Don’t worry Facebook, I still “like” you! It has been all over the news how Facebook has flopped in the market and it’s still over-priced. There are lawsuits out now against Morgan Stanley (a lead underwriter handling the IPO) and Facebook because they lowered earnings expectations without telling the world. Facebook filed the paperwork, which was available to everyone, but the situation still could have been handled better.
To me, this loss in the market and the lawsuit are the problems with America in a nut shell. We are all looking for the easy fix or the “get rich quick” scheme then, when it doesn’t happen, we file a lawsuit. CNBC actually asked a lawyer if he would still be filing a suit if the stock had opened at $38 and popped to $60. Of course, the attorney said yes because Morgan Stanley did wrong by not making the lowered earnings expectations public knowledge, but I doubt it because nobody sues when they are happily making money. Most investors would have taken that money and ran. This whole issue tells me nobody believed in Facebook as a company and just wanted to make a quick buck off of hype. So if that’s worthy of a lawsuit then I should sue Powerball because I didn’t win the Lottery!
I’m sorry we all didn’t make our billions last Friday, but really the founders of Facebook and the people who helped cover the start up costs should have made the money. Let’s face it, they did all the work. If we want to become billionaires, we should have an idea and take a chance. Our country was founded by pioneers and ambitious people willing to take chances to create things that make our lives better. That is our heritage and we shouldn’t forget the work ethic of our fore fathers.
Maybe we don’t have the billion-dollar idea, but everything starts small. Papa John’s didn’t open thousands of pizza franchises over night. I have a friend who is starting a clothing line for hockey fans. Will it sell world-wide? We don’t know yet, but at least she is chasing her dream! She even used one of my shirt ideas! Check it out at Outer Edge Threads. Krissy, I wish you the best of luck!
Here’s the bottom line…if you had a chance to invest in a company for $33 a share where 900 million people already use the brand and it had $5 billion in revenue last year, wouldn’t you do it? (If not, the guy from NCIS should come slap you on the back of the head!) Well my friends, that’s Facebook. Also, Facebook only has 3,500 employees, so low overhead means higher profit margins, which we love as investors. Was I disappointed with the results of the IPO? Yes, but I think we should all take a step back and look at this company as a true investor. Looking ahead a year when the hype dies down, we’ll be wishing we bought it for $33. Remember in 1997 Apple traded for $14, now it’s at $565.
Investing is not designed to be a quick dollar or like winning the lottery. Warren Buffett said you should invest in companies in which you would want to be the owner. This means that you should believe in the company. It shouldn’t matter what the market said in one week. Have you seen the market this month? Everything is down! There is even a saying among investors “Sell in May and go away.” Every year it’s the same thing.
Give Facebook a real chance. It isn’t a DOTCOM bust like all those other companies. It is a company with a strong foundation and will make us proud that it is an American company in the future.
