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Dave Olson, Published May 18 2012

Brokers: Facebook IPO clicks with some in area

WEST FARGO – Ross Almlie is not a friend of Facebook.

At least not yet.

Almlie, of TCI Financial Advisors in West Fargo, is telling clients they might want to wait before jumping into Facebook’s initial public stock offering, which opened on Friday.

“I tend to stay away from IPOs on the first day because you don’t always get your price point you want,” said Almlie, adding that it takes a few days for the market to decide what a stock’s price will actually be.

“If you’re going to be a long-term holder of the stock anyway, a couple days doesn’t make much difference,” Almlie said.

Despite his guidance, some clients insisted he purchase some Facebook for them on Friday.

“A couple folks were adamant about playing the stock and just wanted to be in it, and we’re accommodating them,” he said.

At Alerus Securities, which has offices in Fargo and Grand Forks, about 15 to 20 clients expressed interest in Facebook in recent days, which is a big number considering most initial public stock offerings get zero attention in the area, said Brian Kraft, president and an investment consultant at Alerus Securities.

Kraft told people that if they wanted some Facebook stock, they should go ahead and buy some, as long as its price

doesn’t stray too far from the $38 initial offering price.

“If it’s going to bother you that you didn’t buy any if it does well, then you should buy some,” Kraft said, adding that the price of the stock hovered around $41 for much of Friday.

Still, no one should go overboard, Kraft said.

“Where is it (the price) going to be in two years? I don’t know,” Kraft said.

“With any initial offering, there’s a lot of speculation on what the true value of the company is. There’s not a lot of historical information to base an investment decision on.

“So, it really ends up being a crapshoot,” he said. “Some of these initial offerings turn out to be great and some are flops.”

Almlie said clients he hears from have been very excited or very indifferent about Facebook’s IPO.

And while the company

doesn’t hold much interest for him, he said that might change.

“If Facebook proves to me they can make money in other ways outside of advertising, and I suspect they will, then I’ll get interested,” he said, describing the Facebook IPO hubbub as “a lot of hype for not much good underneath it.

“I’ve made a public prediction that I think Facebook will be gone in 10 years because that’s how tech works,” Almlie said.

On the other hand, he said he could be wrong.

“If the stock closes at 100 bucks and never sees two digits again, then we look stupid. But that’s a chance we’re willing to take,” Almlie said.

Readers can reach Forum reporter Dave Olson at (701) 241-5555