Facebook IPO: Great Company vs Great Stock
By: 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.”
“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
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CNBC.com with wires.
