Facebook Stock Price
Buy, Sell or Hold: When to Buy Shares of Facebook
You might have heard....
Facebook Inc. (NYSE: FB) is the most awaited initial public offering (IPO) since Google Inc. (Nasdaq: GOOG).
The recent registration of the company's IPO documents means it won't be long until Facebook shares begin trading freely.
But will Facebook shares make you rich beyond your wildest dreams like mural painter David Choe?
Or would you be better off watching from the sidelines before you buy shares of the social media giant?
The Details behind the Facebook IPOHere's what I've learned from Facebook's S-1.
Some of the data points buried in the IPO document are eye-opening, to say the least.
Chief among those are Facebook's assertion that 6% to 7% of the entire world population logs in every day. More importantly, they stay logged in for a significant amount of time.
However, what will happen in the future to drive the stock's share price after it's brought to market is buried deeper in the details.
It's these details that make Facebook's IPO a hold if you already own shares, but also a "wait to buy" if you are like most people and want to own them.
In a nutshell, what I've learned is the banks are bringing Facebook to market fully priced.
My opinion is the bankers have gotten greedy and decided to push the valuation numbers above the levels that I believe are sustainable.
The company is being valued at $75 billion - $100 billion dollars at launch. This would make it one of the most valuable companies in the world, yet its actual revenue, let alone profitability, is at a more mundane level.
Currently, Facebook is reporting about $4 billion in revenue and profits of $1 billion.
That means if Facebook prices in at the top of its estimated range ($100 billion), based on current disclosures it would have a 100-to-1 price to earnings (P/E) ratio.
In other words, it's only going to take about 100 years for Facebook to eventually earn what it may price at. Compared to other blockbuster stocks, that's quite rich.
By comparison, Apple Inc. (Nasdaq: AAPL) has $100 billion in cash and a P/E ratio of 11 while Google's P/E is 20.
That's why it's time to "Hold" Facebook (**) or wait to buy it until insiders get a chance to sell their shares and bring the price down to levels common people can realistically afford to purchase.
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NYSE: FB vs. Nasdaq: FB, And the Other Big Facebook IPO Questions
Investors were on high alert today (Wednesday) for a Facebook IPO, which has rumored to reserve both NYSE: FB and Nasdaq: FB as possible ticker symbols.
A New York Post article reported the two listing companies were in "hot debate" for Facebook.
"Facebook won't significantly change the listing revenues for these companies but there could be a real halo effect wherein other companies decided to list with whichever wins Facebook," Larry Tabb, founder of capital markets advisory firm Tabb Group, told The Post.
Besides the ticker, the biggest questions on investors' minds include:
How much does Facebook want to raise? The latest rumors say the filing will set a preliminary goal of $5 billion, which can be raised if enough investor interest is shown.
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Facebook IPO: Where's the Love, Mark Zuckerberg?
The long-awaited Facebook IPO is finally arriving - and it's time for Mark Zuckerberg to share the love.
But most of Facebook's 800 million users won't get a chance to grab a piece of the multibillion-dollar deal.
Instead, the shares will be reserved for the wealthiest investors, not the loyal users who have fueled Zuckerberg's rise to riches.
Before Facebook, Zuckererg was just a college student....
Today, Zuckerberg's net worth is $17.5 billion and he's ranked No. 52 on the Forbes list of billionaires - No. 22 in the United States - and No. 9 on the Forbes list of powerful people.
"Zuckerberg made history with Facebook - and now he's the king of social media and social networking - the man with the Midas touch," said Money Morning Capital Waves Strategist Shah Gilani. "But now it's time for him to give some of the gold that he's earned as the head of Facebook back to the people who helped make that happen. They're the ones who have brought his company to the forefront. They're the ones who should be participating in this."
So, how could Zuckerberg use the Facebook IPO to give back to those who've helped him become an Internet legend?
Gilani has a plan for that...
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Before You Get Excited About the Facebook IPO…
For more than a year there has been rampant speculation about a Facebook IPO, and now it finally appears as though one is on the way.
The social media giant could file papers for an initial public offering as soon as Wednesday, according to a report from The Wall Street Journal. The company is looking at a deal that would value the social media giant between $75 billion and $100 billion, the WSJ reported, making it one of the biggest in U.S. history.
Scott Sweet of IPO Boutique told MarketWatch a Facebook IPO will likely lead to "pandemonium."
"It's absolutely massive," Sweet said in an interview. "The mere drop of a hint will cause pandemonium."
Facebook is looking to raise as much as $10 billion, which would make it the fourth-largest U.S. IPO behind Visa Inc. (NYSE: V), General Motors Co. (NYSE: GM), and AT&T Wireless. A $100 billion valuation would make Facebook worth as much as global powerhouse McDonald's Corp. (NYSE: MCD).
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