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FB shares have tanked since their IPO. |
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Released on Tuesday, August 7, 2012, 6:45 AM ET
Pittsburgh, PA (SpeculatingStocks) - Facebook, Inc. (NASDAQ:FB) is the second most talked about stock on Twitter, behind Apple, Inc. (NASDAQ:AAPL). FB investors are clearly feeling shaky with their shares and those buying in at the $20 - $22 level are hoping for a quick pop higher or a long-term revival of Facebook.
Several insiders sold on the IPO day including Mark Zuckerberg, Accell Partners, Peter Thiel, Goldman Sachs, Microsoft, Reid Hoffman and others. The IPO price was a dream scenario for Facebook.
Facebook generated so much buzz that retail investors went in head first to get shares. FB shares have trended down since and the company's fundamentals aren't much better.
In their first quarterly report as a public company, FB reported a net loss of $157 million and revenue of $1.18 billion. This is a low revenue number considering the company has a market cap of $46.9 billion and has illustrated Facebook's inability to capitalize on their hundreds of millions of users.
Facebook has not been able to monetize as well as LinkedIn. Professional data seems to be much easier to monetize than friend data. Monetizing friend data and posts could cause people to leave Facebook.
Investors may currently think that FB shares are a bargain; however, a lot of future potential is priced into shares and if that future potential does not come to fruition, and start coming to fruition soon then we could see FB drop to the $15 level or further.
To those that think Facebook is invincible, look at Apple and its downfall in the mid-80s, a few years after going public. A lot of talent and passion leaves companies after going public and virtually no company is immune to it unless the core is very strong and stays together.
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