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Barely a year ago, at the insistence of one of my kids, I joined both Facebook (NASDAQ:FB) and Twitter. I didn't do so out of some need to expand my social horizons, since I'm an especially anti-social type and a newly minted recluse who sits and trades all day long.

Instead, I joined in order to promote my blog and newly published book. After all, what better way to publicize when the thought of actually paying for marketing services was abhorrent?

As a recluse, the answer to the question is quite simple. No. Do not Facebook. But it's really not that simple if you're an investor or potential investor.

In the meantime, it's been more than four years since I've had my account managed by a full service brokerage house. During about half of the 20 years that I'd spent with a single broker, including following him as he moved, I had a managed account.

The funny thing was that as my portfolio balance grew, the opportunities to get a piece of hot IPOs seemed to disappear. They came at me with regularity during my early years, which fortunately for me, began just as the market began to wake up in 1982, despite the fact that my balances were fairly low.

At the very least, the IPO allocations helped to secure my loyalty, but I suppose that once it was secured, there was no compelling reason to feed the beast.

When my broker unexpectedly passed away, I was stunned that it took more than a month to hear from the individual who assumed responsibility for my account, although the firm was timely in notifying me of the sad event.

Instead of starting with someone new, I moved everything to a discount brokerage and have been very happy managing my own accounts.

Although I'd gotten used to no longer receiving IPO share allocations, I was somewhat disappointed to see the incredibly mediocre track record my new company, E*Trade (NASDAQ:ETFC) had with its own IPO participation. In fact, for me, it became axiomatic that if E*Trade was allowed to participate in an IPO, that alone was reason enough to avoid the issuance.

An exception to that rule was a few years ago when they had an allocation of shares in the Visa IPO (NYSE:V). I never did get shares, but for a number of years Visa was among my favorites, particularly when it came to selling covered calls. I haven't owned those shares for a few months, as I was last assigned shares at $105 and have been patiently waiting for its price to approach that level before re-purchasing, but I've been watching myself grow old, instead.

In the years on my own, I've sat and watched many IPOs come to market and have resisted the after-market, except for one time. That one time was the much anticipated IPO of Blackstone Group (NYSE:BX). If you don't recall that one from nearly five years ago it surged at the open of its trading and over the course of the 18 months immediately following the IPO, just went straight down. It may not be fair to call it the Groupon (NASDAQ:GRPN) of its day, but as someone who chased shares in the aftermarket five years ago, to me, the analogy is appropriate.

Incidentally, I do own shares of Groupon, having been assigned the puts that I had previously sold. I also purchased shares afterward to cost average down and this very afternoon (May 14, 2012) sold $12 In the Money May 2012 $12 calls on the lower cost lot, as the share price surged prior to this afternoon's release of earnings. Certainly not an endorsement. Sometimes you just play with what the original post-IPO purchasers discarded when their expectations weren't met.

Despite the glaring caveat that the founders of Blackstone were selling their shares and cashing out, the overwhelming opinion was that ownership of Blackstone shares was a license to print money.

Since that time, I haven't chased anything. Certainly not chasing The Carlyle Group (NASDAQ:CG) as it went public last week and under-whelmed the market and certainly not Zynga (NASDAQ:ZNGA). Sometimes there have been regrets, as with LinkedIn (NYSE:LNKD), but most of the time, there is a sense of smug satisfaction.

But last week came the news that E*Trade would be participating in the Facebook IPO. At first, I thought that had to be some mistake. How could E*Trade possibly be participating, when early discussion of the IPO seemed to rule out an egalitarian distribution of shares?

Although I have no basis to believe so, I felt that my account value at E*Trade was larger than average, so I thought that if I put in an allocation request, I stood a decent chance of receiving shares.

The only problems that hounded me were the fact that it was still E*Trade and the fact that there were conflicting reports over the popularity of the offering. On the one hand reports would indicate that the offering was well over-subscribed, while other reports seemed to indicate quite otherwise.

Regardless, I completed the necessary paperwork and requested an allocation of 2000 shares, using the upper limit of the expected range as the price I was willing to pay.

Whether an SEC requirement or an E*Trade requirement, the need to have settled funds five business days before the IPO was requisite. Given the anticipated date of May 18, 2012 for the big event, that offered plenty of time for me to free up the funds.

But now, on a Monday morning (May 14, 2012) I sit and watch my account balance, which indicates enough settled funds to purchase even the entire lot that I requested, as well as unsettled funds from the expiration of call contracts I had sold, in addition to those that I sold just this morning.

The problem is that with the money sitting in the account, I feel handcuffed as I sit and salivate at what appear to be incredible share bargains in companies that also offer excellent premiums for selling covered calls. I'm handcuffed because if I were to purchase any of those bargains, the funds would first be used from my settled funds and then from unsettled funds. Yet those are the very settled funds required to complete my Facebook allocation, if any.

So I sit and watch Goldman Sachs (NYSE:GS), Caterpillar (NYSE:CAT), Freeport McMoRan (NYSE:FCX), Halliburton and others just languishing at these prices and me, unable to buy the shares.

The question becomes at what cost do you buy Facebook? I'm beginning to believe that even if I received my entire request of Facebook shares and even if they surged, the opportunity cost of allowing my fund balance to go un-invested until Friday will be greater than any profit that I might make by flipping shares.

The other confounder is to try and discover the compelling reason to believe that there will be a surge in prices after the trading begins. With an egalitarian approach to the distribution of shares is it possible that the very people that ordinarily would have bid up the price in a mad free for all frenzy as trading started, would no longer have a need to do so.

Instead of being buyers at the open, are the IPO riff-raff of society, people as myself, likely sellers at the open? That can't be good for the likelihood of price appreciation.

What I would find most fascinating is if there is indeed a successful IPO and significant price surge, just how many of the ubiquitous "Talking Heads" will proclaim that they were buyers of shares going into the IPO. Unless I am subconsciously filtering them out, as they make their on-air appearances, there seems not to be a single one committing toward the purchase of shares prior to the IPO. They all appear to scoff at the very notion.

So I continue to sit and go through "what if" scenarios. The greatest likelihood is that I will forego a week's worth of option premiums on a portion of my account, owing to share purchases deferred. On top of that, if prices truly are at bargain levels, think of all of the underlying share capital gains that will never be, as I wait until Friday.

As with so many things in life the anticipation leads only to disappointment. The hype is so great that logic dictates the outcome can only be one thing.

No matter. Who doesn't want to tell their grandchildren that they received a piece of the Facebook IPO?

Of course, that brings my next fear, hearing those yet unborn grandchildren saying "Face what?"

Source: To Facebook Or Not To Facebook