The same copy was written about Apple years ago as what you get from FB is the HUGE potential to make profits that this or many other writers have no idea about. This person has zero clue, as most do, about the monitization of mobile, the new ad platform, as well as deals in the works for search as with almost 1 billion users there is a "startup" pricing at contrairen priced levels. NO ONE will pay attention to this persons article and the ones that do will be dupped as the writer is problly short.
Sentiment: Strong Buy
Whether we like it or not, Barrons is part of the market. There is also Jim Cramer, CNBC ,the other media, analysts, and insiders like MZ. Like it or not they are part of the market. They will sometimes move the market.
You obviously believe that FB is going much higher. There are those who believe the opposite of what you think. Who is right? The answer is no one. We do not know what is going to happen because it has not happened yet. FB may figure out how to make money and the stock may rise but then again FB may have a hard time monetizing its site and its user base may deteriorate causing the stock to fall further.
So you have to ask yourself if you are going to invest in the long term or if you are going to trade. If you are going to trade, you have to give up your bias. If you are long, then you need to not watch the market closely. A long position in FB requires a diverse portfolio because growth is risky. It is not a lot of risk to carry XOM because they are always going to make a lot of money. Your not going to make super high returns with a value stock. there is a trade off.
If you look at some stocks that were poised to fly like NILE, NFLX, CROX, DNDN, or AKAM, they dido't........That is the risk of growth stocks. If you held, you bit dust. If you look at AAPL, AMZN, GOOG, LNKD, you will see they did well. If you held, you struck gold. Chances are if you bet a lot on growth your going to have some good gainers and hey you will have losers.
FB is valued by the market.....Not us. We need to stop and consider how the market is valuing the stock. Currently FB still has a lot of people who believe it is going to grow but the faith has eroded yet it still has a very high multiple. If FB performs well in its next earnings, it will start loosing its naysayers but still there will always be opposing ends of the market. It would probably be trading at multiples higher than 200 if it weren't for the messed up IPO. The market probably will have a short leash and if FB fails to inspire we could see current multiples approach 50 or even lower. If FB has successes consecutively and consistently then they will receive the market's favor and will be rewarded with higher multiples. That's the way it works. Sometimes it even goes beyond explanation.
But what can we do?
We as investors or traders have to take our bias out of the market so we can make better decisions. We can't control the market with what we think so we should become good observers and act on our observations not what we want.
Imagine, FB continues emerging as the all time giant in mobile, with profits. The established investments begin to move to FB as the down pressure starts to build on the competition and many billions react and run. This is very possible, even probable. We are seeing a blitz of bad press being produced out of FEAR within the old establishment. As the balance slowly tilts to FB, investers will at some point run and investment managers will scramble to avoid holding the empty bag.
Sentiment: Strong Buy
When there is a Facebook account for a store or a restaurant, do you count that as a user? These are not people. And how about persons who have multiple accounts? Do you count them multiple times? What about all the fake accounts? I don't think there are anywhere close to a BILLION real users!!! And of the actual number, how many actually use FB more than once a month? And of all the non-USA users, how any will actually spend money on American products? FB's model is like Yahoo. Good luck with that! Also don't forget the stock split coming in November!!!
What your not saying here is that a restaurant or some other business is BETTER then an actual user because these are the ones who will target the list of interested and local customers to provide FB revenue. The new ad platform allows user spesfic data to create targeted ads, unlike the GM ads that they pulled. Also branding is still important and its GM's loss for pulling as I bet if IPO was successful they would have stayed. I can imagine some MBA at GM saying "pull these from FB as I lost my #$%$ in this IPO my brother in law at Morgan told me to get into". Perception is shifting and the person who replied to my post 1st was correct in that all companies are very often not farily priced and its up to us to determin our goals and comfort level.
This kind of crap should be illegal. Every time this stock starts to go up, somebody opens their mouth to bring it down. It's orchestrated, manipulated, coerced and it's fraud. Somebody should really check on these blowholes, every time they make these decisions or write these articles. The reason behind every decision is simple…money. And these crooks just can't seem to get enough of it.
If the stock is bound to go up then it will go up no matter what a newspaper says. The point with FB is that there is so much uncertainty related to this stock that noone really knows what to expect. We all know about the dilution coming next month, but noone is really sure how Q3 will be. These past 3 weeks people have been buying from Zucks promises! Most investors I assume are just riding the momentum and will exit long before the lock-ups hit the market. Maybe not the first lockup(because it will only be 101 mill shares), but on Oct. 29th.
If you are so certain that FB is going back to its former highs, then this article should mean nothing. If FB drops back to $20 a piece during next week, why do you care if it is going to be $38 Nov.1st?
hey jersey, IMO, some people DO , read Barrons, a lot of wall st. types DO read Barrons, Barrond DOES, have an impact on share prices, how long it lasts? who knows, but come monday, and next week, just be aware of this article, and trade / invest accordingly! FWIW.
PS. FWIW = for what its worth?
too bad we are yet to see any ads on mobile phones. Given the amount of users who are jumping over to smartphones and no longer use PC, every single day that passes without ads brings more and more uncertainty to FB future income model.
I wouldn't put my house and savings on this one.
dude, do you even have a facebook account? I see ads inserted into my news feed every time I log in. FB is killing it this quarter. Stock is going up because they are selling ads integrated into peoples newsfeeds. Its amazing and it seems to work without intrusion.