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InstaBubble 2.0!

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 trading? There is small but definite possibility of this happening. At IPO prices Facebook would be valued at about $110 Billion. If it is doubles on first day, it would be valued at $200+ Billion which is what GOOG is valued at. With so much valuation, $1 Billion must be chump change for Facebook. Apple investors, watch out for post-earnings reaction to Apple stock. I was visiting Apple store last week and observed that the "New" ipad was easily available unlike ipad2 for which I personally had to wait for 7 weeks and visit Apple store multiple times. Is this due to better supply chain management by Apple or due to only incremental improvements in new ipad compared to ipad2? Another factor could be: Many investors who made lot of money in Apple over last 3 years may book some profits to have some dry powder for Facebook IPO.
And then there is old saying "Sell is May and Walk Away".

Back in India, the biggest yearly Cricket Mela has started with IPL5 in full swing. I am again rooting for Mumbai Indians!

/Shyam


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