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As most of you know, Facebook (FB) stock will IPO on May 18, 2012 and open for trading sometime in the morning.  Do we buy the Facebook (FB) IPO when it opens for trading or sell the hype?  Here are some common answers to a few questions I received recently.  Live chat -

How do I buy the Facebook (FB) IPO?

Facebook (FB) stock will begin trading on Friday, May 18, 2012.  Most retail investors ( small mom and pop investors aka, the average Joe or Sally ) will not be able to call their broker up and buy FB stock at the set price point on May 17, 2012.  I would bet that 85-90% of Facebook (FB) shares will be allocated to institutional investors or the " big players " on Wall St. who have big accounts with Morgan Stanley, Goldman Sachs, ect.  The only way for small investors to buy the Facebook (FB) IPO will be to buy the stock when it opens up at a huge premium to the set pricing.

Okay, what is the current Facebook (FB) IPO Price Point?

Facebook (FB) stock is indicated to price between $28-$35 after the close on 5/17/12.  However, I could see this range moving up 10% and Facebook pricing at $38-$40 which would be the high end of the range.  The demand for this stock will be like nothing we've ever seen before.  Everyone seems to want a piece of the on the other hand, I will pass on the deal. (*** Update - Facebook (FB) stock prices at $38 *** )

What time will Facebook (FB) Stock IPO Open for Trading on Friday?

Since Facebook is listing their initial public offering on the NASDAQ, there will be a considerable delay.  I would guess that the Facebook (FB) IPO will begin trading between 11am - 11:45am EST.  Google (GOOG) was the same back when it IPO'd in the mid 2000's.

How would you compare the Google (GOOG) IPO to the Facebook (FB) IPO?

When Google (GOOG) came public, it was a much smaller company.  There was still a massive amount of growth ahead of it.  Facebook (FB) on the other hand is coming public as a large developed company with not as much growth because the company already had the huge growth spurt.   Mobile is going to be a huge roadblock for will they monetize that?  Do you click on mobile ads?  I don't!

Should I buy stock in the Facebook (FB) IPO?

No, If you are thinking about buying the Facebook (FB) IPO as an investment, I would wait at least 6 months for the lockup expiration to come.  When the Facebook (FB) lockup period ends, insiders have a chance to sell their stock.  This event usually creates a buying opportunity as major investors sell ahead of the lockup.  LinkedIn (LNKD) provided a buying opportunity and countless other stock as well.

If you plan to trade the Facebook (FB) IPO, just set tight stops and have fun.  You can trade any stock as long as you have an exit point before you go into the trade.

Final thoughts:

While I may try to buy Facebook (FB) stock for a quick trade, I think you would be crazy to buy and hold Facebook stock given the valuation.  FB will be expensive and there are so many unknowns about their growth potential.  Why not buy Apple (AAPL), the best company in the world, for 11 times earnings and has $110 Billion in the bank.  The company also pays a dividend.

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Europe pre market has Facebook at 58? 

Honestly as I and I think it was Danny that said if you did not have a minimum 100k to toss at FB you were wasting your time,,,and guess what I was wrong,,even a 100k was not sufficient to reap any profits unless you bought the dips in 38$ range and rode up on the dip to the weak low 41$`s.

Imagine I posted a good video in the general market thread check it out of the manipulation today in Facebook 

The next time you elite traders want to bash about any pump and dump stock please refer back to FB say the least historic,classic,epic pump n dump in stock market history.

Now go and try to explain that to the average investor...the ball is your court.

Imagine it's easy to understand:

The Market Maker task is to keep the market level "stable", so with today FB IPO , FB Stock have to much volume on Nasdaq market if the stock has go up no problem, all others stock have followed.

Since the FB IPO was a TOTAL mess, the stock goes lower instead of higher... So the entire market was going DOWN DOWN DOWN lie a big rock following the exceptional volume of FB IPO.

So the MM (MrktMaker) keep a lot of money to sustain the stock at 38.00 for 2 main reason:

First Keep the other stock safe of tanking with FB (It was the worst session today in 2012), if FB had gone below 38 down to 34-35 it was like a mini-crash on the market. So it's not a secret or manipulation, it's the task of the MM to "regulate" the market to be "fair" to "everybody" in that kind of situation...

Second: If FB IPO closing price was going under opening price, all confidence in future IPO were lost for investor, cause FB was supposed to be the BIG One ;-) ! So a "little manipulation" but a lot more protection against a mini-crash and panic sale of all stocks.

The MM act always as a regulator to keep the thing "neutral", this time one of the errors was to much money (FB IPO)  at one time with noi real valuation, nothing of that had happened if the stock has go UP....  But it was the worst IPO of all Time for me.

I hope my explanation was clear.

Regards :)

Who exactly are you referring to Imagine? Who are the elite traders? Who is bashing? You seem to have a lot of pent up anger towards some on this site. Even though I don't venture into the OTC area I know you work your tail off to do your research and help others on this site and it appears you and those that follow you do very well. 

Mikoul and Rhee both make valid points and I do not need to reiterate them.

Personally I agree the Facebook (FB) IPO was a debacle and a travesty whichever way you look at it but I can wrap my head around this more than I can wrap my head the OTC arena where you have access to limited financial information. This IPO was hyped and covered from head to toe and everything (right and wrong)  that went on was pretty obvious and transparent. I would also think the average investor could see the manipulation that went on at  $38.00 and even though they probably do not agree with it could l understand the concept.

What? YOU lost me...but anyway it is what it is.Best of luck to all.

The point I was trying to make is that this site is not comprised of bashers and pumpers so I did not get where you were coming from with that. That is the only issue I had. Otherwise you were spot on that the Facebook (FB) IPO was a freak show.

Mikhoul, that is a very nice and insightful little analysis. Imagine, when it comes to IPOs, I actually would compare them to high betas or pennies in the sense that it is hard to rely on either fundamentals or technicals, as there is not enough data to rely on. They behave irrationally off of high volume, speculation (countless often partially unsubstantiated new editorials), and manipulation. And, often the high of day on Day 1 is dangerously right off the open. So, I agree. But I am not sure what your point is, as two wrongs do not amount to a right. It is not a matter of "bashing"; it is a matter of presenting the risks in a balanced manner to mitigate the hype so novice traders can make informed decisions, and plan accordingly, prior to putting in their bids.

Furthermore, comparing FB to a penny stock has its immediate limits. FB is an actual company with actual revenue over $1 billion/year. I mean, Bono's own stake in the company is worth $1.5 billion alone, after the IPO. The stock (which I myself presently have no interest in) will climb over time off its bottom, wherever that is established, just like LNKD. As for its long-term forecast, that might be mixed. On the other hand, an OTC or pink is valued at pennies or less for a reason. The "company" does not generate revenue. There is little financial info available to the public; they have no minimum standards to remain on the exchange; and they have little liquidity.

If Morgan Stanley was buying all those shares then they placed a huge bet on Facebook. Basically just to avoid embarrassment as the underwriter that kept raising the price.  We won't know for sure but either way the ipo was chaotic to say the least. 

No my point was simple: Just ot explain how it work behind the "glamour" ...

If you know "the rules" you can make a better choice.

Since I've learn the role of the MM in the market, I can make smarter decision.

Over that about FB it's just my humble opinion about the stock/company, I can't see personally how they can make enough money to justify $38 with 100X P/E ratio  IMHO.

I agree with a press review analyst that said: IPO in the past was to bring money to company, and today IPO are to bring money to OWNER of the company, cause without an IPO  you just have "number" no real $$$ in your pocket ;-) but it's just a point of view and I read others but I tend to agree with this one...


Would you pay for Facebook? Does Zuckerberg want to give it a shot? 

From the BBC:

Facebook tests 'pay to promote post' tool

By paying a small fee users can ensure that information they post on the social network is more visible to friends, family and colleagues.


The tests are being carried out among the social network’s users in New Zealand.


Facebook said the goal was to see if users were interested in paying to flag up their information.


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