Investing in Facebook is something a lot of investors are looking to do. It can be profitable, but you might have to wait. The reason is, the IPO (initial public offering) has not even occurred yet.
It is only for investors who have a net worth of $1,000,000 or more and who make at least $200,000 a year. In addition, they must have experience investing in private firms. If you meet this criteria, you can invest.
Even if you do meet these qualifications, you often still cannot get any Facebook stocks because the first priority is the mutual fund companies. Investment banks are the ones that bring firms public, and they have to sell the shares to someone. Many of them first turn to mutual fund firms to get rid of most of the shares, since they know these companies will buy up a lot of them quickly.
In other words, it is more effective for them to sell to a mutual fund company than it is for them to market to individual investors. They are the last resort. Often times there are not any stocks left from the IPO for them to buy. In other words, you will probably have to wait until the stocks hit the NYS exchange or Nasdaq before you can invest. However, at this point, the price is often double or more what it was during the IPO.
Eventually the price will come down. However, at first it is often inflated because many of the mutual fund companies and other investors holding the IPO have yet to sell their shares. The precious few that do come available will be bought very quickly.
Therefore, you should wait a little after the stock has been available on the exchanges before buying. This is the best strategy for obtaining the lowest price. If you buy too quickly, you will likely end up overpaying.
Investing in Facebook could be a good idea. Just make sure you use patience and wait until more stocks are hitting the market. At this point, the price should come down some.