Jeremy Gates looks at the nation’s money issues and reports on the pros and cons of investing in the latest tech bubble

THE plunge in stock markets across Europe this week – after voters in France and Greece rejected austerity measures - hardly provides a positive backdrop to the biggest share issue of the year.

With more than 526 million users each day around the world, Facebook is expected to provoke a rush of would-be investors when shares go on sale in New York on May 18.

Some 338 million shares are being sold off, a tiny part of the company which will still raise more than £6bn from new investors.

But that will be barely half of the value of 27-year-old founder Mark Zuckerberg’s stake (£11.6bn), and a successful flotation could create a giant public company worth more than £62bn.

The biggest beneficiaries, in the first instance, will be employees in the company – reports indicate that Facebook employees could exercise share options to share about £16bn, while Zuckerberg, right, himself could need more than £1bn simply to settle tax bills.

Four senior executives, including chief executive Sheryl Sandberg, are set to share £1.6bn between them.

Even the graffiti artist that fashioned the murals in the company’s first headquarters who accepted share options as payment could collect an amazing £120m.

In the avalanche of statistics about Facebook, many are contradictory.

The number of Britons using Facebook fell by two per cent to 28.6 million in the first quarter of 2012.

Growth is minimal in the US too, and the company is struggling to grow revenues from its 900 million regular users, particularly on smartphones.

Concerns were also expressed when Facebook paid £1bn for Instagram, the smartphone photo app launched 18 months ago which has fewer than 20 employees and is yet to make a profit. Some say Facebook feared losing a substantial chunk of its business.

But others say Facebook is still growing strongly, particularly in emerging markets such as Brazil.

It faces stiff competition from local rivals in South Korea, Japan and India, and the authorities firmly prevent Facebook from accessing 500 million internet users in China.

Should Facebook shares interest the small investors – and also those serious longterm savers keen to identify growth as they build decent pension pots over 20 or 30 years?

The big danger of getting sucked into this latest ’tech bubble’ is that the new generation of technology shares – the so-called social media companies – have proved highly volatile in recent months.

Invariably these shares pay little or no income. You are really betting on prospects of future growth.

There has been a spectacular surge at Apple too – in the wake of its decision to start paying dividends, the share price surged 70 per cent in four months to the end of April.

Traditionally, technology shares are held for capital growth, rather than regular income; the reason to buy them is the assumption that they will be more valuable in a decade than they are today.

But perhaps the cautious, savvy investor should really use the Facebook launch as a wake-up call to take a closer look at US shares generally.

Beyond the US presidential election, it can be assumed that attempts will be undertaken to kick-start the economy, and the dollar may well rise, particularly on the back of falling oil and gas costs.