Why FB is likely to drop after earnings even if it surprises.
The stock has alreday gone up 60% since the last earnings report. This tells me that the any revenue growth has already been baked into the price probably more than it should have been.
The public is looking for another GOOGLE or APPLE and they are payning a premium just to get a piece of the action.
Mobile revenue growth will come at the expense of table top devices. End result can be a wash with no significant revenue growth.
Any disappointment will send the stock in a tailspin and down 20 to 30% in a day and then it will continue to drift lower or trade sideways until the revenue growth becomes more clear.
IF FB ges to 100 billion capitzliztion, it would have to be making $5 per share profit (at least). That would be the equivalent of 0 billion dollars per year. Currently their entire revenue is less than 5 billion dollars.
It will take several years of continued strong growth for Fb to be worth what it is selling for today.
Well put. I have found that this message board is a pretty good contrarian indicator of what will actually happen with the stock price. The sentiment here overall is that these earnings will beat and the price will skyrocket. I currently have some Feb. 30 calls, but I'm dumping them before market close on the 30th. We're getting such a good run up to the earnings announcement that I feel the price is already reflecting blow-out earnings.