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Facebook, Inc. (FB) Message Board

  • miles14 miles14 Nov 12, 2012 9:00 PM Flag

    Why I'm short on FB in the short term

    1.) The 700m+ shares becoming unrestricted. Why should the pattern be any different than the two previous dates when 230m+ were released for potential sale?

    2.) 3:1 put-to-call ratio. The ratio increases when you look at only the past two weeks, suggesting an increase in bearish sentiment.

    3.) Their tax liability resulting from these restricted shares will negate any earnings in Q4, reducing the immediate short term outlook. This has also resulted in the company taking out a 1.5b loan to finance this payment.

    4.) 14.1b equity; 12.7b tangible equity; no earnings until 2013; yet valued 43b+; not the best value

    5.) BOTH Goldman AND Cramer recommending buys. That never ends well.

    I clearly jest on the last one, but on a serious note Cramer gets paid to be entertaining NOT necessarily to give sound investment advice. And GS has a long documented history of playing both sides. So what if they hold 20m or 40m shares, they have no legal requirement that prevents them from making plays (i.e. puts) against FB in the meantime.

    Sentiment: Strong Sell

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