Will we actually be able to buy FB?
Or will they all get snapped up in an instant?
I don't view it a good investment, but buying as they appear and selling the same day is tempting.
Facebook has filed its initial documents for the most anticipated social networking IPO of the current bubble, surprising some with a lowish estimate of $77bn to $96bn for the company. Shares in the company will be traded under the moniker of FB and are expected to go for between $28 and $35 a share, with an initial stake of …
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The trouble is, a considerable portion of the other buyers will be doing the same thing. And a lot of those investors will have a great deal more money than you. Basically you're relying on your ability to judge things better than other people. Like a flock of birds all turning suddenly with you trying not to be the last to move. You don't have to be better than everyone else, you don't even have to be better than 50%, but you'd better make sure you're not much below.
If you think about it mathematically, what you have is a lot of people all throwing money into the pot and all thinking they'll be able to leave with more of it than they put in. Not everyone can be right. What makes you think you know better? Keep in mind that as a smaller investor, for you it entirely comes down to being able to judge when the flock begins to turn. The bigger players, they get to vote on when it turns by virtue of their decisions being noticeable in effect. And they know this.It's not strictly gambling as someone else said, it's just very risky. Risk and gambling are not the same things. Roulette and sky-diving are both risky, but only one is gambling.
Of course the above is only true for investors who are seeking to make money by buying low and selling high. There is another type of investor: those that buy to get dividends from an ongoing and profitable business. However, I leave it as an exercise for others to guess which sort of investor Facebook will appeal to most.
(Note: the putting money in a pot analogy is simplified because in the real situation, the pot exists over a long period of time with many exchanges and new people appearing all the time. The principle is roughly the same.)
Can someone just clarify how it is possible that a single private entity can be worth $14 per person (including every man, woman and child in every developed, developing and 3rd world country)?
I thought a good rule of thumb used to be that a company should be valued at about what it's expected to make in profit over the next 10 years.
It can't be. But that's not the point. Witness the people who clearly have more money than sense all working themselves into a frenzy hoping that they can make a quick buck by buying the stock, then flogging it shortly after for a profit to the next frenzied hopeful. They all feed of each others greed-lust until.... well, those that have been paying attention over the past decade and a half know how it ends. Those that have short memories; feel free to join the stampede, just don't be left holding the parcel when the music stops!
Everything in my being says this is bad and wrong, and over priced etc.
there is only 1 spark in me that thinks otherwise, and thats the fact we all thought the same about google, and oh were we wrong.... i guess, if FB started branching out like google did, using all that cash for real new dev, then maybe, just maybe it will all work out. (with an extra 13bn i guess you have RnD cash available) the only difference again tho is Google at least has a good revenue stream from advertising etc. FB ive never got the model, data is worth...?!?
im keeping this at arms length, i hope my pension is not investing in this over priced hog that will be dead as soon as the next fad comes along..!