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Now’s not the time to buy Facebook, experts say

Investors left out of the Facebook IPO are getting a second chance, but some might question if they even want it.

Mania over shares of the No. 1 social-networking company quickly turned to skepticism Friday. Shares barely budged from their initial public offering price of $38 and closed at $38.23 on the first day of trading.

The lackluster opening means individual investors can buy Facebook stock at the same price shares were offered to privileged investors. Investors who piled in the first day lost as much as 15% in just a few hours.

Many analysts are suggesting that investors resist the urge to jump in.

“I would not touch this,” says Josef Schuster of IPOX Schuster. “Facebook’s (stock) trend is to the downside.”

Even though investors can get a crack at owning Facebook at essentially the IPO price, they should take a pass because:

Weak first day

The IPO’s tepid debut breaks confidence in the stock, just as it needs it. Investors will now focus on the company’s earnings growth, already showing signs of weakening, says Francis Gaskins of IPOdesktop.com.

The biggest IPO after Facebook, General Motors, ran into similar weakness in its debut and was never able to shake it off. GM rose 3.6% on its first day of trading in 2010, but since has fallen nearly 38% from its first-day close.  Read More

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About Rant4u

A Revolution in Social Networking

Posted on May 19, 2012, in #social media and tagged , , , , , . Bookmark the permalink. Leave a comment.

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