Technology: A sobering look at the Facebook IPO

San Francisco: This is the year's hottest initial public offering, but some of the wealth managers find themselves having a hard time recommending the Facebook of its customers.

The world's largest social network should be looking for $ 75000000000 $ 100 billion in its evaluation of the IPO, the most anticipated stock offering from Silicon Valley since Google Inc. went public in the 2004th At Granite Investment Advisors in New Hampshire, Chief Investment Officer Scott Schermerhorn already fielding inquiries of customers eager to get in on the action.

"We had some customers call and how we move these numbers, they're sober," he said. "Assessment is 100 times earnings in the stock market is trading on the 12th"

"At the end of the day, if you have a small amount of money you can lose a chunk of Facebook and you want to speculate, go ahead," he added. "But do not use the money, you really need to do to save it. I put it to Microsoft, which is dirt cheap right now."

To be sure, most technology analysts argue that Facebook's growth potential far surpasses Microsoft Corp., whose shares have largely traded between $ 20 and $ 30 over the last decade. Are the first steps toward content such as streaming, and have yet to make serious thrust abroad.

And $ 100000000000 for the assessment of Facebook at the top - how big in absolute terms - is not that out of whack in Silicon Valley tradition of the IPO. Facebook is looking for multiple entry for up to 27 times a year in revenue, or up to 100 times earnings.

Apple Inc. - today the world's most valuable technology corporation - went public just $ 1190000000 Assessment of 1980, which is equal to 25 times earnings and 102 times earnings. Google - Facebook is the most commonly measured in the potential - is valued at $ 23000000000 in its 2004 debut, or 218 times earnings.

But the sheer size of Facebook, evaluation means that it has become the world's first $ 700000000000 company, if it is repeated in the profit share on Google.

"For these estimates, investors really need to set aside emotion ... and invest in their heads," said Edward Reinhart, managing partner of Capital Advisors Wealth Management, who owns the private market for Facebook shares purchased two years ago.

Reinhart, who advises clients on retirement planning, warned that the hype building up in front of Facebook's IPO could mean "dangerous waters of the retail investor."

Stock up with institutional investors

Facebook, led by 27-year-old Mark Zuckerberg, on Wednesday issued its IPO prospectus to the Securities and Exchange Commission, trying to raise $ 5 billion.

The anticipation surrounding the company and its growth potential resembles the hoopla associated with Apple, Google and Amazon.com Inc., the stock debuts. All three companies have made the almost impossible - lived up to the hype.

There are many who believe Facebook is doing the same, indicating that the user 843000000, and the fact that the company is much larger and more profitable than other recent debuts the Internet, such as the loss-making Pandora Media Inc. or Groupon Inc.

Social gaming company Zynga closed nearly 17 percent on Thursday 1 Facebook made the trade after it showed 12 percent of its revenues last year video game publishers.

Friday, February 3, 2012

A sobering look at the Facebook IPO

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