Jim Rogers On Facebook and The IPO

Jim Rogers, the outspoken proponent of the free market and CEO/Chairman of Rogers Holdings, said yesterday he wouldn’t be a buyer of the highly anticipated Facebook stock simply because it would be too expensive. Jim Rogers is a widely followed investor and publisher of several books on investing whose insight has proven itself as he and Billionaire investor George Soros co-founded the Quantum Fund.

Facebook’s IPO will set a new standard for how low big investment banks are willing to go on advisory fees in order to win big business. Even that isn’t enough to sway some of the smartest investors to buying into the hype machine being created. Yes, investors love to buy hyped up and overly expensive stocks traditionally, but Rogers claims he would not be one of them.

Leaks and rumors suggest Facebook will file its documents for IPO, an initial public offering, the 1st of February and could be the biggest Internet stock offering in history. The talk is that this could be the largest Internet offering ever as Mark Zuckerberg and Facebook’s plan could raise upwards of $10 billion which would give Facebook a price tag of more than $100 billion.

By comparison, Google (NASDAQ: GOOG) raised $1.9 billion in a IPO with valuation of $23 billion back in 2004.

Even though Rogers says he wouldn’t buy Facebook, he did tell those at CNBC that the timing of an IPO this week would be a smart move by Facebook.

Rogers, creator of the Rogers Global Resources Equity Index, also stated his interest in technology in certain shapes and forms but hesitates on buying any of them. “They are a bit hot these days and they have been for two or three months, so that’s why I am short. I don’t buy high-priced stocks,” Rogers said.

But Rogers is not alone in his prerogative on Facebok’s IPO.

From Forbes, “The reality is that underwriters will price the [Facebook] IPO based on demand under the ruse of comparisons with recent Internet IPOs such as Zynga (ZNGA), LinkedIn (LNKD), Pandora (P), and Groupon (GRPN).”

The question remains; Will Facebook follow in the footsteps of recent Internet IPO Zynga (NASDAQ: ZNGA)?

The highly anticipated IPO of Zynga flopped as it came public at $10, briefly traded higher than that, but then went below $10 and has since stayed right around that same IPO price.

Many feel this is to be the same fate for Facebook, even when the company has publicly said that the IPO will produce jobs but also change the world. However, sharing in the beliefs of Rogers is Forbes’ contributing writer, Perer Cohan, who  explained his four detailed reasons as to why the Facebook IPO is irrelevant.

His first and biggest complaint is that “it’s grossly over-valued.”

On a price/sales basis, Facebook would trade at 19.7 — that’s 497% higher than Apple (APPL) at 3.3 and 294% above Google’s (GOOG) P/S of 5. And assuming Facebook shares Google’s net margin of 26%, Facebook’s P/E of 80 is far higher than Google’s 19 or Apple’s 12.7.

This means that Facebook’s stock might not hold up after the first-day IPO pop — the same fate that greeted most of 2011′s tech IPOs.

Previously, the largest technology IPO (before Google) was done by Infineon (IFX), a former semiconductor subsidiary for Siemens (SI).

As Cohan says,“If a Facebook IPO created a fever to invest in tech start-ups, it might be good for the venture capital industry. But since the IPO does not change much for Facebook investors, does not spur the growth of a range of related industries, does not unleash corporate investment, and might not even help out the IPO market, the after-effect of Facebook’s IPO could be modest.”

Previously, the largest technology IPO (before Google) was done by Infineon (IFX), a former semiconductor subsidiary for Siemens (SI).

As Cohan says,“If a Facebook IPO created a fever to invest in tech start-ups, it might be good for the venture capital industry. But since the IPO does not change much for Facebook investors, does not spur the growth of a range of related industries, does not unleash corporate investment, and might not even help out the IPO market, the after-effect of Facebook’s IPO could be modest.”

 

Be fearful when others are greedy, and be greedy when others are fearful.” – Warren Buffett

If you really want to make some considerable profits from the stock market, it is possible to make a considerable amount of money on penny stock trading. When you find the right penny stock to buy, knowing when to buy and sell is the second most important tool to maximizing your profits.

Being technical, analytical or just flat-out greedy when trading penny stocks is the easiest way to limit profits and, sometimes, even lose your entire investment. You need to have a strong and strict strategy to achieve your goal of maximizing profits while minimizing risks in penny stocks.

Listed below are a few of the many points each and every penny stock investor needs to discover.

  • Do your own research.
  • Trade Responsibly.
  • Verify everything.
  • Move Fast or Get Left Behind.
  • Do not use market orders to enter a position, use limit orders.
  • Have a System That fits You.
  • If a Stock Gaps Open, Look for Pullbacks to Enter.
  • Plan a Trade and Trade a Plan.
  • Always use stop loss orders to protect yourself.
  • Positive Self- Belief.
  • Keep trading as Part of a Balanced life.
  • If a stock breaks below our alert price GET OUT. Do not wait.
  • View Trading as a Score in Points and Not In Money:
  • Always take your profits whenever you can. Do Not Be Greedy.
  • Work Hard at Learning How to Trade Properly and Keep Working.
  • Do something to make someone else’s life better today.

About AimHighProfits.com

AimHighProfits.com strives to provide you with the hottest stock alerts in the market in Real-Time. We focus on stocks that trade for $5 per share or less, some as little as a few pennies with upside potential.

Our goal is committed to producing and publishing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions and to inform you of the best stocks in the market before they move. Our focus is primarily on OTC stocks in the stock market today which have traditionally been ignored by Wall Street.

We have particular expertise with internet stocks, gold stocks, renewable energy stocks, biotech stocks, oil stocks and green energy stocks. There are many hot penny stock opportunities present in the OTC market every day and we seek to exploit these hot stock gains for our members before the average daytrader is made aware of them.

Aim High Profits Disclaimer

This is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances.

AimHighProfits.com is a wholly-owned subsidiary of Kelevra Media Innovation.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision.

Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

For a complete explanation, please visit our disclaimer page.

Last updated by at .

0
  Recent Penny Stock News