Should Investors go for Facebook IPO?


What concerns American investors in the Facebook IPO is the amount at which each stock will be valued. As these stocks are being awaited in anticipation, these stock values are expected to be over-valued. As with any IPO, if the stocks are priced at the lower end, then it will be more profitable for the company. Jim Cramer of CNBC quoted, “With 800 million users, a fantastic business model and tons of revenue, Facebook deserves to have a gigantic valuation.” Cramer further said, “It’s growing really fast and making a ton of money. So don’t be thrown off the scent of what could be a real home run.”

In a Forbes article, an expert opines that with the current hype in mind, ratio of demand to supply of Facebook stocks will be 4 to 1. This will primarily make the stock prices soar, indicating that mostly big investors will get their hands on these stocks. Also, acquiring these stocks before it goes public will be difficult. As Facebook has an immensely vast user base and a promising future, investing in its stocks is a good deal. What will work in Facebook’s favour is the fact that the people of America would want o show their preference for the company by investing in it. The only hurdle in doing so will be price of the stocks. Though it is still too early to say anything about the stock value now, the only certain outcome will be that Facebook will be a richer firm.