Written by Rebecca Lipman

Facebook filed for its highly anticipated IPO on February 1st, begging the question, are social media stocks a smart investment?

If we're using Facebook as a bellwether for the industry, investors should hang tight. It will likely debut in May, and it will be a couple months before the Facebook frenzy cools down and shares trade normally.

Not to be left behind, many more social media IPOs are in the works (Yelp may be up next). But what about the social media stocks currently on the market?

Louis Basenese at Wall Street Daily cautions investors against getting too taken up by the hype. "Almost without exception, social media IPOs have proven to be a sucker's bet. To date, none of the hype has translated into any profits for everyday investors. And I don't expect that track record to improve any time soon."

He supports his claim by referencing Zynga (ZNGA), which was founded in 2007 and released its IPO in December 2011. Zynga is already considering expanding into online gambling.

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"In the end," he says, after only five years Zynga's management is signaling that growth for its core business is already "waning so much that they're on the hunt for new growth opportunities in industries completely outside their core competencies... Changing focus so early on is the biggest red flag of all for Zynga's stock!"

Groupon (GRPN) has made a similar expansion (from offering single local deals to travel deals and retail products), suggesting the problem is persistent in the social media industry.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.

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"Bottom line: The fundamentals that shot social media companies to instant stardom are already fading. That doesn't bode well for future share prices."

If you're interested in following the trend, the following is a list of social media companies already trading on the US markets.

Do you agree with Basenese, or do you think the market will shift in favor of these newer social media stocks? (Click here to access free, interactive tools to analyze these ideas.)

1. Groupon, Inc. (Nasdaq: GRPN): Operates an e-commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. Market cap of $15.58B. The stock is a short squeeze candidate, with a short float at 47.1% (equivalent to 5.32 days of average volume). Exhibiting strong upside momentum--currently trading above its SMA20, 20.75% above its SMA50, and 19.69% above its SMA200. The stock has had a couple of great days, gaining 21.91% over the last week.


2. LinkedIn Corporation (Nasdaq: LNKD): Operates an online professional network. Market cap of $7.79B. Relatively low correlation to the market (beta = 0.27), which may be appealing to risk averse investors. Exhibiting strong upside momentum--currently trading above its SMA20, 11.32% above its SMA50, and 17.1% above its SMA200. The stock has had a good month, gaining 29.28%.

3. Pandora Media, Inc. (NYSE: P): Operates as an Internet radio company in the United States. Market cap of $2.23B. The stock is a short squeeze candidate, with a short float at 6.26% (equivalent to 6.27 days of average volume). Exhibiting strong upside momentum--currently trading above its SMA20, 14.97% above its SMA50, and 29.28% above its SMA200. The stock has had a good month, gaining 36.46%.

4. Zynga, Inc. (Nasdaq: ZNGA): Develops, markets, and operates online social games on the Internet, social networking sites, and mobile platforms. Market cap of $9.36B. Exhibiting strong upside momentum--currently trading above its SMA20, 35.88% above its SMA50, and 37.13% above its SMA200. The stock has had a couple of great days, gaining 33.23% over the last week.

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Disclosure: Kapitall's Rebecca Lipman does not own any of the shares mentioned above.