Investors "Like" Potential Facebook IPO

If potential investors could "Like" the prospect of a highly-anticipated and nearly inevitable announcement of an initial public offering for Facebook, it's a good bet that almost all of them would--and not with a nonchalant click of a mouse, but rather with a very large stack of cash.

Knowing that, the next step is determining if this love affair with a non-existent Facebook stock is justifiable, and why.

Recently, Groupon announced its intention to deliver an IPO, much to the pleasure of countless investors looking to get in on what some feel is the makings of another tech bubble. After the success of LinkedIn's (LNKD) offering, people can't wait to get in on the ground floor of the bigger online companies, a la Facebook.

Even foreign stocks such as RENN, the quote-unquote "Chinese Facebook," have drawn great attention at their outset. While online companies continue to be all the rage, the difference between the tech bubble of the early 2000's and this sort of new tech bubble is that the companies in the present actually have means of financial backing (though sometimes, not as much as you'd like to see in a stock going for a stock topping $100 per share initially... we're looking at you LNKD, now closer to $60 a pop).

We don't see a bubble bursting in this regard, and in fact see many online and computer companies, such as MSFT (Microsoft)--which we highlighted earlier--and YHOO (Yahoo), as undervalued. What we do see is a good opportunity to short some of these stocks following their IPOs, including Facebook's eventual offering.

While enticing to "get in on the ground floor," it's important to remember that regular Joe investors aren't the typing boosting these IPOs to double their asking price on the first day. It's major firms and big time investors that drive these prices, while the average investor gets in only after the price has ballooned. Nevermind that the Facebook IPO will be well over $100 a share, something an at-home investor type can only realistically purchase a handful of. A better bet is to short these tech stocks after they inflate.

Don't get us wrong, we like the long term prospects of a potential Facebook stock, but the IPO will rise to epic proportions before falling back to earth. Only then will it begin a steady climb--optimistically the likes of which only Google has seen--but initially, shorting the stock (when it finally arrives) is the option we "like" the most.

Bet American in the 2011 U.S. Open

No, this is not our version of a patriotic plea to support our home country. It's simply, in our view, the right play at this year's U.S. Open. An American will take this year's U.S. Open, which begins today for all you casual golf fans out here.

Take a look at the odds for some of the top golfers in the the 2011 U.S. Open golf tournament:

Lee Westwood 12/1
Luke Donald 12/1
Phil Mickelson 12/1
Rory McIlroy 16/1
Dustin Johnson 20/1
Steve Stricker 20/1
K.J. Choi 22/1
Matt Kuchar 22/1
Hunter Mahan 25/1
Nick Watney 25/1
Martin Kaymer 28/1
Bubba Watson 33/1
Adam Scott 40/1
Jason Day 40/1
Graeme McDowell 45/1
Brandt Snedeker 50/1
Charl Schwartzel 50/1
David Toms 50/1
Ian Poulter 50/1
Jim Furyk 50/1
Padraig Harrington 50/1
Retief Goosen 50/1
Rickie Fowler 50/1
Robert Karlsson 50/1

As you can see, there are plenty of Americans flying under the radar, including our two favorite picks (both featured in the above video), Bubba Watson (33/1) and Rickie Fowler (50/1), if he can get out of Hollister long enough to compete.

Young golfers like Fowler have been having more and more success on the big stage, and we expect another youngster to take the cake in Tiger Woods' absence in this major. Otherwise, we like the 30-something-year-old Watson, whose long drives make him a match for this freakishly long course. While all eyes are on a different lefty, Watson will emerge this weekend on the first Father's Day since his dad's death.

Either way, we are in for an entertaining weekend of golf action.

Stock Watch: Microsoft (MSFT) Worth a Bing Search

One of the more frustrating stocks on the market also might be one of the more valuable--which is why it's so frustrating. Countless number of amateur traders recognize the potential in Microsoft, which can be had at just $23.98, meaning countless number of amateur traders are just about fed up with the ups and downs that never really amount to anything over the past couple years.

However, while the Stock has maintained a relatively stable price, shareholders have been able to collect a roughly three percent annual dividend. And therein lies the value of MSFT.

You'll hear all kinds of things about how the Windows Phone 7 will compete with the likes of the iPhone, Droid and Blackberry (better late than never, Microsoft) or how once the company fires CEO Steve Ballmer (possible, but not as likely as some will have you believe) the stock will soar to the $30-40 range overnight. And you know what? Those statements might be accurate. Probably not, but there is potential.

But, regardless of those and several other optimistic outcomes, patient investors can sit back and collect a nice dividend without worrying about the price dipping too much more. The important thing for MSFT owners is patience. The stock may continue to drop, but a year from now, it will be at least back at $24 by all estimations, at which point you'll have made back whatever charge incurred by your broker for purchasing the stock. After about a year is when we really expect to see MSFT at minimum reaching $28-30, not astronomical but a nice little return. And in the meantime, shareholders can collect those dividends--one of the best way to make money in a down economy.

Microsoft is lagging behind in the smartphone market, which as we mentioned is a problem they are finally alleviating. They recently overpaid in their purchase of Skype. There is some concern (as a USA Today article pointed out yesterday) that the market for gaming consoles such as the Xbox is shrinking. But put all that aside and take a look at an undervalued (or worst case, appropriately valued) stock that will allow you to collect a dividend while holding a great opportunity for some nice gains in a year or two. Microsoft is making money and will continue to make money, no matter how much of that well has been dipped into by Skype and Bing and other foolish projects. As such, so long as you hold this for more than a month or two, it should be relatively easy to make a profit off of MSFT.

Stock Watch: A Look Back

Before we delve into some new stocks, let's take a look at our track record from the stock we were watching a while back. We'll list the date we introduced a stock we were watching, what the price was and what it is now.

We will no longer be rolling out any cheesy "Free Stock Picks" to make the stock market seem more like sports, though make no mistake, the stock market is just legalized gambling. Here's a look back:

June 15, 2009
MGM: Then - $7.13... Now - $14.19... Profit = $7.06 (+99.02%)
LVS: Then - $9.10... Now - $42.08... Profit = $32.98 (+362.42%)
IGT: Then - $16.30... Now - $16.57... Profit = $0.27 (+1.66%)

Welcome to the wonderful world of casino stocks. Had you bought LVS near its bottom, you would be in good shape at the moment. As you can see IGT has not quite had the same boon, so if you debated between LVS and IGT after we recommended both of them, and went with IGT--whoops. MGM bounced back as we expected, a nice 100% profit there. But LVS is clearly the cream of this crop.

September 23, 2008
AIG: Then - $5.00... Now -$27.65... Profit = $22.65 (+453.00%)

Lot's of bad press was going around about AIG at this time, but that's the key to making money in the market--take a contrarian approach when the market is bottoming out. That's when you can find value in big companies like AIG. We might even still buy AIG and expect to make money once the U.S. economy finally gets out of this thing, but to get in at five bucks is gold. It's all about timing.

January 29, 2008
ETFC: Then - $4.14... Now $14.49... Profit = $10.35 (+250.00%)

Another value pick here... It's almost hard to believe E-trade was down to four bucks (actually got down to two), and we simply got in at the right time again. Trusting that the big companies will bounce back (most of them) in a recession is the best way to make money, although the downside is that it requires the economy to be in a recession. We did a nice job getting into some of these near their bottoms and striking while the iron was hot, but we also missed an opportunity with other stocks that had bottomed and then ballooned back up even more. Still, we're happy with the results of the ones we were in on.

January 21, 2008
STTK: Then - $0.035... Now $0.06 (as STTN)... Profit = N/A

This is your lessen kids: don't bet on penny stocks. While the appeal of getting rich quick is there, it's very rare. You may be asking, what are you talking about Stock Lemon, though STTK changed its symbol, it is up from three-and-a-half pennies to six pennies, almost 100% profit! Sure, kids, it looks that way. But the reality is, as far as we can tell (we haven't really been paying attention to this one), they had some sort of reverse split a couple years ago wherein a single share of STTK is not equal to a single share of STTN. Anytime a company changes its symbol, unless it was bought by someone, it's not a good sign. This is a borderline bankrupt company that by all appearances had nothing to do with Bird Flu as they claimed. Sketchy.

As you can see, aside from our dip into penny stocks (idiots), we have fared pretty well in the past. Here's hoping for continued future success. Take note: all of these stocks were as of market close on Friday, in what has been a bad week to start what is likely to be a bad month. These stocks all reached even higher levels than their current prices.

More Like Fade Lemon

As you may have gathered, we've been single-handedly giving lemons a bad name by attempting to make bets on sports that we hardly follow.

It hasn't been going well.

What if we told you, all of this was a set up, designed to get our audience pumped up for our re-newed foray into the stock market? Since our last few picks have been so bad, we have to find some way to make money, right?

As we mentioned earlier this week, we'll begin looking at stocks a little further, just like the good old days. We'll still be heavy on sports content, particularly in football season (if there is one), but this is your second warning that the stocks are a coming.

For advertisers representing stock companies, this is your first call to action. We will accommodate you as well here at Stock Lemon. Simply shoot an email to stocklemonblog@gmail.com and let us know what you are interested in.

For the rest of you shmucks looking to give us a little cash, the paypal button to the left--despite contrary belief--does indeed work.

Now let's go make some money, be it in sports or stocks.

How About a Little Tennis in the Morning?

As we struggle to win with some of the other more conventional summer sports--you know, like indoor football and ice hockey--we turn our attention to tennis. The final four in the French Open should provide some good entertainment, and we want in. Here are a couple tennis bets for tomorrow morning... don't forget to set the alarm!

Rafael Nadal to NOT win 3-0 over Andy Murray (-130)

Nadal is good, we get it, but don't think he's slipping by Murray without losing one of these sets.

Novac Djokovic over Roger Federer (-300)

Laying quite a bit of juice on this, but we still think it's good value. Lots of action on Federer, who still has a bigger name at this point. This line should -450.

Good luck and remember, where there's clay, lay the chalk.

Stock Lemon Summer Vacation: The Stock Market

We're notorious for some sporadic posting in the summer months, for a variety of reasons. Usually, we take the summer to work on side projects or continue to learn how to improve our existing product here at Stock Lemon.

This summer, we're taking a vacation again, but this time we're taking you with us as we travel to Wall St.

That's right, we're going back to the basics here. We are, after all, the main squeeze on stocks and sports wagers.

Fear not, sports fans, there will be a few Free MLB Picks sprinkled in this summer, but we'll also unveil some Free Stock Picks for the first time in... let's just say too long (especially considering we still have stocks in our header).

We figured our recent cold streak across multiple sports (hockey, baseball, even horse racing) provided us with a nice opportunity to let you know of our summer plans.

So come with us through the many ups and downs of the market as we find the hidden gems.