By the time this is read, the biggest, hottest IPO in years will have opened and there will have been a nice pop for Facebook. What happens in the next few hours is in the lap of the gods but one thing is for sure, trading volumes will be giant.
Investors that haven’t bought stocks in years will be there throwing their $10,000 chunks into the social network’s equity.
It will be a carnival.
The reason for Facebook’s success, is the same reason that the equity markets are no longer the preserve of the private investor. So many investors appear to have no idea what they are doing and are lambs to the slaughter. Eventually they are eviscerated. It is tragic.
That doesn’t mean the Facebook will ‘do a Groupon.’
Facebook may well enjoy its moment in the sun, but I fear the long lost private investor returning to the market to buy a piece of the Facebook dream, will be shorn again in due course.
It seems to be, in the very bones of the American market, to hugely overvalue certain kinds of stocks. It happens time and time again in an ever repeating cycle of boom, bubble and bust.
People seem unable to understand the idea of ‘value’ for these select market stars.
So today in Tokyo I was on my way to a meeting and I passed a fruit shop.
There was a nice looking Mango on sale.
The mango is $271. I doubt there is one American that could accept that a mango could be worth $271. How could it be when you can buy 8lb of Mango for $10 at Costco.
Here is a $106 watermelon.
Of course you may have read my belief that Apple is far too highly priced. He is a relatively reasonably priced apple at $15.89c each. Clearly the Japanese think its worth every penny.
I don’t wish to bore but a box of cherries for $275 can seem a temptation too hard to resist. Their flavour must just be amazing. They must be easily 30 or 40 times better than American cherries. You would be an idiot not to understand that.
The last image is of Oranges. A snip at $20 each. Imagine your morning OJ made out of these fellows. That would just totally energise you. Who needs cheap Oranges in your OJ when you can have these fantastic fruits in your fruit salad portfolio.
Now I don’t think I’m going to find it hard to convince you that these luxury fruits are just way overpriced.
Likewise I would find it very hard to convince the many Japanese buyers of these fruits that there wasn’t something necessary and magical about these products.
However I’m sure you, gentle reader, would try. As such I’m going to say,
Facebook is a $275 Mango.
Just like in this Tokyo store the American market has a wide range of juicy fruits to select and enjoy. But enjoy them while you can as they will go moldy and as you walk out of the store with your vegetal treasure and see the salesmen bow in honour and happiness at your savvy purchase, you might wonder why they aren’t sad they have lost their precious mango in exchange for something as base as money.
Meanwhile I’ll shop at Costco.