Thinking of Buying Facebook’s Shares? Here’s What You Need to Know
Facebook is going to become a public company soon which means you’ll be able to get a piece of it for yourself. If you don’t know what we’re talking about, check out our Sunday Linkup post where you’ll find everything related to Facebook’s IPO.
However, should you buy Facebook shares (stocks)? Maybe your money would be better off with some other tech company, if you’re going to invest it in the market. Here’s what you need to think about.
You’re Not The Big Player
Hey there, Joe! You want some sweet Facebook stocks? Well, you’ll have to wait some time to get them because the big investment banks will get most of the shares at first. That’s how it goes in the stock market; big guys get things rolling, and currently, keeping in mind the dot-com disaster (1999.-2000.) experts will be much more careful with Facebook’s shares as well.
To us, geeks, Facebook might seem as a holy grail of stock market, but we’re here to talk about the Web and what it can do for you. Stock brokers are the ones that look at Facebook just as a new part of their portfolio.
What Will Facebook Do To Keep The Price Up?
Apple stock owners loved each single keynote Apple had, and there’s a simple explanation why – after each one of them, the stock prices went up. If you’re going to invest into Facebook, maybe you should do it carefully, at least in the beginning. Get your investing budget divided into two parts, a 70-30 ratio. Put 70% of your money into well established companies (or hey – if you have a lot of money, think of investing into a perspective startup) and the other 30% into Facebook.
You’ll have enough time to get more Facebook shares later, when prices stabilize and when Facebook proves itself in the market.
The Risks That Facebook Might Face
Facebook earns its money from advertisements. Its redesigns and layout changes were always about the better conversion of the ads they show you. Unfortunately, it is possible that Facebook might cross a line and harm the user experience in order to get better ad placement.
Additionally, ads on Facebook are so effective because it knows everything about you. Privacy issues are also a major problem for the newest kid on the stock market and if any of this fails, the stock prices might drop.
Of course, these are the risks (let’s not forget the press and media which also impact the stock prices) that every public company faces every day, however, some of them are well established and moderately constant with their prices. The choice is yours – will you buy Facebook’s shares or are you going to stick with Google, Apple or some other company on the market?
