-BO- wrote:
What kind of fundamentals did Google have when it went public in 2004?
I wouldn't touch Facebook at present, but I'd bet a lot of doughnuts that it way outperforms the overall market over the next five years.
BO
I love Google. I use it every day. It costs me nothing, and I totally ignore the commercials that I have to tolerate while I'm using it.
However, that isn't the question here. Google pays NO dividend to it's shareholders, and is selling at a price that is approximately 20 times what they earn per share. Why would someone buy this stock...? The only possible answer is that
"it's going up." Yeah, it probably will keep going up. However, with a stock that pays no dividend the only way you will make a penny out of your investment is to SELL it for more than you paid for it. However, how can anyone ever sell it as long as it's going up? (If by luck a company gets bought out by another company for cash, the shareholders might be forced to take a profit against their will.)
"I wouldn't touch Facebook at present, but I'd bet a lot of doughnuts that it way outperforms the overall market over the next five years." (Quoting Bo.)
BO, I ain't taking that bet, but you don't need me to place it. It's real easy, there are a gazillion brokerage firms out there that will be more than happy to sell you as many shares of Facebook as you want to buy.
You might take a second mortgage out on your house, place your bet on Facebook, and win so much money that you would never have to work again, but there is another possibility that isn't quite so good. My post that you are responding to was to warn people that there are risks to investing in IPO's, not that people couldn't make money speculating.
p.s. I'm not going to waste my time doing it, but if someone with nothing better to do, wants to look into it, check out all of the IPO's that came to the market during the "Dot-Com" frenzy, and how many of them worked out.