Here’s five things you need to know about Facebook’s (FB) IPO:
- Facebook stock will have the ticker symbol FB.
- FB is expected to price around $28 to $35 a share. This price is going to get the small investors excited, because these people will feel they aren’t paying too much for the stock, even thought the stock’s expensive. Still, the low share price will likely entice small investors to buy in.
- There’s going to only be a limited number of shares. The company will have a little over 2 billion shares issued yet only 337 million will be out in the public. So there’s a limited supply yet high demand.
- Facebook did around $4 billion in revenue during the last twelve months and made around $1 billion in profit. I’ll take a wild guess that for 2012 the company does $6 billion in revenue and makes maybe $1.5 billion in profit. The IPO is expected to value the company at $100 billion, which means the P/E is maybe 66. Just a wild guess.
- Shares are expected to start trading in around two weeks.
Sharek’s Take
Facebook fits the mold of a stock I would invest in, it’s growing fast and profits are climbing higher. I’m just concerned the shares will run up on hype. Lots of people want the stock no matter what the price — that’s not good. I think the stock will go up immediately after it goes public, but I might wait and see before getting on the bandwagon.
