Facebook IPO, Ya'll buying?
- Thread starter sumohax0r
- Start date
i am SO voting for you to get banned. you're wasting your time in this biz, go watch TV or something
Here is my opinion, everyone and their dog was saying Linked In's IPO was going to be over-priced and stocks would trail down to nothing, now lets look at the first two hours of their release, stocks wen't up for sale at 10am for what $94.25 and reached $102.39 at 10:30 before ending up at today's price of $86.57 per share.
I expect Facebooks IPO will see the same type of pattern, it'll start off at a price, everyone is excited and will start buying driving the stock price up, then everyone will start selling driving the price down.
The trick is to purchase the stock at the original price and sell it a half hour or hour later once it reaches it's initial peek and begins to trail down, but its really hard to judge when it'll peek, if you get rid of it too early you'll be pissed because you could of made more money if you would of hung on a little longer but then again if you hang on a little longer the price may have begun to fall already.
I expect Facebooks IPO will see the same type of pattern, it'll start off at a price, everyone is excited and will start buying driving the stock price up, then everyone will start selling driving the price down.
The trick is to purchase the stock at the original price and sell it a half hour or hour later once it reaches it's initial peek and begins to trail down, but its really hard to judge when it'll peek, if you get rid of it too early you'll be pissed because you could of made more money if you would of hung on a little longer but then again if you hang on a little longer the price may have begun to fall already.
Couldn't have said it better.
Learn to short and long stocks, use some common sense, and you don't have to worry about "bubbles", just profit from them. If you're investing enough money for it to really hurt you financially then you're doing it all wrong anyway.
Out of interest, if it's so hard to get in on these deals and more people want to get in on it - why don't they just raise the price pre-IPO? Is it just because it's a pain in the ass dealing with plebs with like $5k when you can easily find people with a couple of mill or what?
Personally I think we are probably in a bubble, but facebook has made a lot of correct moves and seems like they a). have a lot of smart people running things and b). have a shitload of data.
I'm not planning on dropping a whole heap of dough or anything, but I might put 1% of my portfolio into facebook.
The underwriters don't want to screw their institutional clients, otherwise they won't be able to raise funds for future deals.
Traditionally techs are hard to value compared to other industries because everything about their business is about technology and future growth which is hard to model.
If you looked at Linkedin, even by price to sales or there valuation metrics, it was really over priced already. The IPO price was closer to the higher end of the original valuation range. Even if the underwriters setting the price at the higher end of the range, the huge pop on the first day shows that there was so much demand they underestimated the markets appetite for these new web 2.0 IPOs.
The underwriters fucked up by leaving too much on the table, but I bet all the institutions that got on the IPO sold to the retails as soon as it started trading.
But ya underwritters allocate stock to joint book runners, and they distribute it down the food chain. Retail investors are usually at the bottom after institutions gets their demand filled unless the company specifies that a large portion is to distributed to retail investors. Brokers get institutions into the hot deals cos they can get more paybacks from other business these big boys can deliver that retail cant.
If Facebook goes IPO route it will raise big so there's plenty to go around, but buyer beware. It will not be cheap.
edit: also if they set the price too high institutions won't have much demand cos at least some of these guys do their homework. Lower demand means that can't raise as originally expected. Even if the deals goes through it will look bad for everybody involved. Worst thing on wall street besides loosing money is a bad rep from a failed deal.
If you looked at Linkedin, even by price to sales or there valuation metrics, it was really over priced already. The IPO price was closer to the higher end of the original valuation range. Even if the underwriters setting the price at the higher end of the range, the huge pop on the first day shows that there was so much demand they underestimated the markets appetite for these new web 2.0 IPOs.
The underwriters fucked up by leaving too much on the table, but I bet all the institutions that got on the IPO sold to the retails as soon as it started trading.
But ya underwritters allocate stock to joint book runners, and they distribute it down the food chain. Retail investors are usually at the bottom after institutions gets their demand filled unless the company specifies that a large portion is to distributed to retail investors. Brokers get institutions into the hot deals cos they can get more paybacks from other business these big boys can deliver that retail cant.
If Facebook goes IPO route it will raise big so there's plenty to go around, but buyer beware. It will not be cheap.
edit: also if they set the price too high institutions won't have much demand cos at least some of these guys do their homework. Lower demand means that can't raise as originally expected. Even if the deals goes through it will look bad for everybody involved. Worst thing on wall street besides loosing money is a bad rep from a failed deal.
I complete agree with you guys. Unless you have a friend who works for Goldman Sachs, Morgan Stanley, or one of the other brokerage houses/investment firms that have already invested in Facebook I would hold off.
Out of all the tech's that are looking at an IPO they are definitely the most solid company from a revenue standpoint (plus the fact that they just overtook Yahoo and now are only behind Google on display) however there is too much hype around them going public. Look at LinkedIn; they started trading at roughly $102 a share and by June 17th they were trading at $60.95 a share. That's a 41% decline in the first month alone due to hype. They are now at $85 and will probably grow from here.
It's pretty much the same with all highly publicized IPO's; people get excited and emotional when the company goes public and want to be a part of it. Be smart, wait for the initial correction then buy before it starts growing at a normal rate.