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Facebook, Inc. (FB) Message Board

  • magkandler magkandler Dec 8, 2012 6:49 AM Flag

    FB stock will never perform! Here is why!

    anyone heard of this stock?
    No, folks, I am not a spammer and I assume most of you dont know that company. It has outperformed FB by ages because NO ONE knows it! peter Thile (first investor in FB) just led another VC round in this company. I dont give a damn if what u do with your money but NEVER EVER I would chase a HOUSEHOLD NAME! because it is too late to invest in!

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    • Oh, I don't know about that. Just being a household name doesn't make a company a bad investment. In fact, being a household name that has gone up fast in recent times doesn't necessarily make it a bad investment either.

      Apple, Amazon, Priceline, General Mills, CVS, Chevron, and McDonald's were all household names 10 years ago. Not only are their stocks all multi-baggers since then, they're all sitting well above pre-financial crash highs. Chasing them during steep uptrends any time in the last decade and holding for a few years would have yielded nice returns to date.

      I think what you really want to say is never chase over-hyped momo stocks that everyone and his barber is talking about, excited about, and wants to get in on. Those stocks get bid up and up and up to price in years upon years of phenomenal growth, leaving the stock little potential even if the company performs well. If the anticipated growth does come, the stock ranges up and down because the growth was priced in early on, and if the anticipated growth doesn't come, it crashes. Even if the company performs very well, its stock will still head down because it didn't quite live up to the overblown hype. I offer VMW as Exhibit A. The company has grown phenomenally, but the stock has never recovered the ridiculous levels it was bid up to in the first few months.

      The hype stocks you most have to be careful about are the ones that dominate their market niche but are in danger of having that space invaded by bigger, better-funded players and haven't shown any evidence of versatility or innovation (in financially rewarding ways) beyond their initial big idea. I offer RIMM as exhibit B.

      I think FB is more like RIMM than VMW. The company is dominant in one area, that domination is hardly secure against being challenged, and the company hasn't proven that it's capable of using what it has as a platform for popular product offerings or expansion into other areas. It's a highly speculative investment based not on what the company is but what one hopes the company can become, with no track record to base that on. The difference is that RIMM started low and *traded* into the stratosphere, then crashed from there. FB started out in the stratosphere and crashed immediately, and even at the lows (so far) it was still overvalued based on factors that can be observed (as opposed to guesswork that it will *somehow* find ways to capitalize on its giant user base).

      As far as I'm concerned, it's a trading stock, not an investment.

    • stock can go up or go down, what ever the direction is you can always make money, if you think it will go down, buy put or sell call or short, if you think it will go up buy call, sell put or buy the stock, symple, LOL. But it is difficult to time it right LOL good luck.

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