The most highly anticipated IPO in history didn't put on much of a show. As I type these words, Facebook is currently trading within decimal points of its initial price of $38. Even so, the company's market cap is higher than McDonald's or Pepsico.
Espen Robak is the president of Pluris Valuation Advisors, where he studies and values private companies trading on the secondary market. I talked to him this morning just as Facebook trading began. This conversation has been edited.
THOMPSON: Let's cut to the chase. Are the people buying Facebook today idiots?
ROBAK: It's funny, Henry Blodget made the point earlier today that companies aren't going to go public anymore until they're ready to trade sideways. We shouldn't expect to see a huge pop. But Facebook is a really rare investment. Is it perhaps the biggest internet property in the world? Yes. Is it a big risk? Yes.
If you want a stable mature tech company at a reasonable valuation, you should buy Apple or Google. If you want a brand new start up, you should chase some flavor of the month, a lot of which are on the secondary market. If want something that's going to have explosive growth, you should have invested in Facebook a long time ago. [Note: For the moment, Robak is prescient. He made this comment before Facebook's IPO was flat.]