I did promise in my last post that I would share advice on how to take advantage of the Facebook IPO that is going to create a lot of wealth and take the recent tech bubble to a very high level. From what I have been learning it is the venture capitalists who invested in Facebook, its founders and employees even the rank and file employees who will make the most of out of this IPO.
The Facebook IPO is anticipated to make at least a thousand people millionaires. A lot of these employees are already cashing out by selling their stock options and shares on private exchanges such as SecondMarket and SharesPost and I think it would be best to buy the stock options from these exchanges and get ready for the IPO in May.
The problem is that stock analysts seem to agree that Facebook’s share price will be overvalued and the figure that is being widely discussed as the stock price of Facebook will be in the range of $35 to $40. There are definite risks involved in investing in Facebook stock as there is always the possibility that it could become like MySpace or Hi5. The other issue is that it really doesn’t have any proper revenue streams and has been relying on cash from venture capitalists to prepare for the IPO.
Display advertising is great but it is not what attracts a lot of the successful investors. What is appealing about Facebook to these high profile investors is the social network’s ability to gather information about its users who aren’t really going anywhere. There are an astounding 2.7 billion “likes” and comments by users daily with a really impressive active user base of approximately 500 million.
There is a lot to love about Facebook and I think it should make for a good addition to your portfolio as this looks to me like the next Apple for all those who missed out on the rise of Apple stock.