Invest in Facebook? Not such a good idea.
In the next couple of days, Facebook is supposed to be going public with a reported 5 billion dollar initial public offering (IPO). Apparently this figure was derived by looking at the current and anticipated financial position of Facebook.
For me this seems like a modern-day tragedy in the making. Sure Facebook is the current reigning king of social networks but nothing is more fickle than an internet fad. A very recent example fresh in everyone’s mind is MySpace. MySpace was the center of the social geek universe and then Facebook came along. Interestingly enough, Facebook’s interface wasn’t as slick or as flashy as MySpace, but that didn’t keep millions from jumping off MySpace like rats from a burning ship.
So now Facebook is the ship of dreams but with others just over the horizon, namely Google +, how safe really is this from an investment standpoint? Given the inherit volatility with the internet and in particular social media, I honestly can’t see how anyone would consider an investment in Facebook as a good long-term investment. Then again, that wont keep the day-traders from riding the wave for a few months.
Bear in mind that this is only my two cents, but I’m not going to invest even that in Facebook.