How Facebook's IPO Measures Up

Facebook has been hammered by the stock market after pricing its May 18 IPO at $38 and suffering an 18.4 percent drop through May 22. Unfortunately for buyers, a look at other big-ticket offerings of the Internet age suggests that long-term strength might be correlated to an initial pop on day one. "We view shares being priced for perfection," says Pivotal Research Group's Brian Wieser, who initiated coverage of Facebook with a "sell" rating and a $30 price target. Investors looking for the next Amazon.com might be disappointed, since Facebook was a more mature company, with $4 billion in annual revenue and an already rich $104 billion valuation at its IPO price.