Question about investing...?

[Okla State Alum]

I just saw that Facebook filed for a $5 billion dollar IPO. However, I want to know: is it really smart to invest in social networks?

I don't really do any investing, but it seems like the very nature of a social network would not make it a viable investment.

Sure, Facebook is popular now, but I bet 5-10 years from now (maybe sooner) it won't be so popular. Why then, would someone tie money up in it? Is the idea to make a quick buck by buying now and selling before it declines in value?

Also, what if it doesn't increase in value? I would think that with something as volatile as a social network, there's a huge risk in investing.

[Mike]

OK, let's suppose it won't be popular in five years. What's stopping you from selling your investment in three years?

Not saying it's a good investment. Personally, I would want to review the newly-published financials first. But remember, people were saying the same thing about Google when it first went public.

[Lil Job Creator]

I hope Facebook dies in this decade, but it probably won't. I wouldn't buy any shares of it.

[FLSwampBoy]

It depends on what Facebook does with the IPO investment. The social aspect of Facebook is just today's view of the business.

Google was just a search engine. With multiple cash infusions, they have branched into many different types of revenue producing businesses.

[Henry Rearden]

No. As a rule, I tend to only invest in companies that actually produce something, such as Exxon with oil or Boeing with 747's.

Also, the Facebook IPO will see wildly inflated share prices, which may very well see a downturn when the hype subsides.

[Onlooker]

People usually invest in individual stocks only after they first have investments in mutual funds, which are a way to diversify so the risk of significant loss is less. Generally, when one invests, they invest for the long term. You have to hold the stock for 2 years in order to pay the 15% tax rate on gain, rather than a regular income tax rate, so if you don't think Facebook will be growing in a couple years, it's probably not a good idea to invest. If you're going to invest, consider a mutual fund first. Once you have a sizable investment in that, then you can risk investment in an individual stock. There will always be companies to invest in.

[hi.]

I am not investing in facebook right away because I feel that due to its hype the price of its stock will be higher than the real value of the stock.

Only time will tell I guess.

[teenymother593]

Is the idea to make a quick buck by buying now and selling before it declines in value?

-yes.

A friend of mine could not wait to jump into GM when they first issued their IPO. I told him over and over and over and over, STAY OUT OF IT!

He bought in for ?? $37 a share.

24.37 0.35(1.46%) 4:02PM EST|After Hours: 24.35 0.02 (0.09%)
http://finance.yahoo.com/q?s=GM&ql=1

"awe dude! they are gonna make so much money! and I only buy amurikan."

[roundchin989]

I have been blessed to have friend in the investment business that has stopped me from doing investments such as you mentioned. Every one of them went belly up. It is well worth seeking
professional help. They study it all day. He is the reason I will get to retire in 5 to 8 years comfortably despite Obama. I help him back in other ways. The fees are nothing compared to what you can lose.
Stay away from the big bank investment offices. Use real brokerages like Merrill Lynch or even better Ben Edwards and Co. Hope this helps.