I Hope You Didn't Get Zucked On Your Facebook Stock!
By Lance Winslow
Well, as if anything couldn't get any worse for Facebook's stock there might be more challenge down the road - consider if you will that Goldman Sachs is now allowing you to borrow their shares on margin to short (FB) Facebook. The 10-days are up since Facebook's IPO and now anyone can short the stock, of course, you can't naked short the stock without risk, so you'll need some shares. Let's discuss this shall we?
So, has Goldman Sachs had enough of sitting on the sidelines watching this fiasco unfold like the rest of us? That might be a good part of it, or it might just be sour-grapes as Morgan Stanley took the lead on the IPO? Hard to say, but Facebook's IPO debacle leaves so many with egg on their face now as the accusations and lawsuits fly. NASDAQ may indeed, or at least indicated that they "might" make some investors whole for what went on that day, as congressional hearings loom and the second largest IPO and biggest IPO failure in history stalls the IPO market perhaps for months into the future.
Personally, I hope you didn't get "Zucked" on your FB stock, which is a newly coined term, obviously a play-on-word off of the Founder of Facebook's last name "Zuckerberg" but if you did buy in or were recorded as buying near $45 per share, things could get even worse, as the stock was down to $25 and change per share on the ninth day of trading, ouch! Oh, and CYA - this article author does not own any Facebook stock nor does he participate on the Facebook social network.
Facebook had a string of negative PR after their historical IPO, for instance the recent admission that many of its social networking teens were actually under 13-years old, and that the company wanted to harvest more younger people for the site? Why you ask, well I suspect to sell them breakfast cereal, toys, video games, etc. and of course many parents are outraged by all this - and investors are looking pretty silly and pathetic in the process if they are holding shares now.
Worse, some analysts are saying that 13 is not for the average age of their future target market. Yes, kids need a place to play, although one has to ask if the digital social networking space is the right place.
Still, even if Facebook started out bad, that doesn't guarantee it will end that way, many an analyst, as well as those inside the company realize that internationally they are still doing fine, even if not every social networking teenager and college student in the US is still so enthralled. What does this mean for the stock? It was off to a rough start and time will tell. Please consider all this and think on it. Remember CYA: I am not a stock market professional analyst and all stock decisions must be based on your own due diligence.
Lance Winslow has launched a new provocative eBook on Stock Picking Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net
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