guru267 wrote:kyt wrote:this will flop big time,how can this site be more valued than cocacola?
Value has nothing to do with it..
Reasons why FB will rise:
1. The market was expecting it to be valued at 100billion and now its being valued at 74billion for the IPO ..
2. Even with a high valuation it is still cheaper than majority of its social media peers
3. There is still hype and speculation about future prospects of the company..
4. The relatively low share price makes it available to the whole market
Similarities between Facebook IPO and Safaricom IPO
1.Even with a high valuation it is still cheaper than majority of most recent IPOs
2.There is still hype and speculation about the future prices.
3. The relatively low share price makes it available to the whole markets
From the above similaries one can draw a wider conclusions about the prospect of the company price after the IPOs
First like Safaricom there is alot of publicity sorounding the IPO, this publicity is good for a smart investor and bad for dummies, Facebook have no incentive to underprice the IPO infact they have the incentive to Overprice it just like Safaricom.
Seconding, there are alot of questions about the real value of advertising through facebook and if anyone follows Wallstreet journal, you've probably read about it, so if you combined the known knowledge that Facebook might not meet it's future revenue targets with the publicity sorounding the IPO, you get a situation where the price will jump up during the first 3-5 days of trading driven by the hypes followed by by a 15-25% drop as the speculators and the smart investor sell their shares. My best advice is sell before 1pm Thurday the first week of trading.
Good luck