This story was originally published on Feb. 1, 2012, but given today’s Facebook IPO, we thought we’d re-run it. – The Eds.
Rumor has it that Facebook is set to file an IPO in the near future. No doubt, this will be a big deal. Not only is Facebook omnipresent in our social lives, its also helping shape our economy. A few months ago, a study showed that Facebook apps have created 182,000 jobs worth more than $12 billion. So is investing in Facebook a good idea?
Well, maybe, according to Gerard Hoberg, associate professor of finance at the University of Maryland. In the pro-column: Facebook is already huge, and it seems like it’s here to stay. And word on the street that Morgan Stanley is underwriting the IPO. “History shows that IPOs underwritten by strong names… tend to be successful investments,” Hoberg points out. But the big question is growth. Is it possible for Facebook to get bigger than it already is? “How much upside is left?” Hoberg wonders. “Although the first day return for Facebook will likely be substantial, its long-term outlook may be average for the industry.”
So invest or not, as you see fit… but prepared for a whole lot more Facebook in your future.