(Image Source: GigaOM)

 

BY MADISON MACK

ANCHOR NATHAN BYRNE

 

Thinking about investing in Facebook? You may want to reconsider. The company has filed its IPO, but …

It will still be a few months before Facebook stock hits the open market. And so far, many in the media don’t like what they see. CNET reports.

“ … how much growth potential is there in a company that already has 845 million users, per its filing? I don't doubt the company will be successful for a long time, but I suspect the days of hockey-stick growth are over. A wise man tells me often that you only make money by not doing what everyone else is doing. Even if I could invest in Facebook, something tells me it would only disappoint.”

 

According to Facebook’s SEC filings, 85 percent of the company’s revenue comes from ad sales. On WebProNews, an analyst points out – some of those numbers are troubling investors.


“They have 845 million average monthly average users. Of that, 450 million are mobile users. The thing is – right now they don’t have any revenue from their mobile base and that base is increasing.”

A former social media CEO explains to Al Jazeera – when start-ups go public – it is the end of true innovative risk-taking.

“When you’re private you can get away with anything, you can build your business, you can make radical shifts. Mark has been adamant about making radical shifts and iterating and improving Facebook. I think once they’re public…” (FLASH :48-51) “If your stock dips at any point you may get burned and start taking fewer risks.”

But CNBC’s Jim Cramer sees a lot of potential in Facebook stock, noting the company has big momentum right now.

“Facebook at the right price could be the deal of the century. Now when I mention that, think of Google at the right price.”

Still thinking about investing? Gizmodo explains, IPOs are not a democratic process and there’s a long, long line ahead of you.

“…in a big IPO, institutional investors typically nab up to 90% of shares before Joe Investor can get involved. And chances are, there are plenty of Joe Investors with bigger wallets and better ins than you and I have. Shares will be available eventually, of course. Just as soon as the stock's risen enough that the big dogs feel comfortable cashing out.”

Business News: Analysis: Media React to Facebook IPO

Analysis: Media React to Facebook IPO

February 6, 2012
(2:06)
Facebook stock won't hit the open market for a few months, but so far, many in the media don't like what they see.
   
TRANSCRIPT

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