Facebook announced this week that it intends to have an initial public offering later this spring - one that has already been acclaimed as the richest IPO in history. The company's value is expected to be around the $100 billion mark, although it will be raising only around $5 billion in the IPO. According to the papers filed with the SEC, Facebook made a cool $1 billion in profits last year.
But will this highly anticipated IPO be a long-term hit with investors? That's still up in the air. The average IPO between 1980 and 2009 saw an 18 percent jump on its first day - but gained only 21 percent over the following three years. That's not even enough to beat the overall average market return.
Facebook's hope is that it turns out to be the next Google - an Internet highflyer that didn't crash and burn, but rather settled in for the long haul. On the day of its IPO in 2004, Google's stock got the customary first-day 18 percent pop - then gained more than 400 percent over the next three years.
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