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David Menlow, IPO Financial.com president, weighs in on Facebook's excepted IPO filing this week and when investors should try to get in.
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Joining me now.
We have David -- -- he is the president of IPO financial dot com he's been handicapping IPOs for twenty years does FaceBook have the G.
Yes it does have the -- sport you have to have that advantage position of getting -- at the IPO.
Otherwise it's going to be about breathing rarefied air.
Average investors cannot get into the IPO until what day to day three at best well -- -- They can get in but if they do they're going to be in a volatile storm that they're not going to be able figure out what price they pay for -- maybe a couple minutes later.
Volatility day one -- dates here I mean because what you've got all you got excel partners they're gonna cash out there are -- -- -- potentially make.
A few billion dollars of a twelve and a million dollar investment you've got you deploy each you've got Zuckerberg you've got Goldman -- go Morgan Stanley.
All of these players play first the average investor -- it is about the way this is gonna go down.
That is what we still need to CVS one filing to see whether or not those early investors are in fact gonna be bailing out of some of their position or if they feel that this company can really taken up a lot more.
Let's talk about some of the I think some of the companies they we are now comparing face but you on a valuation.
Basis whether it's Amazon whether it's McDonald's.
That's been written about but also this would make -- the fourth biggest IPO since the general motors' IPO a since AT&T I mean these are big names.
-- so I mean piece of what went public that the time was a monstrous IPO.
Distaste -- in your opinion what these other company.
-- it's a tough scale to -- -- come up with a ranking that's relative to that I can put a little bit of a different kind of prospectus on and if we go back to the Google offering.
They raise one point 65000001.
Point 65 billion dollars worth 123 billion dollar valuation.
Or over eight years there are 286.
Billion so it's an eightfold increase in here we are talking about seventy billion dollars for this offering.
Which could possibly -- 440.
If the stock -- at the opening.
You know if you took if you look back -- what was happening -- Mark Zuckerberg is like back in 2004 he was a storm and -- FaceBook Google was going public what did we learn from the Google IPO in particular because you look at Google.
You look at Yahoo! where those companies are now once a strong story one many say is not.
What does Mark Zuckerberg have to do to deliver to the Wall Street -- gang who was gonna be very tough.
On I think there's an axis perception that has to be given to the street.
People feel of vertical growth pattern of taking the 800 bit million users to 900 to a billion users is the only way they're gonna make money.
Everybody's got to stop looking about at that because you're gonna have attrition as people get tired of putting the -- in the -- every night for hours at a time.
This is going to be a horizontal.
Expansion of the revenues so they're gonna squeeze more money out of each individual user.
-- he does not prevail.
Well -- that's your line here yes OK well we shall see what when this -- comes down -- -- thank you very much.
