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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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Priced at 38$. Gonna be tough

It's not the gut's it's the reason...

Anybody that have npot the stock at the IPO price of 38 and but it at the market price between 10am and 12am should afford to loose it's money, it's pure speculation, gambling, I'm a day trader and I will not buy FB stock for more than few hours when I will be able to read on a chart how it move.

The reason why I use ZNGA ( over than not being able to have it at IPO price) is that I will have ZNGA at the lower price and will profit of the FB pop.

No institution will buy FB over $38.. it will be "dumb money" that will make it rise not smart money.


why is znga drops 13% today. 

Any thoughts on shorting FB after first day?

I've thought about shorting Facebook stock but I'm not sure if they will allow you to do it on IPO day.  When FB opens there will be some wild trading so that would be the time to go short I think.  Some people are predicting FB stock will open at the high and then trade lower throughout the day.  We'll see.

I'm placing a 50$ limit order. If possible they will fill it at a lower price. If I get in then I'll sell as soon as it tops. Hope I don't MESS up here but I feel comfortable with it. Hope to be back in all cash by close.

Kevin good luck buddy be careful. Im not sure yet what im doing

I'll be just watching, good luck to anyone who decides to trade it.

Kirk you play for Metallica? lol

Just added Facebook to my cnbc stock list on the app. I'm excited 

HAHA, yeah I do :D

huge fan, honored to be trading stocks along with you :)


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