Financial Indie: The Facebook IPO

This is a special edition of “Financial Indie” focusing on the upcoming Facebook initial public offering (IPO). Financial Indie is a series of articles designed to help writers finance their careers. If you have an investment question, please post it and I’ll try to incorporate it into a future article.

Almost 900 million people, or almost 13 percent of the earth’s population, use Facebook, the world’s top-ranked social media website, to keep in touch with family, friends and business contacts. Millions of companies and individuals have pages dedicated to promoting a product or themselves. Facebook is, in a word, a Juggernaut (or pick another synonym for "huge"). It is far and away the world’s largest social media website, as this infographic shows. For many writers, Facebook is an almost indispensable tool to market their books and build their brands.

Facebook Page

On Friday, May 18, 2012, Facebook will reportedly sell 422 million shares to the public at U.S.$34-$38 per share in an estimated $15-$16 billion offering. When the shares price late Thursday, they will likely be at or near $38. When they begin trading on Friday, it’s a safe bet that the price per share will at least double given how highly anticipated this offering is. I would not be surprised if shares of Facebook (FB) trade at more than $100 per share by early next week.

The May 2011 IPO of LinkedIn (LNKD), a much smaller social media rival, offers a good road map as to what might happen after Facebook goes public. Shares of LinkedIn rose as much as 171 percent in their first day of trading and closed at $94.25, more than 109 percent above the $45 IPO price. The stock went on to peak above $100 per share the following week and now trades above $110. I expect Facebook to perform as well or better, perhaps trading on Friday at a price higher than that of LinkedIn.

If you use Facebook — and chances are you do — you may be wondering whether you should invest in the social media giant after it goes public. You may be familiar with the site and know what it can do and how powerful it is. You may have also heard the investing adage that you should buy what you know. If you know Facebook, does that mean you should invest in it?

The short-term answer is a qualified "no." Although Facebook may be a good investment in the long run, think twice about buying shares immediately after the company goes public. Now, I’m not a naysayer who shies away from hot stocks. I take calculated risks. In August 2004, against the advice of some financially savvy individuals who thought it was overpriced, I purchased shares of Google (GOOG) via Dutch auction for U.S.$85 per share. By late 2008, shares of Google reached almost $715, a sevenfold gain, before dropping to $292 during the 2009 financial crisis. Google now trades at just over $611 per share. Google has been a good investment for me. I have bought and sold Google shares three times and made money each time. Taking a calculated risk on a hot stock can be a lucrative bet if done right.

Facebook’s IPO, however, is nothing like Google’s. When Google went public, it tried to balance the playing field for investors by auctioning off shares to all interested parties, institutional and retail investor alike, at a set price. Facebook is going public via a traditional offering where shares are allocated at face value to a limited number of investors and then sold in the market at whatever price it demands. Unless you’re underwriting the offering or stand to make a mint from going public like co-founder and CEO Mark Zuckerberg, who will make an estimated $20.28 Billion (yes, that’s a "B") when his company goes public, you’ll be at the mercy of the market when you try to buy your shares. You may try to scoop up some after they go public, but you’ll be bidding along with the well-informed masses who are keen to get in on the action. You and a multitude of other bidders who are desperate to get their hands on the stock will pump up the price to a ridiculously high valuation. The higher it goes, the greater the risk that the price will plummet once interest cools.

I believe that in the long run Facebook stock will be a good investment for those who buy shares at the right price. One way to determine whether to purchase shares of Facebook is to wait until after the company releases its first post-IPO quarterly results. Investors will probably bid up the stock before the earnings results are announced. If they’re good, expect the share price to remain stable or go up slightly; if earnings are a disappointment, the price could fall substantially as investors readjust their expectations. Either way, read the analysts’ reports to see whether they consider Facebook a good long-term investment. Let their analyses, which could range from “strong buy” to “sell,” guide your decision whether to invest.

If you absolutely can’t wait to invest in Facebook, consider buying some shares on the "dip," a lull in the price that invariably occurs one or two weeks after IPO. That’s when the initial buyers bail out of the stock to lock in short-term gains, bidding down the price.

I plan to buy some shares of Facebook (FB) in the next few months and hold them for the long term, but I will wait for the ideal moment to buy. I can’t tell you when that will be until after the company goes public. I had an opportunity to purchase privately-held shares of the company on the secondary market in the mid-$30s but opted out. Time will tell whether my "go-slow" approach to Facebook — in contrast to my enthusiastic participation in Google’s IPO — is a good move.

Click here to read the previous edition of Financial Indie.

Disclaimer: I am an accredited private investor. I am not a certified financial planner or investment advisor. The information contained in these articles should not be considered professional investment advice. Use your own discretion when pursuing investment opportunities. For specific investment advice, consult an investment professional.

buythumbM.G. Edwards is a writer of books and stories in the mystery, thriller and science fiction-fantasy genres. He also writes travel adventures. He is founder of Brilliance Equity LLC, an investment firm.

Edwards is author of Kilimanjaro: One Man’s Quest to Go Over the Hill, a non-fiction account of his attempt to summit Mount Kilimanjaro, Africa’s highest mountain. His collection of short stories called Real Dreams: Thirty Years of Short Stories available as an e-book and in print on He lives in Bangkok, Thailand with his wife Jing and son Alex.

For more books or stories by M.G. Edwards, visit his web site at or his blog, World Adventurers. Contact him at, on Facebook, on Google+, or @m_g_edwards on Twitter.

© 2012 Brilliance Press. All rights reserved. No part of this work may be reproduced or transmitted without the written consent of the author.

Twitter as a Marketing Tool

I’ve been using Twitter for the past few months to connect with other writers, meet new acquaintances, and build a following for my writing. Some successful authors claim that their sales took off after they built a Twitter following, and I believe them. Based on my preliminary efforts, Twitter seems a more effective marketing tool than Facebook, LinkedIn, Google+, and other social media sites. This, of course, could change over time, as the executives at MySpace can attest. Other social media sites have their own benefits. In my opinion, Facebook is a better forum than Twitter to connect with friends and family who may be the only ones supportive of your writing at the outset of your career.

My quest to figure out what works on Twitter has been one of trial and error learning how to use Twitter effectively. The result has been good, so far, with my number of followers increasing more than 300 percent in December 2011 and already up by a third one week into January 2012 (thank you, followers!). One ebook giveaway I tried received several responses; an offer to purchase my ebook at a discount did not net any new sales. I will continue to offer a mix of incentives to attract readers until I find a strategy that works.

I’m slowly getting the hang of Twitter. I’ve found that unless you want to buy followers, it simply takes time to build a following. Buying followers is ethically suspect and defeats the purpose of building lasting relationships. Simply put, tweeting, or sending messages (tweets), takes time.

When you tweet, it’s important to:

  1. Follow others. The best way to gain new followers is to follow others. Search “Who To Follow” to find others who tweet about your interests and follow them. Twitter will then suggest others you might want to follow. Many will follow you back. Unless you’re a celebrity, you’re probably going have to knock on doors first.
  2. Post relevant content. I like to post links to breaking news articles related to my interests. I like travel, politics, and self-publishing, so many of my tweets focus on these subjects.
  3. Have a brand. Focus on what’s important to you and tweet about it. Those interested in finding you will. If your brand is based on a popular character, such as a protagonist in a book or your pet, and you have the right to represent them, you can set up an account for them and tweet on their behalf.
  4. Be creative. Those who have something interesting to share or assume a creative persona on Twitter tend to do well. Some cats have larger followings than most humans.
  5. Public thank yous. Thank followers publicly for following you by tweeting it. I have a small following and still send individual “thank you” tweets to new followers with a personal note attached. Some with more followers write “thank you” and list new followers in a single tweet.
  6. Retweet. Repost newsworthy items posted by your followers. When they mention you to their followers, thank them publicly.
  7. Direct messages. Send private messages to followers in order to cultivate relationships. Be genuine and sincere, not patronizing. I don’t think it’s a good idea to send a spam ad to new followers as a message, although some do. Product placement is okay as long as what you’re offering is of interest to your followers.
  8. Tweet frequently. Tweet as often as you can. Since none of us can tweet 24 hours a day, use a site such as BufferApp to program tweets to post automatically while you’re away. Keep them relevant. I started posting humorous “Your Friendly Sleeptweeter” tweets while I’m away that play up the fact that I’m still tweeting while I’m sleeping. Here’s an example: “Greetings from your friendly sleeptweeter. I’m just passing through on my way to dreamland to greet you with a hearty zzz.”
  9. Sell, but don’t overdo it. It’s okay to advertise something you’re selling such as a book, but do it sparingly. I’ve read that a 20:1 ratio (one advertisement per 20 tweets) is a good ratio. The more you look like a pusher, the more you will turn off your followers.

Only time will tell if these efforts will pay off for me. They seem to be working so far, and I’m looking forward to seeing whether these efforts bear more fruit in the coming year.

Follow me on Twitter at @m_g_edwards. I’m happy to follow back.

M.G. Edwards is a writer of books and stories in the mystery, thrill and science fiction-fantasy genres. He also writes travel adventures. He recently published a collection of short stories called Real Dreams: Thirty Years of Short Stories available as an ebook and in print on He lives in Bangkok, Thailand with his wife Jing and son Alex. For books and stories by M.G. Edwards, visit his web site at

Putting Yourself Online

I spent much of the weekend experimenting with online media to determine my optimal mix.  As I alluded to in some of my earlier posts, I am making the shift to full-time writing and investing, and this is a project that will set me up to transition smoothly.  I haven’t fully launched my online presence yet but am now working on setting up the channels I want to use to publish my books and stories.  It’s been an interesting learning process.  Here are some friendly tidbits to pass along to you in case you’re planning to boost your online presence:

  1. Web site:  My site is hosted by a large web business solutions company that I know won’t go out of business anytime soon.  The web site registered three domains for me,,, and  Why did I choose three domains?  Each has a specific purpose.  M.G. Edwards is my author’s web site, World Adventurers is my personal web site focused on our journeys around the world, and Brilliance Equity is my investment firm.  The web development tool I’m using to build web pages is Adobe Dreamweaver, considered by some to be the gold standard of web design software.  I have an older version that I’m going to update.
  2. Photos:  Adding photos to a web page can be tedious work unless you use a dedicated web site designed to make batch publishing photos easy.  I use Google Picasa to host my photos.  I tried Yahoo’s Flickr but don’t like the space limitations.  Google offers one gigabyte of free storage space – plenty of space for public photos.  Picasa Web Albums has a nifty feature that will let you embed photo albums and slideshows into your web site.  Simply copy the HTML code into your web page.
  3. Videos:  Google YouTube is a great site for hosting video clips.  You can upload video footage in a variety of formats (MP4 recommended) and then embed the HTML code into your web page a la Picasa.  The embed feature is hidden in the “Share” option on YouTube (it took a while to find).
  4. e-Books:  There are several e-book formats to choose from depending on which e-reader you use.  Basic HTML web script, PDFs, Kindle (PRC or AZW) and Nook (PubIt) are options.  You can post books or stories on your web page using HTML; Dreamweaver does this with ease.  MediaFire (or Ziddu) offer free document hosting.  I chose MediaFire for its slick, easy-to-use design.  You can also embed HTML code from MediaFire into a web page to send readers directly to the site to download PDFs, Kindle, or Nook e-books.  To sell e-books, try self-publishing on Kindle Digital Publisher.  KDP converts PDFs into Kindle-compatible e-books and sells them on Amazon’s web site.  Note that Amazon will add an additional charge of about $2.00 per book, so if you list the book at $2.99 it will cost the reader $4.99.  To sell print versions of the books, try Amazon’s Createspace.  While there are literally dozens of self-publishing options, Amazon is the proverbial 800-pound gorilla that has the most sales and marketing clout.  To create PDF files, use Adobe Acrobat software or a free version called PDF Creator.  To create e-book formats compatible with Kindle, use the Mobipocket Creator, which can convert both Word documents and PDFs to e-books).  It’s a very cool free program.
  5. Blogging:  I have blogs on both WordPress and Blogger (Blogspot), and both are excellent.  I use WordPress more and am happy with its format.  A link on my web site sends the reader directly to the blog.
  6. Audiobooks/podcasts:  To create a rudimentary audiobook or podcast, you need a device to capture your voice.  The Sony IC Recorder is a great compact voice recorder that costs about $40.  It captures your voice in MP3 format that you can download to your computer and upload to any web site that hosts podcasts or audiobooks.  At the moment I’m experimenting with Podbean using a demo MP3 I recorded of one of my short stories.  The MP3 I produced is no frills and is not re-mastered.
  7. Social networking:  Almost everyone on the planet who uses the Internet is familiar with Facebook and Twitter.  These are good for driving traffic to the site; Facebook will let you set up a profile dedicated to whatever you want to publicize.  I have a Facebook Author page.  Other options in this category include MySpace and LinkedIn.

I just started experimenting with these media using some stories that I wrote.  So far, so good.  It’s been a bit of trial and error, and I wanted to pass along some of my lessons learned so you can check them out if you want to increase your web presence.  It should save you some time.

A Victory for Speech Recognition

I am writing this blog entry using my voice. I am dictating words into my iPad using speech recognition software instead of typing. I downloaded an app made by Dragon to my iPad, then I copied this text to another iPad app that links to my blog website and uploaded it to the web. This entire process took about 10 min., but I am happy that I could blog without typing. As I practice more, I think it will be a little to dictate faster and make this more seamless.

This is a small victory for technology and a big leap for speech recognition.

Blog sharing

I just changed the settings on this blog to publicize on Facebook, Twitter, MSN and Yahoo and am testing it to see how it works.  It will save some time cross-posting and drive more traffic to this site.  Just another step on the way to a new future and new reality. 

Results varied when I tried to cross-post this entry.  Twitter was seamless, Facebook took a couple of tries, and MSN and Yahoo were lost somewhere in cyberspace.  No wonder Facebook and Twitter are eating the traditional e-mail providers’ lunch in the social networking space.

Stay tuned for more posts!  In the next month the frequency will increase, and I’ll start adding more photos and multimedia.

Technology Disconnect

Technology is finally sophisticated enough to capture most aspects of one’s life. 

Digital cameras take photos. 

Video cameras record us visually.

Digital voice recorders can record one’s voice for posterity. 

Speech recognition software lets us dictate our thoughts digitally. 

Tablets such as Bamboo Pen enable us to write or draw without paper. 

iPods and other MP3 players let us take music and other media with us.

Portable multimedia devices such iPhone or Blackberry let us call anyone near or far or download apps to our heart’s desire.

Karaoke equipment lets us sing and record music for entertainment.

e-readers such as Kindle and iPad let us carry a library’s worth of books while software such as Mobipocket allow us to turn our writings into e-books.

The Internet allows us to facilitate communication via e-mail or social networks.

All of these and more are enabled by a one computer or laptop.

With so many ways to use technology to capture, record and monitor our lives…

…why are we more disconnected than ever before?

300,000 hits

Wow, this blog has had 300,000 hits since its inception in late 2004.  That’s pretty cool!  Thank you, dear reader.

World Adventurers used to have a higher readership but decreased to about 200 per week after it went on hiatus in 2008.  Since I revived it late last year, things have picked up a bit.  If you’ve stopped by to read this blog over the years, thank you.  Your patronage is much appreciated.