Why I’m Glad I’m not in on the Facebook IPO

With this week’s Facebook IPO Bryan Bulaga Authentic Jersey threatening to be the third largest in history behind only Visa Inc. and GM, I thought it a good time to talk about why I’m happy I’m not going to be buying in on Friday (yes, I’d LOVE to be selling).

If you’re interested you can read the entire Registration Statement or Facebook IPO Prospectus by clicking here.

I (They) don’t know how they will create Bryan Bulaga Jersey long term, sustainable revenues

The anecdotal evidence from all the young people I speak to is that Facebook has peaked in terms of its utility.  They have penetrated almost 1 Billion souls, and one has to wonder where growth comes from once we are all signed on?

Selling points on Zynga did earn them a few billion in high-margin revenue last year, but how much runway does this category have?  If Facebook makes ads more prevalent, they will destroy what makes it cool. I can’t see them doing that.  Add to that the danger of ad revenues decreasing, and Bryan Bulaga Kids Jersey the picture is even bleaker.  See http://venturebeat.com/2012/05/15/general-motors-unfriends-facebook-says-report/

Overpriced

It appears that the Trailing P/E of the offering will be about 70 or 80.  Google’s is 19 and Apple’s is about 15 today.  They are both companies with lots of growth potential ahead of them.  For an investor to do well on the Facebook IPO, Mark Zuckerberg and company will have to show some exceptional wizardry when it comes to growing earnings.

It’s hard to stay on top

Just ask Yahoo, MySpace, Friendster and myriad others.  The threats to Facebook are huge.  They admit they are having difficulty figuring out how to make mobile make money, and increasingly that’s how people access the network.  There will likely be lots of opportunity for the IPO investor Bryan Bulaga Womens Jersey to get out with a profit.  No doubt the first day will bring furious trading as people like me Bryan Bulaga Youth Jersey (who can’t get in on the IPO) scramble in the open market to buy shares.  But at the end of the day either the company will have to perform, and get earnings into the 10’s of billions, or the stock price is doomed to drop.