So far, Shorts winning every week from IPO day till last Friday. Hats off for them.
They might still continue the show and depress the Longs even more the coming week, however, there are few game changers that might turn around this casino war.
1) Historically, day after Labor Day is one of the most volatile in the year where every major investor resets their portfolios before the rally to elections. The drop of FB might encourage buy sentiments on the stock.
2) Again, day after Labor Day, major investors return from vacation and whoever had FB stock might average down.
3) Last unexpected Friday drop of the stock occurred very early in the pre-market, sending a sell sentiments on the stock, after the stock was stuck on $19 for all week. The institutions initiated this drop to setup up for a phenomenal short squeeze after labor day. When shorting stocks, right before Labor Day, If you’re wrong, god bless you finding the liquidity to get out when margin calls hit. The institutions rigged the short squeeze to get the stock moving.
4) Current stocks shorted $88M. It will take 2 days+ for Short to cover sending the stock to the roof.
5) Recent $1M+ shares bought by Insider Hastings, will encourage top investors to jump in.
All the above might trigger a short squeeze on Tuesday. Having said this, the current trend is downwards on the stock. It will be clear from the early pre-market when institutions sets the tone for the day.
lol. Thanks for buying! We need people like you to buy so we don't feel bad. As for your points:
1) Increases in volatility are associated with decreases in shares prices. Why do you think hedge funds use the VIX to hedge instead of puts?
2) Big Investors don't want this on their sheets at the end of the year. Study after study confirms a strong trend to sell stocks that are down going into the last quarter.
3&4) Can't squeeze a stock when the float is this high (and it's only going to get worse). Short squeezing requires a low float. This is about the worst stock anyone could try to squeeze as the paper is everywhere.
5) You're kidding right? The other insiders are sold $billions and continue to sell. Are you suggesting this one person knows more than the CEO, the board, and the rest of management? It's possible, but it's quite a stretch.
Either way: good luck! I don't get into short term moves. I suspect it might bounce Tuesday. I love the up bounces and the way towards its inevitable single digit price. They just create more opportunities for the rest of us.
All reasonable expectations posted here. Thanx.
I called a bottom at $18. Seems very unlikely we get down to $15 once the investors come back from vacation. FB is still the best speculative buy in the current market since and worth holding onto until December when a rebound will almost certainly occur because:
1. FB though hated by all is still the most visited web site in the world.
2. FB will soon announce its claim of 1 Billion user accounts and will be visible during the election.
3. FB is very cheap compared with its only other true analog - LNKD, which sells for 15x book.
4. FB will not drop much further since management will support soon to steady employee morale.
5. FB overpriced its IPO. But with 10 billion now in cash, they are certainly nearing fair value.
1. #$%$br />
2. #$%$br />
3. Unexpected? Are you kidding me?
4. What is $88M vs 1.22B that will unlock on Nov? I can cover everything in 5 Min.
5. $1M insider buy vs $1B insider sell. Who will you listen to?
Ignorance is bliss? You should look at my post "13 Reason to Buy Facebook. Not.". Just Bump for you.
Sentiment: Strong Sell
Most of the points you mentioned arevalid as well, however, sometimes the market might react differently. You have to agree that the market traded last couple of months with very light volumes.
I believe this Tuesday and Wednesday heavy trading volume will give us a clear picture on how this stock will behave till YE and through the lockup expiration milesontes. If the stock advances, then a rally till Oct 25 earning day will continue. The lockup expiration on Oct 14 will unlikely affect the stock since the earning will be just around the corner and investors will tend to hold on to the stock for another 10 days. Actually, a strong hold on the stock on Oct 14, will drive the stock up same it did with Yelp even before the earning day. If earnings are good, then nothing will stop this stock from going higher and the Nov 14 lockup will have no effect at all. It might even give another boost to the stock.
Take a look at RIMM for guidance about how insider buying won't work out for a company with deteriorating business outlook such as FB. RIMM did initiate stock buy-back program a couple of times to prop up stock prices only to have failed badly. It's now sitting firmly in sing-digit territory.
You are right about share buy-back programs that it can supress the stock price. However, here, it is just an individual insider investor is buying with his own cash which is not similar to the RIMM case. Also, if we compare the P/E of LNKD to FB, then FB stock is unfairly positioned.
Do you at least agree that ppl returning back from holidays might consider averaging down? This might be enough to set the stage for a pop that can be further fueled up by whoever lost money on this stock or by day traders.
A lot of wishful thinking for a short squeeze. And a forward P/E does not help your case but rather disproves it as earnings are not only falling but becoming dilluted as well. Counting on labor day is more of a gamble too. Consider the PEG also, as a rule of thumb growth is bought when the PEG is under 1. The stock is heading South.
Sentiment: Strong Sell
The opportunity for a short squeeze is limited in my opinion until FB actually does something positive. Fundamentals appear to be eroding every week a new announcement , new targets, less members, less advertising, less interest by users and advertisers etc, etc. The trick will be to manage expectations down low enough to meet them.The stock will not see a push up until the float is stabilized in 2013. 15 seems a reasonable value if they actually make some number and pull up against trrend the stock will move up from there. If not we could be talking hat size.
I doubt it...
you cannot change the fact that this stock only makes 29 CENTS per share with DECREASING revenues.
.29 X 15PE = $4.35
btw, a BILLION more shares on your way sooooooooooooooooon..............
Sentiment: Strong Sell
!. 1.4 BILLION shares till unlock by November and everyone with an I.Q above 75 who saw the impact of the first 280 Million unlocking knows what is going to happen to the price per share;.
2. EPS of a pathetic 29 CENTS per share;
3 P/E of 60 where P/E over 20 is realistic;
4. Insiders selling as soon as they can; and
5. Consistently and rapidly falling share price from $45 to $18 and associated massive loss of wealth.
Sentiment: Strong Sell
You might be right, however, your points mentioned can work in favor of FB.
1) Share unlock: Yelp shorts got bitten by the surge in the stock price that pushed the stock to 25% increase in a single day. This time they will short with very weak hands on the unlockup days, because if insider investors hold like they did with Yelp, FB might double in one day and Shorts will jump in to buy without hesitation the minute a hold signal is realized.
2) EPS for a Large Market Cap investing in smaller companies might have huge swings either way because the number of users.
3) P/E drop over the past 3 months, might make it lucrative for investors to buy.
4) Insiders started buying; $1M shares bought by Hastings.
5) Morgan Stanely and other major institutions heavily vested will not take any more losses anymore, they will use all tricks in the book and outside of the book, to set a pop for the stock before their next earning date