Ask HN: Should I invest in the Facebook IPO?

For every investment you make, you need to know what you would consider as a fair return on that investment and when you would call it quits.

As an outsider watching all the action FB is not a fair price or undervalued stock based on what they are currently delivering. So you need to know what is your risk appetite and how long you want to stay invested.

Short term I do not see FB share providing tremendous value (except the volatility that may be there).

Long term you need to bet on certain things they could do right and if you can stay invested for a long time trusting that a bunch of smart folks will figure out something of value.

how are they going to leverage their user base to venture into newer forms of search on various new devices?

What will their mobile strategy be? Will they acquire companies, say, the second biggest player in mobile ads space after google?

Would they venture into FB phone (may be of tremendous value considering it fits into their social portfolio)?

So it is a lot of ifs & buts similar to any other startup investment, except that they are not a startup anymore and they are going to have truck loads of money to execute.

FWIW, these are points I would consider before investing in FB. :)

It's always hard with tech companies because it's difficult to judge whether or not they're being priced fairly. So much of their value is based on the income in the future and their projected growth rate. I think at this point, its more important to decide whether or not there's a bubble here in the tech industry. With Groupon's lackluster results, Netflix getting killed, Pandora's volatility, I'd be a bit wary. If things do go wrong and the bubble busts, it'll be a long time until you can make a profit with facebook stock.

Also, the Greek debt crisis is another factor to think about. It seems like they have come to an 'agreement', sort of, as of right now. But things are still very much uncertain. Analysts are expecting things to smooth out, which is reflected in the prices, but if they don't, the world economy will tank. When it does, money will flock to the defensive stocks (consumer staples, healthcare, utilities), and money will funnel out of the cyclical ones (tech, heavy equipment, etc)

Most likely you won't be able to get in the IPO so the question is whether or not you should buy FB stock once it's public. I'd say probably not immediately. My guess is that the stock is going to sky rocket the first few days (weeks?) and then people will cash out. That's when you should buy.

Then again, if you can get in this round, I'd buy.

My rule of thumb is to invest in companies that make products that many people use. Look around you, how many people use FB?