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Street One Financial President Scott Freeze on how investors can invest in Facebook while minimizing the potential risks.
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All right Scott phrase says that you can play FaceBook long term and limit your risk Scott is the president of street one financial.
And he is here and Fox Business exclusive.
So that you at times is reporting on kind of the debacle -- called angle with regards to what happened with the with the IPO on Friday reduce say.
If we do want to get into it there's less risky ways for -- to play.
FaceBook what do you tell our viewers that.
Right so looking at FaceBook is a play from the ETF side.
Where if you agree that it's overpriced and you see this -- -- we've had in the trading of it.
-- -- two ETFs that are coming out and then in the near term that are gonna -- FaceBook shares the first one is as -- social media TF from global -- the second one is the first trust IPO index which is have PX.
That the SO CL it'll be on Tuesday.
And the first trustee Jeff revealed Friday that -- actually QE FaceBook shares and hold them within those ETS probably -- -- percent weighting.
Right it's incidental there's a wait and see anxious for the questions that come -- on Friday is recovering the initial launch of the stock was.
When does -- get added to the major indexes as the NASDAQ-100.
What is it going to the S&P 500.
So while these funds -- adding it now when the big boost in -- dot com when they move over and of those major indices.
That ideally it would however DST it will not add any thing within six months of it coming out.
NASDAQ only does the rebalance once a year and -- politics two years until it starts that anything in.
Well what is also talk about that because -- fears may not be familiar with us what exactly what are the rules basically.
First for the NASDAQ-100 what does the rules to getting FaceBook into that because again if I'm buying it now whether it's.
While my owner thirty trader I'm buying an have been a fund like -- recommending.
A million a boost when that thing it's added right.
Ideally after buying and -- 34 and get sedated 25 you're still down -- -- what's the criteria -- -- criteria for -- for the additions for NASDAQ.
Then it's not at the hard and fast set of rules it's more guidelines and things that have -- -- before can occur.
NASDAQ can determine that -- want to add that there would it generally has to trade for two years before they'll even decide to put it in it has been non financial obviously FaceBook qualifies.
And ask you list on the NASDAQ -- obviously FaceBook qualifies figure still looking at a very.
Long range before it would be added to the QQQ.
OK so and they also that would have to drop a stock out of the NASDAQ gripe they were gonna stop the hundreds album and put FaceBook in -- one of them to lower -- stocks that are in right now that could affect my portfolio and a negative way depending -- What they do what about the S&P as well as it -- -- Isn't the same criteria I think it's different S&P it has -- for at least six months it -- US based.
Obviously FaceBook -- secretary bit.
It's more of a determination that the index managers make as to whether or not they wanted to go into the index of its extremely volatile.
If it's lower priced -- -- really runs up in price they may decide not to added because some might not give them the -- -- that the SP has now.
Well let me it will obviously -- yet.
To get used to prevent a market cap they made that ruling still human eye opener exactly what it's about what can be -- academic and a commercial break -- with ETFs and obviously you wanna get some exposure to a FaceBook eaten many of our viewers do.
Like global solution he would adding that fund for example but not I'm more actively managed of the choices that you gave us.
Which one of those is actively managed and could be hiring -- -- -- DS of CL and most ETFs are going to be based on an underlying index.
So VS -- CEO and and the first trust ETF both have very standardized rules that they have to follow.
So neither one is technically actively managed they're just following the index methodology that they have.
There are -- number of actively managed ETFs that are out there.
None of them have become very popular today and they would obviously have different rules where almost like hedge funds -- whoever runs the ETF would decide that they want to hold FaceBook within that.
Do you haven't.
A preference of that though Ponzi you've mentioned do you have one that you like better than the other -- give a favor and against.
Well I think it SO CL out of the two because that you've seen even today with FaceBook getting killed it is still up on heavy volume.
Oppressed people trying to get him because when they add -- spoke on Tuesday it'll be at a greatly reduced price from the IPO.
So it's any traits more so it's it's probably better for retail investors in smaller institutional investors to get in there.
He made another and -- -- about FaceBook IPO he says -- for Zuckerberg.
Straight for Zuckerberg happening underwriters Stephanie underwriters Morgan Stanley you can.
And it's interesting take -- -- Kris thank you very much for coming on talking about FaceBook always do it very important Republican take a look at that big he's got thing.
