11 worst predictions of 2012

Facebook is a Buy
facebook stock

Remember when Facebook was a $100 billion company? It was just seven months ago, but it must feel like an eternity for the brokers and retail investors who tripped over themselves to get a piece of this generation's biggest IPO.

Since going public in May at $38 a share, Facebook stock has traveled in one direction: down. The stock bottomed out around $17 before rising to a more respectable $27, which values the company at $60 billion, a far cry from its initial appraisal. There was talk of bankers bungling the offering, and similar indiscretions. But that only distracts from the truth that putting a mega-valuation on a company as young as Facebook usually has negative consequences.

One curious development in the whole brouhaha was former Internet stock promoter Henry Blodget sounding a cautious note about Facebook's rich IPO. He asked what giddy investors were seeing that he wasn't. It turns, not much.

  @FortuneMagazine - Last updated December 21 2012 07:02 AM ET
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