Seeking Alpha by Adding Beta

As Facebook IPO date (May 17 or 24) comes near, everyone is getting ready to buy into this most awaited IPO since Google's IPO back in 2004 (same year when Facebook was founded). Only lucky few with connections to Wall Street or big brokerage accounts would get it at pre-IPO prices. Most of common investing public would have to wait to buy it on first day and given reaction to recent tech IPOs, this would most probably open 30-50% or more higher. So how does one participate in this Facebook mania without access to pre-IPO prices. Here is one way: Based on today's updated S1 filing by Facebook, ZNGA is still major source of revenue for Facebook contributing nearly 15% of revenue. As Facebook devises various schemes to diversify its revenue sources, I expect this to come down to 8-10%. That's still substantial. If we apply same financial matrix, ZNGA should be valued at about 8-10% of Facebook due to similar nature and tight co-dependence on each other. At IPO prices Facebo...

Lot happened in last 3 weeks since I wrote on Sachin's 100th century. Romney sealed (almost) GOP Presidential Nomination. N. Korean had failed rocket launch (no surprise there). AOL made cool Billion $ by selling patents to Microsoft. Apple crossed $600 Billion market cap - only 2nd company to do so ever - first one was Microsoft back in Internet Bubble 1.0. But what caught my attention was Facebook buying 12 employee company Instagram for $1 Billion. This reminds heydays of Internet Bubble 1.0 when Time Warner bought AOL for $180 Billion, Cisco buying Cerent for $6.9 Billion. SJ Mercury News and WSJ were full of such news in those days. Is Silicon Valley back to its old tricks or glory days? Only time would tell but excitement would continue well into May when Facebook would have its first day of trading either on May 17 or May 24. It is one of the most awaited IPO since Google's IPO. Question to ponder is: Would Facebook be valued more than Google on it's first day of...