FB almost has moved against the market everyday. In a day that market goes up like 3%, FB can drop 10%. No correlation. CSCO, INTC, MSFT should double their profit iorder their stock to go up 2% but FB and GRPN fart and expect their stock to double. Really what kind of business GRPN is in? 7B market share to sell junk coupons that you don't even pick it up free from the floor? 60 cents loss per share? How long can you stay in the market by selling $15 Amazon GC for $5?
You have no idea how difficult it is to establish a new social site like facebook, once you got 30%+ users switched over then yes the snowball effect takes over, but to get the initial 30% to switch is very difficult. The barrier to entry is extremely high for this space, not so much to create the site but get people to use it. In regards to myspace, i dont know if you used it, but it was absolutely shit, those 3rd grade webpages they have with the awful mind numbing backgrounds. The chance of facebook losing out to another competitor is slim, the real question is when (if ever) will they find a consistent way to profit from their users like google did. Expecting good things at wwdc on the rumored ios + facebook integration. note: i am long 600x at $26.77 in my ira, long term position.
I think the newguy has framed the question almost correctly. it will not boil down to whether their soon to be billion+ users can be monetized (they already are) but whether the net income from that process propels this into the ranks companies that has created large and growing long term shareholder value. That is what the jury is out on. I see no reason to bet either way on the verdict.
Think outside the box. It's all about mobile apps now and Facebook's mobile app is shit. Additionally, Facebook cannot monetize any mobile device user, which are like half of their userbase,.. This is all beside the point that their userbase in 1st world is slowly declining and it's China that is feeding their "growth". Kinda obvious which userbase is prime for monetization and which one is not.
The Short SQUEEZE is on! How high will it go? Not good for the top half of my July Iron Condor! :eek:
FB, GRPN and ZINGA will falter soon. A wise investor does not bet on a few days action. Don't you ever think that big traders are taking profit today? GRPN was upgraded today so its effect will evaporate today.
I opened the Iron Condor on June 4th with a Top Level of 30 - not quite high enough it seems. Oh well. Will probably close out for a small loss sometime this week, after FB comes back in a bit. Also Long in LNKD which is part of the same group. It's been doing quite well lately too.
I am short GRPN, FB and ZNGA and long YHOO. Specially GRPN should get hammered soon. FB will not get hammered. Only will go down. Big investors won't bet on FB yet. ZNGA is a also a piece of crap. Lots of good news and potential for YHOO in the buffer.