http://dealbook.nytimes.com/2012/05/01/facebook-on-track-for-i-p-o-roadshow/?hp
Shouldd be interesting.
How in the he** can I get in on the Facebook IPO pre-secondary trading? If the IPO is $35, it will be trading at around $80-$90 by the time it reaches the secondary market. Any ideas about how a little guy can get in on the IPO action???
Tikka, are you buying FB shares? IPO or secondary trading?
Nope. Not touching this with a 30 foot pole.
zesty, you think it will ~3x within a few days of trading?
i’m with Tikka here, not a chance…
What’s you guys’ reasoning behind the yes’s and no’s?
not a proven business model asking for a valuation reserved for not even the best businesses…margins of roughly 30% is impressive, but i have seen some restaurants pull that in before…
facebooks sales was roughly $3.7billion (2011, WSJ) implying a valuation of p/s-25+…almost p/e 100X!!
i’m buy no means saying the stock price won’t go up, but if you had to own this company for a long time, i reckon you would lose money due to the exceedingly high expectation being set for the business…
its a great tool/platform, but as a money maker, its not proven…better bargains elsewhere…
i would only buy this if you can explain how revenue will somehow increase at least 10 fold over the next 5 years…even at that rate, the shares should not buldge given the roughly 100 billion valuation…
@Frank/Tikka, I’m not talking about holding this stock long term. I’m talking about getting in at the IPO price and dumping a few days later after it doubles. Just a note, Linkedin more than doubled when it started trading on the secondary market. You have to be an idiot to think that FB won’t soar when it hits the secondary market; with all the hype around it. Sometimes you have to recognize when to f*ck the fundamentals and ride the wave; this make sure you hop off before the cliff!
Back to my question, how can I get in on IPO? Are there any brokers than offer this service?
Facebook might spike on the first day, just like LinkedIn. Everyone wants to get into Social Media, and there are few stocks that let you get into this. However, by the time you manage to buy Facebook stock, the price will already have spiked, and you will be holding a stock with 99x price/earnings (200x if the price doubles).
I doubt that little guys like us can get it on the IPO. You probably need to be an existing important client of one of the managers.
Give GS or MSSB a call and tell them you’d like to participate in the IPO. Tell them you’ll even buy even lots to make it easy on them. I’m sure they’ll be receptive.
I think they’ve tried very hard to price FB correctly and if they have then it won’t soar off the bat. There will be a lot of baseless enthusiasm, so it’ll go up, but I’ll say if it opens at $35 it’ll close below $42. Nothing too wild.
@Sweep, they are pricing the IPO at $28-$35 or so; there’s no way, if the IPO is priced at $35, it will be trading at $35 in the secondary market…unless it flops like the Carlyle IPO; which I doubt
good luck to you guys…FB excites me zero…even if it goes up by 10x i won’t regret it not one bit…
A succussful IPO trades about 15% higher in the secondary market. If it doubles right away, that means FB got screwed and MSSB did a horrible job pricing the offering. Zuckerberg wants all the capital he can get his hands on. If it’s priced right, let’s say at the top end of the range - $35 - then we should see it trade about 15% higher at the close of the day.
Since it’s the most anticipated IPO of the last several years, I guess we should build in a premium. So I’ll up it to 30%. Closing price on opening day = $45.50.
@Sweep, Linkedin’s IPO was priced at $45 and it began trading in the secondary at north of $90. It doubled on it’s NYSE debut from the IPO price! I think Linkedin is a good proxy for facebook; how do you explain away the Linkedin IPO?
http://www.reuters.com/article/2011/05/19/us-linkedin-ipo-risks-idUSTRE74H0TL20110519
Frank doesn’t like making money; the cold weather up north must be getting to his brain!
@Sweep, I will conceive that the valuation is off but I’m not looking at this as a long term trade.
How do I explain it? 1999 syndrome. Overzealous retail investors. I’m sure FB will get catch a huge bid…at least for the first couple hours. Then by market close it will be somewhere around 30% higher from its IPO price.
This is the most watched IPO in years. If the investment banks, primarily Morgan Stanley, drastically underprice the IPO they’ll look like fools. It’s horrible marketing. Yes, there will be irrational exuberance by the general public, but that won’t last long. They’ll get crowded out by institutional money anyway. If the price is $70 a week later, Morgan Stanley won’t get another big IPO for years.
I know you’re talking about one-day returns though. I’m not saying it’s not easy money if you’re lucky enough to be in on the IPO…it’s going up. Let’s bet on it. First day of trading market close I say up 30% and you say…what, 100%? We’ll wait and see…
Edit: Just to put some context around it. LNKD was a $4B IPO that doubled to $8B. You’re talking about a $100B IPO going to $200B.
I expect that the stock will trade up from the IPO price. While drastic underpricing is bad, imagine if Facebook stock was overpriced and plunged on the first day. That would be 100x more embarassing for such a high profile IPO - it gives the banks incentive to price conservatively. An increase of 30% or so seems pretty realistic. The “irrational exuberance” that resulted in the 100% gain on LinkedIn is probably priced into Facebook somewhat.
Facebook IPO is gonna be a sex party. It’s gonna go up and up and up. It’s like woodstock for IPOS. Everyone is gonna wanna say they were there.
After that, I have no idea where it will go. Facebook could be a 100 billion dollar company with the right people running it. So far nobody has managed to come close to putting a dent in their armor. Google tried and frankly sucked. Google Minus!
Bchad, please document this thread…its classic…especially the sentiment surrounding getting out early…