Anyone Betting on Facebook?

From SeekingAlpha:

Facebook's (FB -1%) closely-scrutinized advertising ops receive new endorsements from Ford (previous) and Coca-Cola. Execs praise Facebook as an effective means of engaging with customers, though they say little about its ability to directly drive purchases. The comments arrive as Evercore's Ken Sena starts coverage with a Hold, expressing concerns about mobile payments, slowing PC usage growth, and a late August share lock-up expiration. (also) Comment! [Tech]

 

Even if earnings beat estimates how significant is that improvement capable of being? Do we know of any additional means to earnings that didn't exist last quarter - anything that might bring P/E under 80 or so?

FB has enormous goodwill value but if they had ways to better exploit their position wouldn't they have done that by now? Why would they delay revenue-generating devices 'til after the IPO?

Zuckerberg indicates that his motives for maintaining control are more about wanting to head a socially meaningful institution than about growing his equity. Not a good indication for FB profits.

 

Would we have expected him to say that he did not want to ever be
thrown out on his ass as Steve Jobs once was? Given how he treated his first provider of capital I think his protestations ring hollow.

 

Before throwing in the towel, think I'll give FB till next week to fall back into the 20's. A couple of bad days would do it. We'll see. [/B][/QUOTE]



Out the window with that idea!
Too Much Squeeeeeeeezzzzeeee above the 30 line for me.
Closed the July Iron Condors for a (Not Max at least) Loss....
:eek:

 

SAN FRANCISCO (MarketWatch) — I was hoping that retail investors would steer clear of Facebook Inc. shares on their opening day.

Knowing how much value had been taken out of the company in private markets, and how high the stock’s price-to-earnings ratio was at its public debut, it was clear that get-rich-quick thinking wouldn’t end well. But despite at least half a dozen warnings from this column and from many other quarters about the hazards of joining the first-day frenzy, some rushed in. Check out previous Tech Investor columns on Facebook.

Now, one month after the biggest tech IPO ever (FB), new data from an online portfolio-management company shows how much it cost investors to be left holding Mark Zuckerberg’s bag on opening day.

True to form, those investors are still holding on. Two-thirds of the 10,000 members of SigFig.com who either acquired IPO shares or bought them on the first day still own them, according to the latest data from the San Francisco-based firm.

“Facebook wanted more retail involvement, and they got it,” said Terry Banet, the chief investment officer of SigFig who compiled the figures. As of Tuesday’s close, such investors were sitting on an average loss of 16% one month into their Facebook adventure.

A broad swath of IPO investors took the Facebook plunge, as the number of SigFig members who bought the stock was more than 10 times the amount that had bought shares of either Zynga Inc. (ZNGA), Groupon Inc. (GRPN), LinkedIn Corp. (LNKD) or other Internet stocks that went public last year.

When you sell 421 million IPO shares, as Facebook did, there’s plenty of pain to go around. The SigFig users who bought on opening day paid an average price of $39.70, the data show.

Given the issue’s dismal performance in its first month of trading, those folks who sold suffered similar losses, of 17%.
Reuters
Those who flipped the stock on opening day — about 7% of the total, or 700 traders — were lucky to get out when they did, as they averaged a loss of just 0.5%.

As is usually the case, retail investors bought their shares when company insiders were selling, then held them just long enough to lock in their losses. “As the price dropped, we saw selling outpacing buying,” added Banet.

Those who bought on opening day will at least be able to take some comfort in the fact that those who got in on the IPO fared little better. In other words, everyone got skinned to roughly the same degree.

Almost one in five SigFig users who bought Facebook got the stock at its IPO price of $38. That same lucky 18% sold for a median price of $33.20, giving them an average loss of just under 13%.

Now that the stock has bounced off its near-term low of just under $26, holding on to Facebook shares became a more rewarding strategy over the past two weeks, compared with the previous two. (The stock closed Wednesday at $31.60, down 1%.)

The irony, of course, is that the bounce occurred even though Facebook’s second-quarter earnings estimates have been coming down.

I wrote in an earlier column that Facebook would report seasonally strong sales in the second quarter, if its business trends of the last 18 months held. Read more about Facebook’s lumpy sales cycle.

Given that and the massive amount of Facebook selling that’s already taken place, momentum traders may start to get into the stock ahead of the mid-July earnings report.

That could be a viable short-term trading strategy, as long as you hedge your bets with bearish options and remember that it will be a bet, not an investment.

Even though the stock has an unusually large float for a social-media issue, the underwriting banks can still move it if they really want to, and will be able to until most insider lockups expire in about five months.

For those of you thinking about Facebook for the long term, the stock is still expensive, and its record of hitting financial forecasts remains unproven.

But as Facebook holders know too well, at least some of the pain of owning the stock already has been suffered.



John Shinal, a former technology editor of MarketWatch

So do the banks really want to?

 

I'll answer my own question.

Yes, they'll use other people's money to buy FB as high up as they can in the hopes of weaselling out of the 5000 lawsuits pending against them.

 

Stephan31 has gone dark. Sent him a PM yesterday but no response. He's been lurking, however.

 

Anyone Betting on Facebook?

I am long. I started my position at $19.00.

 

I don't think anyone in his right mind would be long FB except swing traders. If anyone could answer just my simple question, I am ready to sell my arms and legs and invest in FB. Till then I will only short FB. Here is the question:
FB IPO was $38 and then it went up to $42 and since then it has dropped and the lows was $17 something. Zukerberg appologizes about stock performance but is optimistic on FB. At the same time, the heavy rich bloated insiders are selling the shares like there is no tomorrow. If they had a 1% faith that FB will go up and is undervalued, I bet you they would keep their shares but they don't. You cannot say that they are selling their shares to pay their mortgage. If I were an insider and knew that next month or in 3 months, I would be able to sell the shares at $24, I would hold on to my shares. Believe me, FB will tank and will tank hard. Very soon, we will see FB drops $3 in a day and makes another 52 weeks low. Online ad business is very popular but no way FB can compete with GOOG or YHOO or...

 

Peter Thiel sold about 20 million shares, and is still holding about 5.6 million shares. So he sold almost 80% of his shares. That means he still has 20% faith that FB will go up and is undervalued.