I bought shares of Facebook yesterday on its opening day on the market after its initial public offering (IPO). Well…it was actually more like one single share of Facebook. I bought it from OneShare.com
where I got one single share framed for my wife. Should you buy shares Facebook IPO?
It all started on Thursday when my wife asked me if I would purchase any shares of Facebook on Friday when shares began trading on the public market. My wife and I do not really see eye to eye in most cases about finances and investing. She loves the idea of Facebook as a company but does not really care to look at the company’s fundamentals as an investment.
Why Facebook Makes A Poor Investment
While Facebook may be a great company and website that over 900 million users enjoy using, it also may be a poor investment at these price levels. Here are a couple of things to consider when looking at the company’s fundamentals.
- Facebook share price sells for 20 times its projected 2012 revenue. Google trades at about six times its projected revenue for this year.
- Facebook’s $100 billion value is lofty. Apple debuted with a market value of less than $2 billion in 1980. Microsoft had a market value of less than $1 billion after its 1986 IPO, and Google had a market value of nearly $25 billion in 2004 after its IPO.
- Facebook has generated less than $1 billion in net income over the past year. It has a massive user base that still needs to be tapped. They haven’t figured out how to capitalize on so many eyeballs and translate that into profits yet.
- Facebook is struggling to earn advertising revenue from mobile users which have rapidly been increasing over the past couple years.
- Facebook is still locked out of China thanks to the Chinese government’s ban on the website.
Facebook’s IPO almost certainly represents a poor long-term investment at or above the IPO price of $38 per share. That is why I am not buying a large number of shares for my investment portfolio. But, that has not stopped me from buying a single share for my wife as a gift.
How To Buy One Share Of Facebook As A Gift
OneShare.com provides customized gift stock ownership by making buying a framed single share of real stock easy and affordable. The real stock certificate represents true ownership in publicly traded companies. OneShare.com offers single framed shares of stock in America’s favorite companies like Facebook, Disney, Harley Davidson, World Poker Tour, Starbucks, Dreamworks, and many other public companies.
The owner is entitled to annual reports, declared dividends, and any other shareholder perks just as you would if you had bought the shares through a discount broker making this an everlasting gift that is interesting and educational. GiveAshare.com has companies that fit all gift-giving occasions.
Should you buy Facebook IPO shares?
Should you buy Facebook IPO? Did you buy shares of Facebook on Friday? Are you going to buy shares next week?
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I agree that Facebook probably isn’t a great investment at this point. While they have a massive user base, it is tricky to monetize their kind of content. When people are browsing photos and chatting with friends they aren’t really looking for something specific like on a search engine. It will be interesting to see what advertising changes they make in the coming year now that they’ve gone public.
Their click through rates have proven to be horrible as well even when compared to other sites.
Now that its official that facebook is public. Now facebook may be a really great company but that does not mean that the stock is a great buy . Everybody’s uncles uncles believes facebook will be the next google what does that tell you.
Like you I definitely considered buying into Facebook on the first day, although not for an investment but more as a novelty. That framed share looks really nice. I own some old shares of defunct railroads that are worthless as shares but are beautiful art. These look really pretty framed and are a great conversation piece.
I do like Oneshare’s model but many of their certificates are seemingly expensive to the general public. Aren’t most of their certificates between $60-70? How high of quality is the framing process? Perhaps that makes the price worth it.
That’s exactly what I did. It was pretty much a novelty and a present for my wife. It was fun, but I was actually a little disappointed at how plain their stock certificate looked.