Ask anyone about Facebook’s stock and the conversation gets pretty heated and emotional. FB is down more than 30 percent since its debut on Wall Street, and so it’s unlikely too many investors—at least those early buyers—will be breaking out the bubbly.
You’ll recall, Facebook came public at $38, surged 18 percent to $45, but fell back with a gain of only 23-cents on that first day of trading. From that disappointing start, the stock began a rapid decline, getting as low as $17.55 in just three months or so. Today it stands at $26.
I had a bad feeling about Facebook when one of my good friends told me on the day of the Facebook offering that he had just plunked down $20,000. That was a big chunk of his savings. He’s not an investor type. He doesn’t own any other stocks. He didn’t do any research on Facebook. But he heard that Facebook was the “It” stock to own and was set on making a killing. He was convinced he would double his money after a few days. But he got burned. He sold his position at $28 after a few weeks. But he was actually one of the lucky investors because he cashed out early on.
So here’s Facebook on its one-year anniversary and there’s a lively debate on whether it makes sense to buy FB at $26. Half the analysts on Wall Street have a “buy” rating. Most of them believe the company’s business outlook is improving. They say Facebook is a stronger business with healthy earnings and a growing mobile ad business. The critics don’t think the company can grow revenue fast enough to justify the stock’s high valuation and they cite that user growth is slowing down and time spent by users is dwindling.
How would you grade Facebook? Is Facebook making the right business moves? Are you a buyer or a seller? Tyler and I will be talking with two Facebook analysts about this tonight on Nightly Business Report. What questions would you like us to ask?