

Ask HN: Should I invest in the Facebook IPO? - pardogo


======
skrish
For every investment you make, you need to know what you would consider as a
fair return on that investment and when you would call it quits.

As an outsider watching all the action FB is not a fair price or undervalued
stock based on what they are currently delivering. So you need to know what is
your risk appetite and how long you want to stay invested.

Short term I do not see FB share providing tremendous value (except the
volatility that may be there).

Long term you need to bet on certain things they could do right and if you can
stay invested for a long time trusting that a bunch of smart folks will figure
out something of value.

how are they going to leverage their user base to venture into newer forms of
search on various new devices?

What will their mobile strategy be? Will they acquire companies, say, the
second biggest player in mobile ads space after google?

Would they venture into FB phone (may be of tremendous value considering it
fits into their social portfolio)?

So it is a lot of ifs & buts similar to any other startup investment, except
that they are not a startup anymore and they are going to have truck loads of
money to execute.

FWIW, these are points I would consider before investing in FB. :)

------
lix2333
It's always hard with tech companies because it's difficult to judge whether
or not they're being priced fairly. So much of their value is based on the
income in the future and their projected growth rate. I think at this point,
its more important to decide whether or not there's a bubble here in the tech
industry. With Groupon's lackluster results, Netflix getting killed, Pandora's
volatility, I'd be a bit wary. If things do go wrong and the bubble busts,
it'll be a long time until you can make a profit with facebook stock.

Also, the Greek debt crisis is another factor to think about. It seems like
they have come to an 'agreement', sort of, as of right now. But things are
still very much uncertain. Analysts are expecting things to smooth out, which
is reflected in the prices, but if they don't, the world economy will tank.
When it does, money will flock to the defensive stocks (consumer staples,
healthcare, utilities), and money will funnel out of the cyclical ones (tech,
heavy equipment, etc)

------
hugo31370
Most likely you won't be able to get in the IPO so the question is whether or
not you should buy FB stock once it's public. I'd say probably not
immediately. My guess is that the stock is going to sky rocket the first few
days (weeks?) and then people will cash out. That's when you should buy.

Then again, if you can get in this round, I'd buy.

------
Dnguyen
My rule of thumb is to invest in companies that make products that many people
use. Look around you, how many people use FB?

~~~
CyrusL
It's imprudent to decouple popularity from price. Would you invest in Facebook
a $200b valuation? $500b? Popularity is already priced in by the market.

To invest, you need to have a fundamental belief about the long term prospects
of the company above that of the market. I think better answers would be "I
think Facebook is a $150b company, so yes" or "I am 50% more bullish on
Facebook than the market" or "I think I will be able to sell to people in the
future who will be 50% more bullish on Facebook at that time."

~~~
Dnguyen
If anyone just blindly put money into a company, they're just as well flip a
coin. One has to do due diligent and weight the risk versus reward. And even
after putting money into a company, one must constantly evaluate its
performance. Using popularity to narrow down the prospective targets is just
the first step.

