Facebook (FB) – 05-25-2012

May 26, 2012 at 9:14 am · Filed Under Bullish, Growth 

I’ve gotten a lot of questions about FB so I figured I’d get my thoughts up here.  There’s not much point to posting a daily chart for 6 days, and I’m not touching this guy with a 10 foot pole on any trade that needs intraday charts yet.

So what about Facebook the company?  They have a ton of users and a very sticky service.  As hard as Google keeps trying, they just can’t make a dent in the social arena, even though they have technically nice products, because the critical mass required to get people off of Facebook has become so large.  What is FB bad at?  Monetizing all of these users.  For a company with far more demographic info than advertisers know how to deal with, I believe that will eventually come together though.  For now, they are on my favorable company list, along with GOOG, AAPL, AMZN, etc.

How does FB the stock look?  The IPO was a perfect example of why you should never place a market order overnight, especially on an IPO.  With so many retail investors trying to jump on the hot new thing blindly, the price popped at the open to the mid $40 range and marched steadily down to where it appears it may be stabalizing slightly in the low $30 range.  While all the scandals being uncovered aren’t good, if you’ve already read The Accidental Billionaires or watched The Social Network and are still considering buying FB, some additional shadiness from investment bankers probably shouldn’t affect your decision too much.  While this is a good reminder that FB is already a very mature company closer to GOOG 2006 than GOOG 2004, they still have enough potential that they aren’t MSFT yet.  I don’t position trade stocks until they’ve made it through their first quarter earnings call, but I’ll definitely be intrigued if there’s any type of base built and the first quarter looks good.


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