiting for a response from banks about the loan (keep in mind that many sales managers base the interest rate on their knowledge of what the banks will “probably” give you and not until a deal is accepted do they actually input all of your information and send it to the bank for an official approval. Whether they do this will depend on your credit.) They also have to get the vehicle ready for you to take delivery. This entails a thorough washing and detailing as well as putting gas in the vehicle. The finance manager has to get all the paperwork ready for you as well. There are many factors that could be a reason why you have to wait BUT many dealerships nowadays have made the process more efficient for customers as they know that many people feel like you so they are making their processes more efficient so that your experience is more pleasant.”

A new answer was posted a couple of days ago that floored me:

“I feel your pain… but unfortunately I think most people like the fact that it takes so long, and that’s part of why dealerships continue to do so.

Buying a brand new car is a big deal and has huge significance economically and, more importantly, culturally. I don’t think most new car buyers would be happy if it was as simple as swiping their credit card at the grocery store (though I would be) because they might have buyers remorse immediately after… things wouldn’t add up… this is such a huge deal, why didn’t it feel like it?

By taking all day, and exhausting you, I think they lessen the chances that you will change your mind or be unhappy with the purchase… because it’s going to feel like you just ran a marathon… and no one will walk away feeling like their big day wasn’t just that.

Also they love having you in the dealership all day, it’s the perfect way to maximize their chances of selling you add-ons with your purchase and have you look at your next dream car.”

It certainly wasn’t an answer I was expecting. (The person who answered is a mechanic but it’s unclear whether he’s an independent or at a dealership.) Personally, I always wanted to complete a transaction as quickly as possible (both when I was on the floor and while in the internet department) and had no interest in being tied up with one customer all day. It never crossed my mind that a consumer may actually want it to take all day to complete the transaction.

Do you think there’s any merit to his theory that consumers WANT (or NEED) to take all day buying a car to emotionally satisfy their large purchase?

How to: Spam People on Facebook

Posted on April 23, 2012 by Arnold Tijerina

Social media is all about engagement. The option to “friend” someone or “like” a business’ page exists to enhance the user’s experience and present to them only what they have chosen to see and engage with. If you choose not to engage with someone, you simply don’t accept their friend request. YOU choose which business’ Facebook page you are interested in having information delivered to you.

Imagine if Facebook were completely open. “Friends” didn’t exist. You saw every status update from every person on Facebook and every business. Facebook would cease to exist except maybe as a search engine. There would be too much noise. Facebook even recognizes this by filtering status updates for you and providing you with the option to create lists of people so that you can not only tailor who sees any particular piece of content but so you can easily filter out status updates and content into subgroups of your friends.

Then came Facebook groups. Initially, I thought this was a splendid idea. The ability to create an open or private group of individuals who share like interests and who can interact with each other without having to “friend” any group member. It offered a convenient way of sharing via a group Facebook e-mail address and, at the time, it was one of the only noise-reduction alternatives on Facebook.

Facebook groups has now become a convenient way to spam people in your social network against their permission. The ability to add people to groups without their consent has become not only a nuisance but, I believe, has actually decreased the value and allure of groups. I cringe whenever people add me to a Facebook group because 1) it irritates me that people can be presumptuous enough to choose what I’m interested in seeing and 2) because Facebook in their infinite wisdom chose to make the default notifications via e-mail on.

I belong to several Facebook groups. The groups I belong to are through my choice and consist of people and content I am interested in. I can’t belong to every group in existence, nor do I want to. Imagine if businesses could choose whether you liked their page or not. There would be many businesses who would just add everyone on Facebook and leave it up to each person to unlike it.

To compound matters, there are some people who will not only add me to a group, but after I LEAVE the group, will RE-ADD me.

It’s presumptuous and arrogant to take it upon yourself to decide for others where their interests lie. By doing this, you make yourself no different than the person who decided everyone you know could benefit from Viagra.

… and there’s a word for people who do that: spammer.

NADA 2012: Day Four Recap – Final Day

Posted on February 9, 2012 by Arnold Tijerina

By Day 4 of NADA, I was totally wiped. Between walking the exhibit hall, networking, and night-time adventures, I didn’t have a lot of gas left.

Day 4 in the exhibit hall had me looking for some cool swag for my daughter. Not many booths had “kid” swag (lighty-blinky things, etc. A lot of footballs but not much else). In my treasure hunt, I managed to get a caricature done courtesy of Jack Behar and the VisuallyLinked booth, a DealerTrack 1/24 scale die-cast car, some autographs with Playmates at the Aspen Marketing booth and more.

I managed to make it until I won this huge bear from the CUDL booth:

Walking around the exhibit hall with that huge bear got me a mixture of strange looks, smiles, queries as to how I was getting it home (I drove) and monetary offers but I was taking this home to my 5-year old daughter. (Man, was I a hero when I got home.) In the end, at about 2:30, I had to go back to my hotel room just to drop this off. I took a load off my feet and **BAM** I was out. I woke up right as former President George W. Bush was speaking. I was bummed to miss that.

I was invited to dinner with 3Birds Marketing that evening and we went to a delicious Thai restaurant. Afterwards, I needed to make a stop at the Caesars Palace Forum Shops. As the store closed its doors, they allowed someone in to shop privately. It happened to be Floyd Mayweather Jr.!! It was him and I, the store employees and his bodyguards (although I dont know why he needs bodyguards). Got to say “Hi” to him but I succeeded in restraining myself in asking for a picture with him.

After that, it was off to the Imperial Palace Karaoke Club. I typically visit at least once every time I’m in Vegas and it so happened that, earlier that day, Shaun Raines of DrivingSales tweeted out an impromptu industry karaoke party. Some of the 3Birds Marketing crew were there as were some ReachLocal people. It was a blast, as always. Rob Fontano KILLED the songs he sang. Dude even had a freakin’ harmonica in his pocket and played it during his songs. Are you kidding me?!?! I’ve NEVER seen someone whip out a harmonica during karaoke. Check it out:

Then, Shaun stepped up and did a duet with the DJ:

Great people. Good times.

To summarize, this NADA was the best experience I’ve had at a conference and the first major industry event in the last couple of years in which I wasn’t working in some way or another. Between all the celebrities, events, parties, swag, gifts from heaven, networking, and sessions…. I sincerely felt charmed the whole time. Thank you to NADA, God, the Lucky Charms leprechaun, and all those that made this convention so wonderful for me.

If you’d like to see some of the pictures I took (102 on display), you can view them HERE.

Oh, and remember that eBay Motors party I told you about in my Day Two Recap? I’ll leave you with some ice, ice, baby.

NADA 2012: Day Three Recap

Posted on February 6, 2012 by Arnold Tijerina

Sunday saw a lot of meetings, and running into (and trying to connect with) people. The exhibit hall was in full swing and jumping. The day was destined to be short because the Super Bowl started at 3:30pm here and all the parties were starting at 2:30pm.

We went to what, in my opinion, was the best Super Bowl party ever! eBay Motors set up the classiest, most intimate Super Bowl party I’ve ever been to. It was so classy celebrities were asking to come just so they could have a place to watch out of the general public. Not only that but all of them were super nice. They rented out the whole Seville Row ~~bar~~ ~~restaurant~~… hell, I don’t even know what it was. It was a private area that is part of the LAX nightclub. Max capacity was only 125 people. Every place to sit was a freaking couch VIP area. Lots of room. Great wait service with an open bar and lots of great food. We even had home-made cupcakes made, and hand-delivered, by Robyn and Taryn of The Food Network’s Cupcake Wars TV show.

I met Roy “Big Country” Nelson from the UFC as well as Greg Hendrick who is the Director of Event Operations for the UFC. I also met Coolio .. yeah.. that one. We were living in Gangsta’s paradise. Roy Nelson joined us at our table for a while as did the girls from Cupcake Wars. Lots of great conversation (and pictures). Oh, and Coolio gave me his cell phone number and the club manager gave me a UFC t-shirt and an autographed Roy Nelson action figure. Yeah, that’s how I roll. Talk about making connections, how is a partnership with the UFC for digital marketing and social media sound? Money, baby. That was only one of many connections that I, and people I know, made.

eBay Motors delivered a first-class Super Bowl experience. I couldn’t have improved it in any way. In my, and other people’s, opinions, they pulled off both the best party of NADA (Vanilla Ice) and the best SuperBowl party of NADA.

After that party, we headed to the DealerTrack party at the XS nightclub. We got there and, swear to God, the line looked like people were at Disneyland waiting to ride Space Mountain. Serious.

That party was OFF THE HOOK. HUGE place, great layout and tons of people. You could party inside or by the pool. Nice. Well played, DealerTrack.

After DealerTrack, it was off to a nice dinner then bed. Brilliant day at NADA.

It was so brilliant, this is what I felt like at the end of the day: