WINDERMERE, Fla. (Stockpickr) -- The excitement is building ahead of the much-anticipated Facebook (FB) IPO. For a trader like me, this is like Christmas! Shares of Facebook have the potential to spike big time on its debut, and the derivative and sympathy plays should also see some hot action.The biggest news of late on this hot IPO is that Facebook plans to increase the size of its initial public offering by almost 25% to 420 million shares, so it could raise as much as $16 to $20 billion due to strong demand for the stock. In addition, on Monday news broke that the initial pricing from the underwriters has risen sharply, from $28-$34 to $34-$38. That would make Facebook the fifth-largest U.S. IPO ever, according to IPO research and investment firm Renaissance Capital. As a trader, I don't love that Facebook is increasing the float right before its IPO debut. The lower the float, the higher the chance this stock can pop huge if demand is truly as high as some are anticipating. Remember when LinkedIn ( LNKD) came public? LinkedIn didn't bring anywhere near 420 million shares to the market for its IPO, and the stock more than doubled on its trading debut. To put things into perspective, LinkedIn's float right now is just 60 million shares. >>5 Tech Stocks to Buy Instead of Facebook I also don't love that the new shares Facebook is issuing are coming from Goldman Sachs, which is now selling as much as 50% of its stake, up from 23%. The Wall Street Journal released a list of some of the smart money that's selling its stakes in Facebook. Others that jumped out at me were Tiger Global, which will now sell 50% of its stake, up from a planned sale of 7%, and Peter Thiel, who plans to sell as much as 50% of his stake. If this deal prices at the high end of the range, the company could start trading with a market cap of $100 billion. To put things into perspective, Google ( GOOG) had an IPO valuation of $25 billion, and it current has a market cap of $205 billion. Despite this high valuation, Facebook has enough buzz and excitement around it that the stock is probably going to make a monster move higher on its IPO debut. It would not surprise me to see the stock tag $55 to $65 a share once it hits the market. I would have probably predicted an even higher IPO price had Facebook not increased the offering. With all of this in mind, let's take a look at several Facebook sympathy and derivate stock plays that could spike significantly higher once Facebook's IPO hits Wall Street.
Large-Cap Social Networking PlaysSome of the well-known large-cap social networking stocks could also catch a solid bid if the Facebook IPO goes gangbusters on its debut. Some names to consider are Yelp ( YELP), which develops apps that connect people with local businesses. Another is a name a mentioned earlier, LinkedIn ( LNKD). LinkedIn operates an online professional network, and the company recently upgraded its mobile app to further entrench itself into social networking. Zynga ( ZNGA) is another potential Facebook sympathy play. This company makes social-networking games that are used with Facebook, including Farmville, Words With Friends, Zynga Poker, Scramble With Friends, Chess With Friends and Drop 7. What I love about all of these names heading into the Facebook IPO is that they are heavily shorted. The current short interest as a percentage of the float for LinkedIn is 11.2%, for Zynga it's huge at 51.9%, and for Yelp it's around 14%. These stocks could easily see some sizeable short-squeezes if Facebook soars on its opening day. Look to jump into these stocks and make some fast money if you see some pin action off the Facebook IPO. To see more Facebook IPO sympathy and derivative stock plays, including Vringo ( VRNG), Groupon ( GRPN) and Sky Mobi ( MOBI) check out the Facebook IPO Sympathy & Derivative Stock Plays portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
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