Thursday, May 17, 2012

Thoughts on Facebook IPO

Facebook's upcoming and highly anticipated IPO is coming out tomorrow. It's probably the most anticipated IPO of all time I daresay. Lots of unnecessary hype if you ask me.


Last I checked, they wanted to value the company at 100+ billion. I mean, really? It's outrageous. Some of the biggest companies with a proven history are valued much less at an IPO. But hey, value doesn't really stop an IPO from doubling in a few days, LinkedIn anyone?


As I stated in my earlier posts, the entire market is not looking good, with concerns from Greece, Spain, and China slowing down, we're facing a big correction in the broad market. So why would FB be spared the whipping? Some people are thinking that we've been selling off to raise cash for FB, but no, we're not.

Probable Fate

In my opinion, because Facebook is such a big and highly anticipated company, this IPO will do well. Many investors are probably thinking that this is the new AAPL. Some may argue that FB will be no different from GRPN, but no, GRPN was wrongly valued, AND it was a small and weak company. Facebook is wrongly valued, yes, but it is a giant in the tech industry. My outlook: Successful IPO.

Bottom line is, playing an IPO like this is like playing in Vegas. Or if you're a big risk taker, russian roulette.

Disclaimer: Buying 1 share tomorrow at the open.

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