Originally written on Obsessed With Sports  |  Last updated 10/29/14

RDM welcomes us to the weekend each Friday. Additionally, you should know that OWS (which is a strong buy, by the way) sometimes strays from commenting on the latest sports news. This collection of literary brilliance can be found in the Free For All section of OWS. 

When I was signing up for thefacebook.com from my freshman dorm back in 2004, I never thought that Facebook would have the second largest initial public offering in history. That October — nearly 8 years ago — was when many of my generation first signed up for the service which was only in its infancy at the time. Mark Zuckerberg, the company’s CEO, was also in a dorm room in October 2004. Since the beginning Zuckerberg has always claimed that his intent was never to create a massive corporation. Of course, at times he very much questioned if Facebook would be taken public anytime soon.

Well, that day came today.

Facebook will raise $18.4 billion, which is the second largest IPO in U.S. history behind Visa’s $19.7 billion offering in March 2008. Facebook is now valued at over $100 billion. I’ve seen comparisons made to Google already today. In 2004 Google’s IPO raised $1.67 billion. However, what I haven’t seen some publications point out, the style in which Google auctioned off shares was a bit different. And, additionally, Google’s IPO price of $85 per far exceeds that of Facebook’s $38 per share, or any of the other biggest IPOs share value.

Still, with that caveat being states, Facebook’s initial public offering is monumental.

However, during today’s trading the price has reached as high as $45 early, but come back down to below the actual opening price of $42.05. What gives? Some market analysts were forecasting as much as a 50 percent jump today.

I’m still in research mode, but I can’t argue with anyone who is calling FB a buy. Although I did find this to be interesting; FB’s IPO price was equivalent to over 100 times historical earnings. For comparison Apple’s is 14 times and Google”s is 19 times.

Revenue (and revenue growth) is actually the problem? Weird. Didn’t we think the Facebook was rolling in cash money? Well, they are. But there are questions.

Here’s one; how do they truly monetize mobile?

Mobile is everyone’s future, and as of today even Facebook is having a hard time monetizing their mobile platforms. In the end, this is where the rubber hits the road (and where you decide if you’d “Like” to buy or not). If Facebook can increase ad revenue via mobile — they are golden. However, if they struggle, the company could be headed to a Yahoo! like decline.

In conclusion, Facebook’s biggest value seems to be way down the road. This, oddly enough, seems to argue for Facebook’s stock to be one you hold onto for years to come. One unanswerable question remains — Will the price sink a bit lower in the short term? When do you make your move?


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