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Thursday, February 2, 2012

Will Facebook shares be a good investment? Money managers, analysts weigh in on IPO

http://www.washingtonpost.com/business/technology/will-facebook-shares-be-a-good-investment-money-managers-analysts-weigh-in-on-ipo/2012/02/02/gIQAxCmhjQ_story.html

“If you can own the stock for an intermediate term, I suspect you will make money. Remember, when Google went public, the stock was valued at roughly $27 billion in 2003. It reached almost $200 billion by 2007. With Facebook, you have a very high growth, early stage company that has a profitability model that will be very similar to Google’s.” - CHRISTOPHER BAGGINI, senior portfolio manager, Turner Titan mutual fund

My opinion: if for some reason you can get in early, get in. The stock will be overpriced, like Google is, but demand for the stock will protect your investment from actual real life events. Facebook does offer a real and valuable product, our information, to very rich consumers: marketers. That is worth about $3.5 billion a year right now and will grow to maybe $16 billion or so within 5 years. Facebook doesn't need to take on any real debt and there are no big capital investment projects like factories or logistics that it needs to undertake.

1 comment:

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