Let me preface this post by saying that I’ve never bought stock in any individual company and I don’t have any stock market expertise. All I know is I need to keep my 401k diversified and that has proved fairly successful for me.
So basically, I’m like most Americans, yet I’ve seen clips on either the local or evening news were regular people are planning to purchase stock in Facebook when it goes public this Friday. I guess this might be a sign the economy is improving, at the least!
But, I can’t help thinking about when I entered college and there was a guy I’d see in the library buying stock online. At the time, I wished I had money to do the same thing, but I was so glad I wasn’t part of the “dot.com bubble” burst. I did manage to lose money in my first 401k which truly sucked, since I barely had any money as it was. It was still amazing how many people bought stock in companies and exposed themselves to so much risk.
Again, I’m not a professional investor, but I can’t rationalize purchasing stock in Facebook because I don’t believe that companies who advertise on the site see more of a benefit than advertising on television or in magazines. First of all, I don’t pay much attention to the ads except when I realize that the ad is for something I previously searched. More than anything I find this annoying.
Shouldn’t their system be able to suggest a product related to something I already searched instead of regurgitating sometimes the exact products I clicked on in another website? But, that’s not what Facebook’s algorithms do or at least not on my page.
It seems Facebook’s stock will probably rise above the initial offering price, but over time, I don’t think people’s investments will earn much money if any. Naturally, I hope this isn’t the case and that Facebook will be able provide a better platform for advertisers if that is how the company wishes to make money.
This morning I heard a story on NPR about General Motors discontinuing their advertising on Facebook, so the sooner the site can work on the issue the better, especially for their future investors.