Ambivalence and the Facebook IPO

  • By Cari Wira-Dineen
  • March 07, 2012

Social Marketing

Facebook is preparing for its IPO later this spring and everyone is talking about what the company—and its stock—are really worth.

Personally, I can sum up my feelings about Facebook in one word: ambivalent.

I’m not alone: Some analysts seem to be on the fence about Facebook’s value.

Some say Facebook is undervalued—meaning, the initial price per share could soar after the IPO. After all, there is no other company like it, in terms of scope and power. “How can you place a value on a company that doesn’t have any comparables?” asks Tony Batista, former options and futures trader and co-host on Tastytrade.

On the other hand, Francis Gaskins, a financial analyst and IPOdesktop’s President and Editor argues that Facebook is overvalued.  “It seems like the company is done growing. It’s already losing users due to Facebook Fatigue.”

It’s hard for investment amateurs to gauge. Several companies have gone public lately—LinkedIn, Pandora and Groupon. But most are trading at or below their IPO price. 

Most ordinary investors won’t have a shot at those hot IPO shares, anyway. But even if I could get in on this IPO, I wouldn’t put my money on this horse. Put me in the Facebook Fatigue crowd.

Make the call. Do you think Facebook still has room to grow?

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