Investing In Facebook What Will A Facebook IPO Mean For ETFs (NASDAQ QQQ NASDAQ SOCL NASDAQ ONEQ

Post on: 18 Июнь, 2015 No Comment

Investing In Facebook What Will A Facebook IPO Mean For ETFs (NASDAQ QQQ NASDAQ SOCL NASDAQ ONEQ

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It was estimated that the firm raked in over $4.3 billion in revenues for last year and looks to extend those gains to investors if it were to launch and IPO in the coming weeks. According to multiple sources, the IPO was due to launch between April and June of this year, but that time frame has now been narrowed down to May. Note however, that with this predicted window, the filing would need to come relatively soon, as it can take anywhere from three to four months for the SEC to review the documents and approve the order.

With the world’s largest IPO tentatively set to hit markets, it will certainly have a major affect on some popular favorite ETFs. But ETFs will also offer a way to make a play on Facebook as they will surely include the company if it does indeed go public. After seeing some of the hefty volatility that newcomers like Groupon and Zynga endured, many investors may feel more comfortable with a diversified play utilizing an ETP. Below, we outline three ETFs that could be shaken up by this potential IPO [see also The Ten Commandments of Commodity Investing ].

This ETF replicates an index that includes the 100 largest nonfinancial components of the Nasdaq. With over $26 billion in assets and an ADV topping 35 million, QQQ is the seventh largest ETF in the world and ranks fifth by daily volume. With QQQ utilizing a cap weighting structure, Facebook could easily make its way into the top ten holdings if the company lists on the Nasdaq. as the predicted $100 billion+ valuation will put it above several of QQQ’s largest allocations. Note that buying into QQQ prior to the IPO could make for a safer way to play what will likely be a volatile debut for Facebook [see also ETFs: The $10 Billion Club ].

This one is a no-brainer. Tracking an index that measures the equity performance of the largest and most liquid companies involved in the social media industry, Facebook will surely get a large representation in this ETF. Considering that Google is the only top holding (ranked in 7th place) with more than $100 billion in market cap, it would not be surprising to see Facebook overtake the number one holding. While it may not be bigger than Google on debut, it is a pure social media site, and will dwarf the other holdings of this young ETF [see also High Tech ETFdb Portfolio ].

Nasdaq Composite Index Tracking Stock (NASDAQ:ONEQ )

ONEQ tracks the NASDAQ Composite Index, which measures all NASDAQ domestic and international based common type stocks listed on The Nasdaq Stock Market. This yields top holdings like Apple (NASDAQ:AAPL ), Microsoft (NASDAQ:MSFT ), Google (NASDAQ:GOOG ), and a number of others. While Facebook is not big enough to take the top slot of this fund, it would likely secure a spot in the top ten, and hold a significant weight for the overall product.

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