|
|
In this Nov. 16, 2010 file photo, Facebook CEO Mark Zuckerberg smiles as he speaks at the Web 2.0 Summit in San Francisco. Facebook, the social network that changed "friend" from a noun to a verb, filed to sell stock on the open market. Its debut is likely to be the most talked-about initial public offering since Google in 2004. (AP Photo/Paul Sakuma, File)
|
Grabbing a few shares of Facebook stock probably won’t be easy for average investors, depending on how the social-network company handles its initial public offering, area financial advisers say.
Either way, they have been fielding calls from would-be investor-friends of Facebook.
“There’s quite a buzz going on,” said Robert Gordon of Robert Gordon & Associates in Springfield.
Analysts do a lot of educated guessing when a private company goes public, because private companies are not required to make the kind of detailed financial reports required of publicly traded firms.
“It’s a hard thing to know,” said Gordon. “We’ve seen tech IPOs come out lately that haven’t done very well. It’s just very, very difficult to tell where the revenues come from.”
Traditionally, institutional investors, such as major mutual funds and clients of the firms selected to lead the sale, are given preference for IPO shares, said local analysts. Facebook has selected Morgan Stanley to lead the IPO.
“It depends on how the investment banks put it together,” said David Lisnek of LPL Financial in Springfield.
After shares are set aside for institutional and other major investors, relatively few shares are distributed to individual brokerage offices, Lisnek added.
The conventional wisdom in the investment industry is that hot IPOs typically cool after the first rush of buying, Lisnek said. Once-cold stocks also can heat up, he said.
“If you look at Apple, they’re a major company now, but no one was real excited when they were at $7 a share,” said Lisnek.
Harmon Deal with L.A. Burton & Associates in Jacksonville said it is possible Facebook will follow Google’s example and set aside shares for individual investors.
“They (Google) had online subscriptions. You told them how much you wanted, and the price was figured out depending on how much you purchased,” said Deal.
“I’m wondering if they (Facebook) don’t have to do something,” Deal added. “Instead of alienating, what do they have 800 million ‘friends?’ it would be good PR to offer it to everyone.”
Deal, who has been in the investment business for more than 25 years, said there is a cautionary tale in the America Online IPO of the 1990s.
“Those early Internet search engines were popular, and we were all on phone (dial-up) back then,” said Deal. “I’m more of a long-term, value investor.”
Tim Landis can be reached at 788-1536.