The good news is that I got in on the biggest Internet stock initial public offering (IPO) in history. The bad news, if you believe all of the analysts who have warned about overvaluation and low chances of future earnings growth, is that I bought Facebook stock.
I’m still thrilled. It’s extremely rare for a small potatoes investor like me to be able to get in on an IPO. eTrade sent an email early this morning alerting me that they have fulfilled my request to buy FB (as the social media giant will be known on NASDAQ when public trading begins) had been granted. I asked for 100 shares. I was able to buy 50 shares at $38.
The Facebook IPO frenzy has been high. Seniors in Florida were clamoring to get in on the IPO. A dad in New York state wanted to bet the $25,000 he has saved so far for his daughter’s college education on the IPO. After thinking about the risks, though, he appears to have backed down.
Warren Buffett, the billionaire investment guru, has been widely quoted as saying he would stay away from the Facebook IPO because of the frenzy surrounding the stock. He called the company an extraordinary business. And said he was an agnostic on the IPO because putting a value on such an extraordinary business is difficult.
“They are the hardest to value,” he told CNBC.
To me, Buffett’s words weren’t damning at all. He will sit on the sidelines for the IPO and watch the stock’s progress. And just as there were naysayers about the stock, there were also supporters.
Media Post blogger Dave Morgan is bullish on the IPO and touts its potential as a media company and a payment platform for its Facebook Credits.
Investment author Josh Brown recommended avoiding the IPO: Once it starts trading, its going to go a premium price, he says, and advised to avoid investing money they will need right away.”This should not be the cookie jar money or the money that you may have the use for to pay for a kids college in six months,” Brown says.
Not to worry, I’m not betting my retirement fund on this thing. Just a little “play” money — the equivalent of a couple of Vegas gambling trips including hotel and airfare costs. My 50 shares aren’t going to move markets or put me in the poorhouse.
I still expect a roller coaster ride as CEO Mark Zuckerberg and crew plot the future of the company. Again, I’ve strapped on my seat belt. I’m ready.
See related: I want in on the Facebook IPO, but I’m just small potatoes