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Facebook Rally Is a Long-Term Buy Says Kilburg


In its short, ugly and brutal life as a public company Facebook (FB) has made a lot of enemies particularly among those who bought the stock at or near the $38 a share IPO price. In the attached clip Breakout talks to one of the few professional investors willing to confess to owning the stock and still liking it, Jeff Kilburg, CEO of Killir Kapital Management and a CNBC contributor.

Kilburg is quick to give credit for FB's bounce out of the teens and into the mid $20s to the company's publicity-shy CEO. "Tip of the hat to Zuckerberg," says Kilburg, "he actually did what he promised."

What Zuck did was start to deal with his company's thorny problem of mobile monetization. Revenues from mobile ads were better than expected last quarter and many think there's more to come. Beyond that, Facebook has barely scratched the surface on vertical opportunities, giving Kilburg and other bulls optimism that FB will be able to grow into its still lofty valuation.

Essentially the bulls all make the captive audience argument. Facebook has over a billion active users by their definition. Surely there must be some way for a smart guy like Zuckerberg to make money off these people. Bears counter that those billion users can and will leave as soon as the FB experience becomes too laden with ads aggressive in exploiting user information. History says that the digital age means there are no "captive audiences", just a bunch of users endlessly searching for something better.

Kilburg is less skeptical. "I'm on Facebook, you're on Facebook, we all love Facebook!" he shouts. For the sake of his position he better hope it stays that way.