Thursday, 17 May 2012

Facebook IPO Price Announced. 38 Dollars a share. Could it go to 67 Dollars tomorrow?

Facebook Nasdaq IPO opens tomorrow and so tonight they've decided on the price per share.
38 Dollars. I predicted 37 Dollars (not bad, eh), which will bring in 16 billion. 
It is the biggest Internet IPO in history.

Bono will make about 176m Dollars on opening.

Remember they started with an indicative pricing range of 28-35 Dollars. On Wednesday they revised it up to 34 - 38 dollars. A typical play to show the market that the shares were so well demanded, they "had to" push up the price. And of course, the demand is clearly there.

At that price this is going to shoot on Day one 30%+ and you'll see some selling day one as people flip it for a short term profit.

My blog of May 5 said and right now, I'm standing over it 100%. Now that I know the price, convinces me here's part of  that blog again if it helps you (but you can read it in full on the right hand side):

Facebook IPO. Could the Share open at 37 Dollars and go to 67 Dollars? 

1. Share Price will open at 37 Dollars (higher than the indicative band indicating early interest to the market....and, of course (!), giving early institutional investors an immediate profit).

2. On the day it floats, it will open to huge demand (very bullish) and over the first 2/3 days, it will then bounce and climb to circa 67 dollars (60 usd+ anyway). A 30% gain on the first day would bring it to 48 usd alone.

No one is saying anything like that (in fact, good traders tell me that I'm mad...we'll see) but I know Facebook will go past the magically 100 billion usd valuation mark easily (1st day) and well past it. They'll want that to get headlines.

3. It will then stabilise and then you'll see profit taking on a grand scale. So selling (bearish) at the 60+ usd mark. A Bear attack?

4. That'll bring it down quickly and as the market sees that trend they'll short it, to I think what will be the real long term price of 45 usd.

The opportunity is over the first 1 or 2 days.

Buying at 37 usd and selling at circa 50 usd seems to me anyway, a play.

This pricing is indicative of exactly what I was saying on May 5. 

It's perfectly placed now to explode and whilst I suggested 67 Dollars as a high, I'm practically sure of it now and I might be low....Mad isn't it?

Get ready. Get set.
Circa 11am New York time with the bell ringing going on in Facebook's office (unusually) in Silicon Valley.