Just kidding. If you had any eye on the news at all on Friday, it was all about Facebook's IPO. It's been a hot topic for quite some time whether to invest in Facebook (FB) or not (if you even have the funds to do so). The problem with FB is that everyone knows about it and most people love it. Everyone thinks it’s so popular and believe there is no way it won’t remain popular until the end of time, and that’s why they think “hey might as well buy a few shares and make some money because this stock is going to soar! How can it not? It’s so popular!” And that’s where the trouble lies. When children and friends who have little idea of what investing is all about suddenly want a piece of FB, you might as well stay away. Attitudes like that drive a price up and up, only to see it crash back down when the hype runs out. We don’t know when but if the first day of trading was any indication (see below), these first few months could be very volatile.
Right now, the stock is riding on the excitement of the IPO, but you know what? In a few months the hype will fade. Then let’s see where the stock is at. Until then, I would stay away from Facebook (the stock, not the site). When people start to buy a stock because of the hype surrounding it, that’s when things start to go bad. And let me tell you, there has been plenty of hype around Facebook’s IPO.
