FACEBOOK IPO PRICE PER SHARE…$38.23 at the close. All the hype…is it worth it, swing trading?… We’ll know in the year 2020
Click on the chart...FACEBOOK IPO MAY 18th, 2012 closing price $38.23
Chart complements of Google Finance
I wasn’t exactly sure what the success rate of IPO’s were but what I did know is… You don’t buy them…plain and simple. I decided to Google the keywords “success rate ipos” and looked at the first page that was on the search engine. The web page that I ended up reading was The Motley Fool’s discussion board. The Motley Fool discussion board
Someone asked about the average risk when purchasing an IPO.
The reply was a paragraph taken from a Motley Fool article in 1999…the last round of ridiculous IPO’s…Click Here to see it.
“On average, IPOs make bad investments. A study by two university professors a few years back looked at 4,753 IPOs and 3,702 secondary offerings made between 1970 and 1990. In the six months following the offering, IPO firms lost 1.1%, versus a 3.4% gain for matching firms that made secondary offerings. The new issues continued to underperform over the next three years, with the gap narrowing but persisting well into the seventh year following the IPO. During the 20 years covered by the study, the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms.” The Motley Fool discussion board
The date of the question was May 4th, 2008
Interesting.
Like I said earlier, in my opinion you just don’t buy IPO’s, odds are against you. I have to mention that Mark Zuckerberg’s Facebook has a good future to look forward to, everybody but me is on it, I have thought about it, but I’am not too concerned about what the people are doing, who I knew 20 years ago. I have to admit that it’s a great marketing tool, but so is Google. I’am not going to speculate on what the share price is going to be 7 years from now but there is a good chance, an excellent chance that the Mark Zuckerberg’s FACEBOOK PRICE PER SHARE ends up with the same fate as all the other IPO’s of the past. The share price goes down over a period of time, 5 years or so and then the leader companies, the companies with the innovative ideas rise out of the ashes and go to new highs. There’s a good chance that I’ll be owning Facebook shares in the future when they are trading for between 1 to 3 times book and a PE of 10-1 (or so). I would also like to see FACEBOOK’s PRICE PER SHARE showing a nice rounding bottom on the charts taking a couple of years, building up momentum to slingshot it’s way to new high’s. Mark Zuckerberg is a Harvard student, so therefore he’s no dummy, I think he’ll do well in the end as long as the Wall Street henchman don’t slaughter him financially and emotionally. Time will tell and the structure of the company will be reflected in the Facebook’s charts.
Ok, enough of the FACEBOOK IPO PRICE PER SHARE hype, let’s get to the meat and potato’s of the financial markets.
Click on the chart to see...Russell 2000 May 18, 2012 head and shoulders...target zone
As you can see we’re not too far off from the the target zone. I get that target zone from measuring the top of the head to the neck line, you then take that distance from the neck line and extend it to your target zone, easy. The head and shoulders formation doesn’t work if everyone notices it on TV, just like all the other text book patterns that are hyped about and never happen. The reason for the pattern not unfolding when everyone is talking about it is because everyone is on one side of the trade, waiting for the pattern to unfold, there’s no new money to make the pattern fulfill itself. The pattern then goes against itself taking out everyone’s covered positions, adding more fuel for the market, against the pattern. You can see last weeks setup here. Swing Trading Forecast.
There are a couple of pivot points coming up but they are somewhat small in nature.
- The next pivot point is next week, May 23rd.
- Another pivot point due the week of June 7th
- The pivot point after that is the week of June 15th
- Marting Armstrong’s forecast from his Economic Confidence Model starts June 7th. Last weeks article. Swing Trading Forecast
Remember, the patterns have to justify the pivot point dates. June 15th should be a low point in this correction until December 4th, we’ll have to see when that time comes.
Click on the chart to see...HUI Index weekly May 18, 2012 Center line of a channel
The above chart is the HUI index or otherwise known a the Gold Bugs index. I’ve been waiting for some time to buy some gold miners. Just a note, I won’t be giving advice on particular stocks to buy or not buy, I’am only going to discuss the overall market and since the majority of the stocks out there trend the same as the overall financial markets, you can pick your favourite and run with it. It’s a lot more fun buying stocks than selling short, selling short is good too because it’s fast, but you make more money going long. About the only sector right now that’s beat up enough to buy are the gold miners. You can’t see it in the chart above, but around midday I thought perhaps we were going to see a hammer candle sitck on the weekly chart, but that didn’t happen. So I didn’t buy anything today.
Click on the chart to see...HUI Index daily May 18th, 2012
Zooming in on the HUI index/Gold Bugs Index you can see the channel and the target date, June 15th.
Things are going to get interesting.
Summery…It’s my opinion that FACEBOOK IPO PRICE PER SHARE hype is a sign of something, usually a market top. I’am still long term bearish but the financial markets eb and flow in their own way, the financial markets in a chart is a picture of a living being full of emotion. The pivot point coming up is a trading opportunity and nothing more. I’ve mentioned before in my articles that we’ll see a sideways market with a collapse in the end, I still think that’s the way things will unfold but there is no way of being certain. In the mean time the chart patterns and the Swing Trading Forecast model will be my guiding light for all the market probabilities.
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