What is the best way to plan for buying Facebook stock when it is available?

[Ryan]

I am planning to invest upwards of $50K into Facebook stock. Is there any institutional stock broker I can sign up with right now or just buy it in open market once the IPO happens? Please provide me details such as which institutions I should reach out to etc.

[Jo]

Usually wealthy investors are given first crack at IPO through the brokerage house(s) which are underwriting the shares.

[JoeyV]

You don't know what price they are going to sell it for and you haven't taken a peak at their financials because they aren't out, but you're sure that you are going to drop $50K in the stock?

Are you always a complete moron or just about stocks?

[Steve D]

If you already have an account with $100K in it, reach out to your broker. If not, forget it. IPOs traditionally go to large institutional investors first and an offering such as Facebook will probably be oversubscribed, meaning that even these investors will not get all they ask for. Once these investors (banks, brokers, mutual funds) get their share, they deal it out to their best customers (large individual investors) who have asked for shares. Usually the large institutions are also oversubscribed, so these folks get less than they ask for. As noted, the large individual investors are the ones with large, frequently traded accounts - if you are just starting out with a broker, you won't be one of these people (the access to IPOs is a favor for their continued business).

The best you will do is a buy on the open market after market opening. Figure if you go this route, you will buy into the IPO bounce, meaning you will pay a substantial markup over the IPO price.

[Aesop Lutkus]

I highly advise you don't invest. The new facebook updates have made many users switch to Twitter. Sooner or later it could fail harshly. Mark Zuckerberg called a press conference saying that Facbook "has gotten out of control" and will be shut down on 15 March 2011.

[B. Weiser]

Go ahead and sign up for an account at any one of the large online brokers like etrade, Fidelity, etc. You'll need to have the cash deposited about two weeks ahead of time as it can take up to two weeks for your cash to be readily available for trading.

IMPORTANT: Set up a Google alert for "Facebook IPO" and set the category to "News", and the alert type to "Once a day".

You'll get a lot of alerts, but once Facebook announces an IPO, you'll be the first to know. Then you'll need to contact your broker (etrade, Fidelity, etc.) and let them know you'd like to be included in the IPO. They'll direct you on how to apply to the IPO.

Good luck!! I'll be there with you in this one, too!

[Eddie W]

There is no such thing as best way to plan to buy a stock. However, you have to get yourself prepared meaning make sure you have opened an account with a brokerage and the money is readily available. Any long-waited company shares are usually going crazy in it's first trading day. No one would have anyway of knowing what's going to happen in the stock price subsequent to that. You have plenty of choice whether to jump in on the first trading day or wait until the dust is all settled.

Be prepared for the nature of stock investment - whether you have or have not bought a stock, have or have not sold a stock, at some point, you will regret it.

[David]

Take a look at Zillow, down 50% in 9 days -- opened at 60, now trading at 30 (your edge in real estate).

Hmm, how about Groupon (GRPN)? It almost got cut in half the first week, but came back to 19 when this rally took hold, from an opening price of 26.

It's actually good to be terrified of your short term trading, it's healthy...

LinkedIn Corporation (LNKD) trading at 68 from it's first day high of 82, in less than one month.

Take a look at the red hot social IPO, Pandora Media, ticker symbol P, down 57% from it's public offering in 5 weeks. Look at the first day of trading compared to the last month of trading in LinkedIn, and yes, they both appear just about identical - - suckers buying at the top on IPO day and then just getting hammered.

People never learn. Ever.

Facebook will indeed come out, and fall instantly, and the most ferocious bear market of the past century can finally begin in earnest. The lawsuits and recriminations will begin, and drinking it all in will be the most fun you can have with your clothes on. I'll bring the popcorn.

Edit: Here's a good article on the Zynga IPO
http://seekingalpha.com/article/311987-h...ynga-s-ipo