FFS ok here's the situation. Most people initially expected facebook to be priced at $16-$18 per share on a lot less float. Clearly $38 on 421m shares is insane. Most people have facebook's fair value in the range $15-$20. However, a lot said even if it came down to that level they woudln't buy it until they had a clearer idea of fb's revenue growth plans. Incase you missed it, old ZB did just that a few days ago. So now, they are not going to try and develop a mobile device, that's a plus. There is approxiamtely 1 FB account for every 8 or so people on this rather quaint but beautiful planet. Profit was up somewhere between 60-70%, i forget the actual number. Think they also have around $10bn in their little piggy bank. Sure I read somewhere that FB handles around 1bn search queries per day. Point being people USE facebook. Someone smart will figure out how to monetize some of that use, in fact, I'm 100% certain someone smart is working on that right now.
So the ceo (ZB) has finally said something and whilst nothing revolutionary, don't underestimate how much reassurance someone at the top of a firm that is in the firing line coming out and reaffirming where the company stands and where it wants to go influences institutional investors. Afterall, it's not retail investors like you and me (well, you actually....that's a big hint!) that influences where the price goes over the long term, it is your large institutionals that do.
Now do you understand, why I was saying to my "colleague" that it might be worth buying in that range????????
it's only been trading for what 3 months, how can you analyse what it's done over the last year? it got sold from the outset, people that were long initially got (in some cases) severely burnt, you generally get the over-reaction in terms of selling. See what happened to Amazon after their IPO. In a case like facebook where the shares are so new, you can do some tech analysis but in all honesty, you have to get a feel for and understand investor sentiment. There was a lack of information coming from the top, the CFO and CEO had not made any statement of substance (if any at all) since it debuted. It is no coincidence, it has rallied since the CEO came out and clarified where the company stood.........
still a punt but it's not like it's going to fail next year or the year after, they do have quite a lot of cash and are starting to be a bit more proactive in terms of sorting out their ad strategy as well as monetizing the number of accounts held (1bn is quite a lot!).
If it hasn't tanked between now and the next earnings release, it's a definite buy IMHO!!!!!