Look at the facts: One — Facebook is well capitalized. It does *not* need money to fund operations or *any* planned growth. (Which by the way, are the only valid reasons to IPO). What this means is that the principals are looking to cash out. Why now?
Two — The rate of new users joining Facebook is *slowing*. The star is already starting to wane.
Three — The roadmap includes things like “exansion into China”. It ain’t going to happen. There are too many (very well documented) FBI, CIA, NSA connections with Facebook. The Chinese government has already raised the red flag.
Four — Twitter is eating their lunch already with the under 18 set and Twitter’s new foreign-government-friendly policy has positioned them *much* better for international expansion. That’s bad news for Facebook.
This IPO will be good for a short term pop — *maybe*. But too many smart people are already sounding the alarm on the question of “Why IPO when you’re already cash rich?”. And Facebook has ZERO good answers for that. This looks and smells exactly like a get-rich-while-we-still-can strategy.
Yes, it will work. But not for the bagholders who buy the stock.
- popo
