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COMMENTARY | My friends already know. I'm not a fan of Facebook, which recently filed it's S-1 with the SEC for an IPO of class A shares, but I'm betting it will be a good stock trade.
I was talking to a friend who is dating someone new she met from an online dating site. When I asked questions about her man, she directed me to her Facebook page. "You can see his photos there," she said. Evidently, Facebook would also give me the latest on everything else going on in her life. So much for our "face time."
Facebook has also taken the mystery out of the 25 year high school reunion and the joy out of annual Christmas card updates.
But the fact that I think Facebook is going to be the next VCR tape in a world of DVDs, doesn't mean I won't buy Facebook with its blockbuster initial public offering.
I plan to take part in the IPO and hold the stock until it makes a decent profit. It's difficult to say how long Facebook will remain a winning stock.
I remember in 2006 when Vontage, an Internet telephone company, burned investors with a technical problem. Customers tried to buy shares, but were told their purchases didn't go through. After the stock was down, they learned they did indeed own the shares at a price that was not on the high end. Customers won a class action law suit, but it turned a lot of people off to IPOs. Some people are still scared of the stock market.
Most experts warn that hot IPOs will later tank.
Groupon was one of the most interesting IPOs I have followed within the past year.
In November of 2011, Groupon shares plunged 15 percent and settled at a price below the $20 IPO asking price. Of course, during its first day of trading, Groupon shot up to $31 a share.
By judging Groupon, which recently had a 52-week trading range of $14.85 to $31.14, I see no rush to buy any stock during an initial public offering.
I'm sure Facebook stock will have a good run, but the novelty will wear off. I just want to be in the game.
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