Are you considering buying Facebook stock at the IPO in 2012? Should you — and how would you — invest in Facebook now or in 2012? This site is the resource that we wanted to find online – but did not exist so we created it! As we continue to weigh the prospects of buying what could be the biggest IPO [initial public offering] of 2011 and 2012, we decided to post the material for others to share in the process.
Thinking about any stock or investment, for individual investors, the real question is whether Facebook will be a viable company for years to come? Will it grow its revenues and profits, and stay competitive in social media? Will it maintain its importance in connecting people together and will it monetize that traffic in an effective way to warrant the valuation? IPOs often signal that capital markets are getting healthier, so will the initial public offering of Facebook stock mean that there will be growth again in the American economy?
Using the categories inspired by legendary guru investor John Neff, of Vanguard Windsor fame, it’s often wise to look at growth through the prism of these categories: Recognized Growth, Less Recognized Growth, Moderate Growth, Cyclical Growth, or stay in Cash (or cash equivalents). If you apply this to Facebook, some would caution a new tech/web bubble is brewing with the IPOs of LinkedIN (ticker symbol: LNKD), Pandora (ticker symbol: P), and others not doing so well through the summer and fall of 2011. So perhaps Facebook coming to market as a publicly traded stock is a warning that their rapid growth cycle is over — that it means that the CEO and others are eager want to lock in some profits from stock options and incentives. “Cash out near the top” – as they say…
Or maybe Facebook’s real growth is ahead of it. Perhaps the stock is more of an incentive to attract and keep the best talent – to acquire other companies, and to grow in a number of interesting ways that maintain the social media dominance but add more to their bottom line. Perhaps retention is the main reason that it’s time for Facebook to go public. [Yes other than they may HAVE TO -- 500+ shareholders!]
These are some of the considerations we’ll explore here. Is the Facebook IPO a worthy investment, a great trading possibility, a chance for a number of options strategies — once Facebook has calls and puts available — or is it a volatile danger stock to avoid? Is the small float, the valuation, the post-recession US economy, the competition for revenues with Google (ticker symbol: GOOG), YouTube (owned by GOOG), Apple (ticker symbol: AAPL), Microsoft (ticker symbol: MSFT), and others — too much competition for robust profit growth in Facebook? We hope you’ll check back here to watch the growth of this site. (PLEASE NOTE: We have no affiliation with Facebook, its underwriters, or any part of the IPO process – this website is for informational/entertainment/educational purposes only for the benefit of individual investors — like us!, so be sure to do your own research and consult your own advisors, tax professionals, and financial advisors before committing any risk capital to any investment.)
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- Welcome to our new site SHOULD I BUY FACEBOOK IPO: Thanks for visiting our discussion about what should be the biggest IPO of 2012, and of the last few years. Is the highly anticipated initial public offering of Facebook a great opportunity for individual investors, or is it a trap of overvaluation? Please enjoy the content here, feel free to share and comment, but then please do your own individual research and consult your own advisors before you commit any risk capital to any investment, including an IPO. Please sign up for our email list!