Registered: Dec 2011
08-20-12 08:05 PM
Quote from nillionaire:
I went long FB at 19.08 today and am holding over the weekend. A second straight close near the day's low is a bit concerning, but I wonder if that means Monday's close is likelier to be near the high?
Anyway I do find it interesting it showed strong support at 19, which is 50% of the IPO price. I looked at similar stocks to see how they reacted once they dropped around 50% of their IPO price:
ZNGA priced at 10, then dropped down to 4.78 (a 52% drop), and then bounced up to 6.35 (a 33% rise).
GRPN priced at 20, then dropped down to 9.63 (a 52% drop), and then bounced up to 14.93 (a 55% rise).
P priced at 16, then dropped down to 7.83 (a 51% drop), and then bounced up to 12.3 (a 57% rise).
I checked a few other stocks like LNKD, YELP, and Z, but those never dropped under their IPO price.
Hopefully this pattern continues with FB as well and it bounces from here into the mid-20s.
So far it looks like you called it nillionaire.
I still don't get the rationale behind the trade, but the numbers and price action don't lie.
This guy agrees with you too:
Are you gonna take the profits and run, or hold on for more?