In case you were unaware, IPOs are terrible investments — at least most of the time. The lottery ticket dreams keeps hope alive that this next one is going to be a giant winner.

Hopes are pinned on the giant Facebook IPO, coming out at an expected 100 X earnings and 30 X revenue. Its going to take extrordinary growth to justify those prices, especially for people who buy stock in the open market at higher than IPO prices.

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Click to enlarge:

Source: NYT

Category: Investing, IPOs

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4 Responses to “IPOs: From Netscape To Facebook”

  1. rocketgas says:

    It comes down to 1 thing. Is this service indispensible. Does your social network depend on this thing? For me no, but I’m a shut in, so.

  2. Bob A says:

    i hate to say it and i no fan of facebook but if every dingdong out there who buys ‘virtual’ tractors on farmville buys a few shares of facebook (and they probably will) the sky’s the limit.

  3. rocketgas says:

    Yeah if you can get an allocation of the IPO. I would go for it. Is this a forward looking investment. I doubt it. Facebook to me is the computerization of Old Boy networks. You can only get information from your friends. Might run for some time, but this is gonna blow up. Would make an interesting dissertation for someone into social/political economy

  4. blackjaquekerouac says:

    i was using Google long before it IPO’ed. And i use it even more today. I’ve just go my first I-phone. “I see the light” as they say. Facebook has been around a while…it’s far from new however. “What is it” remaing a question can go a long way towards making a fortune…unless of course you know exactly what it is…and the folks riding the pony know exactly what it is. Facebook is a media company…nothing more, nothing less of course either. Is it differnet from “My Space”? Certainly in the “hype” sense of the term! The issue for me is exactly what is present here: “a 100 billion dollar IPO.” bullshit! “the company is worth what the market will bear.” that would be 5 billion. When i heard nothing about Facebook on Monday….i went negative. Simple as that. When you hear nothing BUT negative…(google)…that was GREAT buy signal. When you hear nothing…doesn’t strike me as such. Of course “it has to actually go public and be priced first.” Let’s start with that shall we? I do like Morgan Stanley. I do like General Electric. I’m warming up to AT&T…of course no one will call these “jackpots”…even if they do end up doubling or tripling from here.