Thursday, May 24, 2012

Should you Buy Facebook Shares?

Websites are investments. With a good web strategy and proper execution, you will have a decent return on investment. The stock market is another way to invest your savings.

When Google (Goog) entered the stock market in 2004 at $85/share, I thought the earnings growth predicted was ridiculous and stayed on the sideline. I was wrong. Google had a solid business model and was creating value for its customers. Now the price for Google shares is around $600 and the price / earnings (P/E) ratio is around 19.  I think the outlook is great and I recently bought a few shares.

Now that Facebook stock (FB) is available, what should I do? The stock was issued at $38 and is now trading at $31, after a few days, with a P/E around 70.