Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Reserving Excitement On Internet IPO, Social Media ETFs

|Includes:AAPL, GOOG, LNKD, RENN, Viavi Solutions Inc. (VIAV)
All the fervor surrounding recent and upcoming Internet IPOs has plenty of folks drawing comparisons to Silicon Valley circa 1999-2000. While I count myself among those seeing the comparisons as valid, I sure hope the comparisons prove wrong.

Thankfully, I'm still young enough to remember my first post-college job where I was a reporter with a major financial news agency. I remember many days of just looking at the insane run-up to triple-digit prices for a host of Internet and tech companies, many of which were unprofitable. And I also remember, as I'm sure many readers do, the subsequent bloodbath that led to the disappearance of many former high-fliers such as e-Toys. Even some of the companies that survived are unlikely to see their pre-bubble stock prices ever again. JDS Uniphase (Nasdaq: JDSU) is one prime example.

etf,leverage etf,exchange-traded fund,etfs,exchange-traded funds,etf profit report,global profits alert,jim trippon

Yet here we are again in days that can be described as bubble-licious. The enthusiasm comes by way of companies like LinkedIn (NYSE: LNKD) that have already gone public and the anticipation of coming IPOs from the likes of Facebook, Groupon, Zynga and others.

Not surprisingly, the ETF industry is looking to capitalize on this trend, but that doesn't necessarily mean ETF investors need to be the fools that rush in. UBS recently rolled out the eTracs Internet IPO ETN (NYSE: EIPO) and a leveraged cousin, the 2X Leveraged eTracs Internet IPO ETN (NYSE: EIPL).

etf,leverage etf,exchange-traded fund,etfs,exchange-traded funds,etf profit report,global profits alert,jim trippon

I have proclaimed my quibbles with IPO ETFs in the past, saying that it takes too long for them to add the really sexy new offerings and that they often hold stocks well past the time those stocks can be considered “new.” Along those lines, EIPO does offer monthly rebalancing to accommodate new IPOs after they have booked five trading days with decent volume.

So in theory, EIPO could rebalance to feature Facebook once the social networking giant goes public and has traded for a few days and that could make EIPO worth a look then. For now, the ETN is plagued by scant volume and exposure to troublesome recent offerings such as China's Renren (NYSE: RENN). I'm not saying EIPO will never be a good fund, but I think investors can probably pass on it for the time being.

Global X is also planning a social media equity-based ETF, but no debut date was announced in the recent filing. I'll admit my curiosity here is piqued, but this will likely be a passively managed ETF and if it comes to market before the IPOs of Facebook, Groupon and friends, it could be while before this ETF rebalances and becomes a legitimate way for gaining exposure to those stocks.

etf,leverage etf,exchange-traded fund,etfs,exchange-traded funds,etf profit report,global profits alert,jim trippon

That said, if Facebook and Groupon quickly sport price tags that conjure up images of Apple (Nasdaq: AAPL) or Google (Nasdaq: GOOG) and the Global X ETF can feature 10% or higher exposure to Facebook and Groupon, the ETF might just be compelling.

The other side of the coin is that history has a way of repeating itself, especially in the financial markets, and if we see a sequel to Silicon Valley 1999-2000, it will be pretty easy to figure out what exchange traded products to avoid.


Click HERE to learn more about the ETF Profit Report - An ETF Trading Service For Serious ETF Investors
Here's why you don't have to worry about the "fine print" anymore...

There can be some really nasty surprises in store for you when you buy and sell ETFs.

Remember, although ETFs combine the best of both worlds of stocks and mutual funds – they can act totally different from each in real life.

Those differences are usually spelled out in the "fine print" of the ETF's prospectus.

Fun reading? Not hardly.

To get more details on the ETF service recently voted "The Most Accurate in America", tap on the link below...

Don't Let Me Make These Costly Mistakes When Buying And Selling ETFs!

Click to enlarge

For more information and archived issues, visit http://www.globalprofitsalert.com

Global Profits Alert (GPA) is published by Trippon Financial Research, Inc. a financial media organization with offices in the United States, Hong Kong and Mainland China. GPA is written by Jim Trippon in conjunction with George Wolff, Sunny Wang, Todd Shriber, Kelley Damiani and J. Daryl Thompson.

Would you like to republish this article? Global Profits Alert issues can be republished, as long as the republished issues contain the name of the author(s) and the following short paragraph:

This information was brought to you by GlobalProfitsAlert.com, a publication of Trippon Financial Research, Inc. GlobalProfitsAlert.com publishes information on Investing in the China stock market and emerging markets, dividend stock and income investing, exchange traded funds (ETFs), green energy stocks, technology stocks, global market trends and other investment information. To view archives or subscribe, visit http://www.globalprofitsalert.com

Stocks: VIAV, LNKD, RENN, AAPL, GOOG