Facebook IPO in Charleston: More buzz than investment, until today anyway
Charleston entrepreneur Justin VanBogart is a fan of Facebook — and not just in the quick-click way popularized by the blockbuster social network.
VanBogart thinks Facebook is the real deal for the long term, and he’s willing to bet on it, first professionally and now personally.
His software start-up, mediafeedia, bills itself as “The business tool for Facebook,” and today, when the 900-million-member website goes public, VanBogart will seek a small ownership stake in the $100 billion company.
“As soon as an order can be filled at the same price point, I’m definitely going to buy some stock,” he said Thursday afternoon. “I want at least one share of printed stock to put on my wall.”
Even though meediafeedia is a Facebook-authorized developer, VanBogart, like most Charlestonians, didn’t have access to shares ahead of the initial public offering.
Instead, the 27-year-old, who is about the same age as Facebook founder Mark Zuckerberg, will place an order on E-Trade and hope for the best.
He’s far from alone in waiting for a piece of the historic IPO.
Like many financial advisers and wealth managers around town, Bucky Knowlton of Robert W. Baird Inc.’s Charleston location is on the outside looking in on this deal. His office was not able to get any of its clients early “allocated” shares from the IPO, since Milwaukee-based Baird is not one of the shops running the offering. But he’s heard the buzz.
“The interest is huge,” said Knowlton, senior vice president and branch manager for Baird. “I’ve had clients call me and say, ‘Is there any way to get Facebook shares?’ I’ve had to tell them, ‘No, not unless you want to buy in the aftermarket.’?”
Knowlton said he will be watching the action closely starting at 9:30 this morning, when the markets open. But he doesn’t anticipate buying any Facebook stock for himself.
“I’ll just watch and see, and marvel at the price and how it opens,” he said.
Other brokers were more tight-lipped about the hotly anticipated event.
If any local brokerage house would get a helping of shares, it would be the Morgan Stanley Smith Barney office in Charleston.
Martha McNeil, manager and first vice president for the branch, said, “Because we’re one of the lead underwriters, we’re strictly prohibited from discussing it at a local level.” She referred questions to a corporate spokeswoman in New York, who declined to comment on how many shares were made available for Charleston-area clients.
Gary Marshall, a software engineer who lives in Mount Pleasant, claims to be one of the lucky ones. He said he got an e-mail from his broker about some available Facebook shares, and it didn’t take long for Marshall to decide to buy some.
“It’s going to fly,” he said. “But you’ve got to keep your eyes on it.”
He expected the price to soar the first day, then to fall a bit in the following days. Still, he said he expects it to be a smart buy.
“I think in the short-term it’s a good investment,” he said. “It’s a tech stock, so you’ve got to be careful.”
VanBogart agreed about the intial fluctuation but thinks, once it stabilizes, Facebook stock will be a sound investment for the next three to five years.
“The biggest complaint against Facebook as a company is they’ve monetized very little compared to their user base,” VanBogart said. “But I think that is the most profound opportunity.”
Besides noting the social network’s “100 percent brand recognition,” VanBogart said very few of his business customers give Facebook any money.
“I think that’s going to change in a big way over the next few years,” he said. “I think [Facebook is] going to be forced to increase the value proposition to the point where it will be in the business’ best interest to be a paying customer rather than a passive user.”
He called General Motors’ decision this week to pull out of a $10 million Facebook advertising campaign and the media coverage of it “silly,” especially in light of Facebook’s $3.7 billion in 2011 revenue.
“That would be the equivalent of GM saying, ‘We’re never going to do television ads’ in the ’60s,” VanBogart said. “This is going to turn into the biggest marketing play period, and especially on the Internet.”
Marshall also believes Facebook hasn’t reached its peak. But he wouldn’t be surprised to see more competitors cropping up because it has gotten so big, he said.
He hardly uses Facebook to post information about himself — he doesn’t even have an image for his profile picture — but he said he does check it every now and then to keep up with family members who live out-of-state.
But he knows many others use Facebook far more often, and he is willing to invest in the company.
“I hope I don’t lose my shirt,” he said.
Diette Courrege and John McDermott of The Post and Courier contributed to this story.