|Written by Rob Goldman|
How Facebook Affects Your Stocks
For the uninformed, Facebook is going public on May 18 and based upon the suggested range, it looks like it will be valued at just under $100 billion.
Investment banks and even unaffiliated analysts are readying promotion. Institutions are preparing their indications of interest. The retail public wants in. Companies in related fields, directly and indirectly, are working on news releases that will coincide with Facebook’s trading debut, in order to ride the giant’s coattails.
Let’s start looking at the promotion. The underwriters are certainly going to be very positive on the stock and probably believe that if it is valued at the top end of the range, $96 billion, it will jump at least 30% if not more on the first day of trading. Analysts at sell-side firms (investment banks and brokerage firms) are going to universally bullish, or at least very close to it. When a Facebook comes along, the lucky analyst that gets the nod to cover almost has no choice (logically not by coercion) to be outright bullish. To hell with metrics, valuation, etc. It is an undisputed leader, will be owned in large chunks by clients and in the future may choose to do business with the firm you represent.
Random Thoughts, Plus NVLX & LIGA
Ok, the market is terrible. Worst week of the year. Brilliant observation, Goldman, right? Here are the important takeaways of the recent past and near-term future…
On the home front, joblessness will not go away anytime soon, and neither will the poor real estate market. The biggest surprise and indicator that we really may be in for anemic growth again? The huge drop in oil prices. Watch it closely. If it persists it will take the market down with it but might reach a level where the market bottoms faster, providing a good re-entry point…
I saw The Avengers twice this weekend. It rocked. Cost me nothing. It was streamed on Justin.tv by who I assume was someone in Europe. Why? Someone was streaming it and another movie that hit Europe first earlier. I actually saw a bit of it mid-week. Awesome website. Regardless, the ridiculously large first weekend box office sales will help Disney’s stock (NYSE—DIS) which reports Tuesday….
In case you missed it…
Nuvilex, Inc. (OTCQB—NVLX—$0.0695) announced it has signed a consulting agreement with Dawson James, which is a well-regarded investment bank that has had success in guiding early-stage biotechs. This should be viewed as the final stage before the SG Austria closing…
LIG Assets, Inc. (OTCPK—LIGA—$0.08) is turning into the gift that keeps on giving. On Friday, LIGA announced it has selected a transfer agent for the distribution of SuiteMagic (SM) shares. SM is expected to file an S-1 for an IPO this year. In a surprise move, management also stated that 2 more similar dividends for other firms are in the offing and the Company may even declare a one-time cash dividend. What a deal for investors….
Until next week…
Analyst: Robert Goldman
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