Should you buy FB Stock?
Facebook is going public. In other words, Facebook is selling out. What does this mean? Well, it means that everyone and their mother will now own a piece of Facebook and it’s possible that Mark Zuckerberg will lose the control of the company. It’s also likely that Facebook will lose appeal to young people once more and more decisions are made by board of directors who don’t use Facebook.
Let’s try to remember what made us abandon myspace. Myspace got overrun by preteens and their stupid profile layouts. Add that to the frequent technical issues and server crashes and you get the point. Fox buying Myspace made myspace go public. And today you can login into your myspace account using Facebook.
Why am I saying this? Well I’m just pointing out how quickly a social network can collapse by many small annoyances. Death by a thousand cuts thing. My main problem with Facebook is their terrible iOS app. It’s very surprising to me that we tolerate it at all. Most of the time it is so slow it’s just not usable. Instagram on the other hand kicks so much ass. Sure these things are fixable but a lot of times when a company goes public it’s main motivation becomes money and more money. And so far they haven’t figured out how to make money from their mobile app.
“However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”
- Facebook Registration Statement
Mark Zuckerberg did acknowledge that they need to do better in mobile. We are half way through 2012 and we are still waiting for something that works.
How much will FB stock cost you?
Facebook stock opened up at $38 but don’t hold your breath you probably will not able to purchase any for a few days.
“The deal is probably not ‘fair,’ but there’s no way it can be,” said Bruce Foerster, owner of South Beach Capital Markets and former head of global equity syndicate at Lehman Brothers. “If you don’t have ties to Facebook management, if you don’t have accounts and an investment history with firms that are co-managing the deal, why should you get any stock?”
If you don’t have connections you’re shit outta luck.
One website gathers users’ predictions:
“2261 people have predicted at an average closing share price of $54 valuing Facebook at $ 135,718,802,154″
Can we learn anything from other tech companies that have gone public recently?
Huffington Post on the other hand advises not to purchase FB stock right away by giving examples of other recent companies gone public.
_ Pandora, an Internet radio company, went public June 15 at $20 a share. You could have bought the stock during the day for $26. It’s now trading under $11.
_ Groupon, the online daily deal company, priced its stock at $20 a share in its Nov. 4 IPO. The stock traded above $31 the first day. Now it’s under $13.
_ Zynga, the developer of “FarmVille” and other Facebook games, went public at $10 a share on Dec.16. The stock traded as high as $11.50 on its opening day. Lately it’s around $8.