News & Analysis
80% of Financial Advisors Not Recommending Facebook
Advisers on FaceBook IPO: Yawn ... As public stock offerings go, it appears that Facebook Inc. is about to hit an epic home run. But financial advisers are less pumped up than their clients. According to an ongoing survey of financial advisers being conducted by InvestmentNews, few advisers are as enthusiastic about the Facebook IPO as their clients. Sixty-five percent of the advisers surveyed said their clients are inquiring about investing in the Facebook IPO, but 80% of the respondents said they are not recommending the stock to their clients. – Investment News
Dominant Social Theme: This Facebook stuff is great.
Free-Market Analysis: Now, this is a strange and noteworthy occurrence (see excerpt above). American financial advisors are not big boosters of the upcoming Facebook IPO.
Of course, we understand that. We've written an article pointing out that Facebook seems to us a kind of managed Intel operation, and that its business model involves selling information about its subscriber base gleaned from a variety of possibly shady practices.
In other words, having been funded and guided by American Intel, it is not surprising that the Facebook strategy has elements of spying incorporated into its basic service offering. You can see our article here: Facebook IPO Is US Intel Operation?
We pointed out that a business model that relied primarily on analyzing viewer data with an eye toward reselling said data to advertising agencies was perhaps not a healthy approach.
Facebook has already experienced several viewer rebellions over its privacy intrusions and we figure these will continue. The Facebook model is based on these intrusions.
Nonetheless, Facebook survives if not thrives, in the short term anyway. According to the Investment News article, "... more than 55% of advisers said they believe it will outperform Google, which has gained more than 660% since 2004."
Obviously, advisors have some big expectations for Facebook despite their lack of enthusiasm. We're not surprised about this, either. Whatever the US military-industrial-intel complex stands behind gets big play in the US and around the world. Here's some more from the article:
"Right now, all the stars are lining up and it's going to be a very hot IPO at a time when the IPO market in general is already hot," said Josef Schuster, chief executive of IPOX Capital Management LLC. The stock sale is tentatively scheduled for the second week of May but pre-market activity has already pushed Facebook's market capitalization to more than $102 billion.
According to published reports, early trading is valuing the company at more than 100 times last year's earnings and 50 times its estimated earnings for next year. The IPO is expected to raise more than $5 billion. By comparison, the 2004 Google IPO raised $1.9 billion when it went public at $85 a share. Google stock is now trading at nearly $650 a share.
Market watchers like Mr. Schuster say that the hype and momentum behind the Facebook IPO ultimately could push the company's valuation as high as $130 billion. "It's a big brand name, there's a lot of pent-up demand in the IPO space, the appetite for risk is high, and these kinds of IPOs are typically underpriced," he said.
There is an argument to be made, and it is one that is implied in this article, that the Facebook IPO is not attractive to advisors because they are skeptical that they will be able to get the product.
Schuster himself is quoted as saying that, "Because only about 5% of the company's total shares are being offered at the IPO price, investors would be better off waiting until after the public offering to buy." There will be various ways to purchase after-IPO shares, according to Schuster.
Of course, this sort of sentiment is "power elite" approved. The same elites that are trying to create world government have a great deal invested in people believing in the stock market paradigm, certainly in the US.
Many of the top stocks are relentlessly promoted – creating a kind of directed history for investing that has little to do with the merit of the security and much to do with its importance to the ruling elites themselves.
Large companies in the Internet era such as Google, Facebook and even Wikipedia are said to have significant exposure to American Intel, which has putatively arranged funds for all. The 21st century seems to have seen an uptick in such activity.
Of course, countering this trend is the Internet Reformation, an enlightenment of sorts fostered by the Internet. In our view, people are increasingly informed about the various dominant social themes of the elites and the manipulation that these memes entail.
It is not clear to us whether the skepticism of financial advisors is linked to a larger skepticism about the markets generally and a dawning realization that there is much about current securities marketplaces that has little to do with free markets.
Conclusion: No matter the dollar amount involved in the Facebook IPO, we continue to see a growing realization throughout the 'Net alternative media about the realities of the modern market. The rejection of the Facebook IPO by financial advisors might be viewed as further evidence of this trend.
Posted by Joelg on 04/05/12 03:26 AM
Perhaps part of a new bubble to absorb all that money being created out of thin air?
Posted by onebornfree on 04/04/12 08:31 AM
Article: "Should You Be Licking Your Chops Over Facebook's IPO?"
Click to view link
Posted by cosmos on 04/04/12 06:33 AM
I don't trust a company that won't allow you to completely erase your data in their system. But face Book is just one of many. I don't speculate in stocks but if I did, they'd be very disappointed to hear what I'd give them for a share.
Posted by seer on 04/03/12 08:46 PM
"Sixty-five percent of the advisers surveyed said their clients are inquiring about investing in the Facebook IPO, but 80% of the respondents said they are not recommending the stock to their clients. - Investment News"
This is surprising indeed. Virtually all IPO's have gains on the day of their first offering. Most brokerage firms save these stocks for their best customers as they are usually a sure profit. It will be interesting to see the stock price on the opening day. If it goes up the advisers will be wrong yet again.