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Over last 4-5 days, members, friends, family and even few strangers have contacted me to discuss the opportunity to invest in one of the most dramatic IPO's of all time, none other than "Facebook"! Ironically, some of them have never even bought a stock! The question really is:
"Do you want to invest in the business or the brand?"
With massive madness surrounding the IPO, there is little doubt that FB could trade significantly higher than IPO price, when it makes its debut on Friday! The rush of demand is likely to surge the stock higher, at least in the short-term! This is the "brand" magic and a great opportunity to lock some quick gains, if you can get lucky and grab something before it goes too high!
And if you are looking to invest in FB for the long run, ask yourself:
Is FB really worth trading well over the IPO price?
Does FB have a sustainable business model?
Do they have a plan to generate money from mobile?
Is the pulling out of GM from advertising via FB an indicator?
Could FB strengthen its growth, mint money and justify the high valuation?
At this point, I would like to get more visibility into its business model before I choose to invest ! For short term, this is the stock to grab and sell before reality strikes!
