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Facebook IPO: Great Company vs Great Stock

Thursday, 10 May 2012 | 1:41 PM ET

Ahead of the Faecbook IPO, famed tech investor Dan Niles reveals how he’d trade Facebook, when shares go public.

“In that first instant I expectFacebook will trade at a ridiculous valuation,” he says. “I’d sit back and see where it settles.”

“Remember, there’s a difference between a great company and a great stock,” he tells us. “If you look at Groupon, LinkedIn and Zynga – they came out and from day 1 to a month later you lost from 20-40 percent.”

Ways to Play Mobile Theme
Forecasting the health of the tech sector over the next year and discussing which mobile stocks to buy, with Dan Niles, AlphaOne Capital Partners; Pete Najarian, TradeMonster.com; Anthony Scaramucci, SkyBridge Capital; and CNBC's Scott Wapner.

“And all those companies (listed above) are all growing faster than Facebook on a year over year revenue basis -- and yet they all came down.“

However, he adds, once the dust settles, he’ll weigh valuations. “Long-term Facebook is a great company,” says Niles.

Other Tech Trades

Along with Facebook, Niles has a handful of other stocks on the radar – all of which are related to advances in the mobile Internet.

He believes smart phones are at an inflection point – and his strategy is to invest in the transition.

In the space, he likes the following:

VeraFone
Glu Mobile
Microsoft

“There are 5.6 billion people in the world with phones – and only 800,000 are smartphones. 3 years from now they will all be smartphones,” he says. And the companies mentioned above stand to benefit most.


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Trader disclosure: On May 10, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Anthony Scaramucci is long GS; Anthony Scaramucci is long DELL; Anthony Scaramucci is long PEP; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long MSFT

For Gene Munster
Piper Jaffray makes a market in YHOO

For Joel Greenblatt
Joel Greenblatt is long HP
Joel Greenblatt is long MSFT
Joel Greenblatt is long AAPL


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