The FACEBOOK IPO, and how you can profit....

[hakrjak]

According to this article, the 2012 IPO of Facebook will be the biggest deal ever seen in the history of IPO's. It's going to create over 1,000 new employee-millionaires inside of Facebook, and countless other millionaires who invest in the company stock:

Facebook IPO sparks dreams of riches, adventure - Yahoo! News

The question is -- How can we profit? I've read countless articles about how to invest in Facebook even if you can't get ahold of pre-ipo stock (Which is going to be 99% of us, sadly), but the best suggestions I've seen so far are things like buying Microsoft Stock (They own 1.6% of Facebook apparently), or Goldman Sachs stock (They are underwriting the IPO), or an obscure Russian internet company that may own 2% of the company, etc...

Anybody here have any good ideas on how to profit from the Facebook IPO besides just wading in on day 1 and buying the stock after it's already tripled in value?

Cheers,

- Hakrjak

 

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[rocksolid]

How about getting a job with them and making sure stock options are part of the deal. :smug2:

 

[ElToro]

If Facebook comes in at the 100 Billion market cap that is expected you are better off looking elsewhere for return or take Rocksolids advice....See the valuations of other tech stars, ipo vs current, and you will see that the public will miss out on tons of return...

Google - IPO valuation was 23 Billion, today it is 203 Billion
EBay - IPO valuation was 2 Billion, today it is 40 Billion
Amazon - IPO valuation was 441 Million today it is 88 Billion, <-----this is what you are looking for and will miss
Cisco - IPO Valuation was 279 Million, today it is 101Billion
Qualcomm - IPO Valuation was 412 Million, today it is 92 Billion

You get the picture, in order for Facebook to generate a similar return as the above IPO's it will have a astronomical valuation.

Here is a good read on its valuation....Valuation Preview: Is Facebook Worth $100 Billion? - Seeking Alpha

-ElToro

 

[rc08234]

This is just my opinion but when EVERYONE buys-it means sell. The second that 1,000 new employee-millionaires are able to dump the stock, they will. Who knows what the time frame is though. A stock goes does from a lack of buyers, not because of sellers. After everyone buys it, there is no one left to buy it. The stock stops going up and eventually drifts down.

The stock market isn't made for alot of people to rich, its made for the select few to get rich by taking money from alot of people. The rich get rich by slaughtering the herd. The heard has been told for years how much facebook is worth blah blah blah and everyone is going to want a piece of it.

 

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[hakrjak]

You can say the same thing about Google.... I knew a lot of people on boards including me saying there was no way in hell it was worth $100 a share, and it would surely go down. But the fact remains even if you bought it on the open market on day 1 and held it until now, you made $500/share. It turned out to be one of the most solid stocks to own over the last 7 yrs.

 

[Pinnacle]

Forget the Facebook IPO. Just build your own Facebook (not literally build another social network, but a fastlane business of its scale). Considering we are all Fastlane students, it would be much easier that way.

Find a way to sell shares, not buy them.

 

[77startup]

Wait for the options to come out, play the swings.

 

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[chudnovsky]

I read this a while ago, you might find it helpful

6 Ways to Buy Shares of Facebook before the IPO

 

[hakrjak]

Time to post an update to this thread. I decided that I would go ahead and buy stock in LinkedIn.com as a gateway to getting a piece of the action on the Facebook IPO. It's not going to be as sweet as being an accredited investor and getting gifted a $10million profit on day 1, but I imagine that if Facebook is the hot IPO of the decade, then LinkedIn will benefit by being the other major player in the industry. Small bet, huge possibility for upside -- so I'm rolling the dice.

Cheers,

- Hakrjak

 

[kurtyordy]

another option is GSVC which invests in pre IPO comapanies.

 

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[kahem89]

Tech stocks = Lotto

You don't wanna end up as owner of a new "my space"

 

[Pete799p]

For a short term gain I might play this. I am thinking an option or spread trade. Need to do some more research about the linkin options liquidity.

 

[socaldude]

Facebook is a great company but i am skeptical at the valuation. Sure it might skyrocket on the first day of trading, thats a good possibility. But remember "the market is a voting machine in the short term and a weighing machine in the long term".

 

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[Jake]

Wait for everyone to pile in and then short it

 

[hakrjak]

If you only play value trades, I understand waiting. If you also dabble in speculative trades based on other factors, then you'll miss most of the upside by waiting.

I missed several of these big moves in the late 90's, so am going as much on gut as anything. Don't want to miss another one.

 

[hakrjak]

LNKD (Linked In) has been a great stock to own to capitalize on the Facebook hype so far. I'm widening my scope, and buying SOCL which is an ETF that covers all of the social networking stocks. My bet is that these stocks will spike leading up to the Facebook IPO, and you'll be able to dump it a few days prior for good profits before the fund goes liquid and people take cash out to buy Facebook directly.

Cheers,

- Hakrjak

 

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[hakrjak]

I thought I was doing great today when I sold my LNKD stock for a 7.33% gain in 1 day, and still am holding my SOCL ETF for another nice gain. Then I looked at ZYNGA stock, and about crapped my pants. Up 17% in a single day right now!

Yes folks, I'd say that the next tech bubble has absolutely started!

 

[hakrjak]

A lot of money has been made on LinkedIn so far. Now the question is: is it time to jump to Zynga? With growth on par with Facebook, and earnings coming on Tuesday - could we see a huge pop by Tuesday night? I'm placing a small bet that good earnings and close ties to FB will have this stock at $20 before the IPO. We haven't even begun to experience the hysteria yet it seems, with a LOT of money still on the sidelines waiting to come in.