Things have certainly calmed down since May 18th when I spent almost two straight hours on the phone talking with folks about Facebook. It was THE thing in the week leading up to its IPO and it seemed like everybody wanted a piece of the action.
At the time, our advice was to be “cautious, not euphoric,” because there is usually something that can be said for not following the crowd when it comes to investing.
By now, we know what happened. To call Facebook’s IPO a “mess” would be an understatement. After briefly passing $45 on the first day of trading, it took FB just two and a half weeks to fall 43% to $25.52. All of a sudden, nobody wanted it.
Then a funny thing happened. Facebook’s stock started to rise, reaching $33.43 at one point Friday, June 22, 2012, an increase of 31% since hitting bottom in early June. As of mid-afternoon Friday, FB had risen just over 4% for the day alone.
Now, I am not saying that just because Facebook’s had a nice run that we should all start to “Like” it. The point is, when you follow the crowd, it can be tough to make money.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author’s opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).