Why you shouldn't buy Facebook stock on the first day

Even the hottest initial public stock offerings can lose steam after their first day of trading. Keep in mind that buying Facebook stock Friday provides a chance to lose money 

Sure, company insiders will make money selling at the opening price. And investors who used connections or big bucks to score shares at the IPO price will profit if they sell after a first-day "pop." 

For everyone else, the wildly mixed record of other celebrated IPOs beyond their first trading session offers a lesson. 

It's understandable that everyone wants to get in early on what could be the next Google. Shares of the Internet search leader had an initial offering price of $85 in 2004, started on the stock market at $100 and climbed above $700 by 2007. Even after moving sideways for more than four years, they're still above $600. 

But odds are against a similar performance in the current market. 

The vast majority of average Facebook investors couldn't get in at the $38-per-share offer price. Those shares went largely to company insiders, the deal's underwriters or their fat-walleted clients. The price almost always shoots quickly higher by the time orders to buy at the market price kick in. 

And note that several of last year's "must have" IPOs aren't so "must have" any more. 

> Pandora, an Internet radio company, went public June 15 at $20 a share. You could have bought the stock during the day for $26. It's now trading under $11.