{"id":29714,"date":"2012-05-17T15:30:01","date_gmt":"2012-05-17T19:30:01","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/05\/how-to-profit-from-the-facebook-ipo-without-buying-facebook\/"},"modified":"2012-05-17T15:30:01","modified_gmt":"2012-05-17T19:30:01","slug":"how-to-profit-from-the-facebook-ipo-without-buying-facebook","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/05\/17\/how-to-profit-from-the-facebook-ipo-without-buying-facebook\/","title":{"rendered":"How to Profit From the Facebook IPO Without Buying Facebook"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"How<\/p>\n

Facebook is a cloud computing company. Profit from the Facebook IPO by buying the companies that provide Facebook's cloud computing infrastructure.<\/p>\n<\/div>\n

Over the last couple of weeks, investors have been hearing a lot about the Facebook IPO and the accompanying high-profile road show.<\/p>\n

For those who are confused, the road show is a planned set of meetings where the management team of the company going public, accompanied by its investment bankers, shares the investment merits of its about-to-be traded stock and why you, the investor, should buy in on the IPO.<\/p>\n

It is not<\/span><\/em> about whether the CEO of said company is wearing a suit, or a \u201choodie,\u201d or will even show up at all.<\/p>\n

What\u2019s challenging about the Facebook IPO isn\u2019t whether this is a leading company in the new field of social media \u2013 oh, it certainly is. And it isn\u2019t, in our opinion, about whether Facebook will continue to get \u201ceyeballs\u201d to its site \u2013 oh, it will.<\/p>\n

What\u2019s more meaningful to us is simply: Can an entire industry or company that has been in existence for less than 10 years continue to grow at its current torrid pace? Will social media continue to stay \u201chot hot hot\u201d or will it merge into the mainstream? If it takes a company seven years to \u201crule the world,\u201d how long could it take a competitor to come in and simply be cooler or just plain better?<\/p>\n

And the more important question to us is: Should I even be asking those questions?<\/p>\n

\u201cArms Suppliers\u201d<\/strong><\/h2>\n

This brings me back to a recent essay<\/a> I wrote about cloud computing\u2026<\/p>\n

Facebook\u2019s stock may go up or it may go down. But how do I profit from that when the largest institutional investors in the country get to see whether Mark Zuckerberg is wearing a \u201choodie\u201d or a suit? What advantage can I gain over them?<\/p>\n

The honest answer for me is, \u201cI don\u2019t have any advantage,\u201d and, sorry to say, neither do you.<\/p>\n

So, let\u2019s take a step back and look at Facebook another way. In its barest form, what is it? It\u2019s a company offering a service by utilizing the internet. In the cloud computing essay, we defined cloud computing as \u201csimply any technology service, such as an application, infrastructure, or platform that\u2019s offered to customers over the internet.\u201d<\/p>\n

Sounds like Facebook to me!<\/p>\n

And in that same note, I suggested investors look to the stocks of the \u201carms suppliers\u201d to the big guys already at war. Make no mistake about it \u2013 Facebook\u2019s war is no longer with the Winklevoss twins \u2013 it\u2019s now with Google<\/strong> (Nasdaq: GOOG<\/a>), LinkedIn<\/strong> (NYSE: LNKD<\/a>), Apple<\/strong> (Nasdaq: AAPL<\/a>) and even Microsoft<\/strong> (Nasdaq: MSFT<\/a>), despite any appearances of cooperation. All these companies seek world domination in their sectors.<\/p>\n

In the movie Social Network<\/em>, the Zuckerberg character, irate because someone had threatened the website\u2019s availability, states, \u201cFacebook does not go down, Facebook never goes down,\u201d or words to that effect.<\/p>\n

So who are the arms suppliers to a company whose website \u201ccan\u2019t go down?\u201d There are a number of different areas in addition to those mentioned in our earlier note.<\/p>\n

Infrastructure Management<\/strong><\/h2>\n

Admittedly, this term sounds about as sexy as a burlap sack covering a Sumo wrestler. But it is important, and these are the companies that help a company like Facebook stay \u201cup\u201d and performing to expectations.<\/p>\n

What are some of the weapons required?<\/p>\n