As I sit here waiting for the Super Bowl rematch I can’t help but think of another big game that is about to begin. What so many momentum traders have been waiting for a chance to do: buy Facebook stock on the open market. If current trends are correct this will be this decades monster stock. Trading under the ticker $FB, Morgan Stanley will be bringing this stock public in the second quarter of this year.
This is not just another initial public offering, this is a stock that has future earnings expectations that the internet bubble bulls of 1999 could only dream of. This is the real deal. Not a company that is hoping to be profitable in the future, this company already make billions and with 800 million users hanging out and sharing on their site the future truly has few limits on how it monetizes its users. With wireless mobile growing across the world we may see 1 billion users in the next five years.
How big is Facebook? It is becoming the internet! While people go to Google search and move on to their destination, Facebook is the destination for so many. How scared is Google? Their ridiculous and desperate launch of the unneeded and unwanted Google+ social site is a big red flag. Google was trying to integrate their search, g-mail, YouTube and Google+. I remain unimpressed, but I do give them an ‘A’ for effort. Mark Zuckerberg has already established himself as one of the greatest entrepreneurs of all time starting in a dorm room in 2004 and creating the world’s #1 web site, his path to over take MySpace and Friendster was an entrepreneurial work of art . I believe as he approaches his thirties he is only getting warmed up.
So our game is between the Google dynasty who has been the champion for many, many years and the new upstart Facebook. Stock versus stock, traders and investors can choose where to park their capital and for how long. Analysts will be watching earnings growth and revenue like hawks. Bulls will be buying the one that owns the future and selling the one that is stuck in the past. The winner of this game does not get the Lombardi trophy, they win the Internet. Play ball!