Facebook Proxies Rip on a Down Day Portending Strength for the IPO
- Posted by ppearlman
- on May 15th, 2012
Yesterday, my pal Kid Dyamite lamented that he might get the shares of Facebook that he put in for with his broker.
His worry is understandable given the tape has been dreck for six weeks, valuation in the name is nosebleed and skepticism on the issue abounds.
But I’m thinking Kid has little to worry about come Friday when $FB shares begin trading.
First, on Monday the broad market closed lower by 1+% but $FB proxies including $ZNGA $FIO & $GSVC all traded 4% or more higher. Sure, these stocks have been beaten up recently but the coordinated move on the first day of the week of $FB’s IPO is telling.
Second, skepticism is running incredibly high in the media and from those who focus on valuation – the operative long term metric that is useless in the short term.
Third, there is huge interest in the IPO.
Unless the stock begins falling soon after it begins trading, I expect those who are focused obsessively on the stock but only watching to let down their guards, buy shares and fuel momentum early on.
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Phil is the executive editor of StockTwits and an investor in the company. He is a partner at Social Leverage, LLC and makes early stage investments in web based companies. (More)