3 Diamonds and a Dog #10

Aug 20, 2012 by

In each post of the Money Counselor “Diamonds & Dogs” series, I pick three items—could be an article, a website, a video, an image—that in my humble opinion would be especially valuable—the Diamonds—in helping Money Counselor readers make better money choices. And to balance the three Diamonds, I pick just one lame item—the Dog.

money idea gems3 Diamonds

  • Luke Landes does a great job of describing in human terms—rather than cold dollar and cents terms—the effects of debt. Read Consumerism Commentary’s “Going Into Debt Gives Away Your Power” for a fresh and interesting perspective on the phenomenon of consumer debt.
  • In a guest post at The College Investor, Kathleen of Frugal Portland blog shares her insight with those heading off to college this fall that following the money when choosing a degree path may not pay off. See her “Focus on Passion, Not the Economy in College“.
  • Married (with Debt) blogger John and his wife spent eight years attacking $100,000 in consumer debt. On August 13th, they declared themselves debt free! Read their inspiring story at “We Did It: Debt Free“.

lame money adviceA Dog

This edition’s dog has got to be Facebook stock! After the May 18 IPO price of $38 (the stock actually peaked at $45), Facebook stock closed August 17 at $19.05—losing half of its IPO valuation in just three months.

The most recent development to crush FB is the unlocking for sale of a boatload of insider-held shares on August 16. Until last Thursday, insiders could not sell their shares. The insider shares lock-up will end in stages. Thursday’s release comprised 14% of an additional 1.91 billion shares that will be, potentially, on the market as lock-ups expire periodically until May 18, 2013.

I found interesting a quote on Bloomberg.com attributed to Rory Maher, an analyst at Capstone Investments Inc.:  “They’re still figuring out the best way to optimize their core business. And they haven’t quite done that yet.” So a company that has yet to understand how to optimize its core business is worth $100 billion (the IPO price implied valuation)? Apparently not, say investors.

Would You Buy Facebook Now?

What do you think of investing in FB at today’s price of about $19 per share? Did you buy any FB near the IPO price? If so, are you hanging in there?

Nominations Please

Do you have a nomination for a Diamond or Dog? Send it to me please using the Free Advice link at the top of the page. I’ll give you credit if I use it in a “3 Diamonds and a Dog” post.

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  • Thanks for the mention! Being debt free feels awesome. Regarding Facebook, I’d buy it around $10-15, but not a lot. This baby has some more to fall methinks.

  • All great reads, especially John’s post. $100,000 down and now debt free, pretty incredible.

  • frugalportland

    Thanks for the mention! And, no, I wouldn’t buy Facebook now.

  • DC @ Young Adult Money

    I wouldn’t buy facebook, there’s better stocks out there.

  • AverageJoe

    OG and I are hanging on until about $10. I believe then the stock has good value. $19? I’ll pass for now.

  • Andy Hough

    Facebook will probably go down a bit more since they just had a bunch of shares unlocked. I won’t be buying it.

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