(CNN) - Facebook is set to go public this week. The company will sell 337 million shares of the company at $28 to 35 dollars a share in what could be the biggest IPO in history.
Should you buy Facebook shares? Or maybe the better question is can you even buy Facebook?
Suits, meet the hoodie. Facebook's Mark Zuckerburg gets rockstar treatment on his company's road show, but should he get your money when his company goes public? Facebook will price the IPO between $28 and $35 dollars a share. "Wait about a month after the stock has been released. The mutual fund institutional investors are going to be the major ones buying up the stock. So when the stock does actually open I believe it will probably go between 90 and 100 dollars a share. Let the hype go down, let the euphoria die down," says Ryan Mack, Pres., Optimum Capital Management.
Because a lot of rich people get in before we ever will, investment banks underwriting the IPO get the first crack at shares. They sell them to their best clients-- hedge funds, big money managers and insiders. They get that IPO price. Then retail investors, the little guys, get their shot. Dead last. E-trade is an underwriter of the IPO and will have some shares available. TD Ameritrade and Charles Schwab, too. For them, customers need a 6-figure account balance and a certain number of trades a month to get it.
"That's going to be very valuable. Place a limit order to make sure you limit the price you are willing to pay on a particular stock. What's your price, what's your budget?" says Mack.
The most famous investor will not buy the Facebook IPO. "I can't recall ever in my life buying a new offering. The idea of something coming out on a Monday that's being offered with significant commissions all kinds of publicity and everything. The seller electing the time to sell...is going to be the best single investment that I can make in the world among thousands of choices? That's mathematically impossible, says Warren Buffett.
