Photo: Getty Images/Rob Carr
According to a friend whose father-in-law is a financial advisor at one of the country’s major brokerage firms, mum-and-pop demand for the stock is intense.
“He has never seen such demand for an ipo.”
And who wants to buy it, exactly?
“The people seeking it out are the wealthy, elderly women in his clientele. His clients largely sat out Internet boom last time (except for Cisco, Worldcom, etc.) but they all know FB and love it.”
In other words, Facebook’s users want to buy the IPO.
So this is a classic case of individuals trying to follow Peter Lynch’s famous advice and “buy what you know.”
Of course, everyone knows Facebook. And this “everyone” includes not only the rich older women clients of the financial advisor but the teenage daughter of this man, who wants to bet her college fund on the stock.
As we’ve said, Facebook is “muppet bait.”
Does this mean that the Facebook IPO is going to be a disaster that will screw millions of investors?
At least at the currently contemplated offering price, ~$104 billion, there are some scenarios in which these mum-and-pop investors could get a good return.
But there are also a lot of scenarios in which they could get clobbered.
So, at the very least, we hope they understand that.
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