>>If the stock falls below 15-16, the company could be done. <<
I totally disagree. The key will be their next earnings report. Many IPOs fail initially, only to survive the long run. Many stocks are overpriced during the IPO process. Sure, there aren't many with the size and branding as Facebook but its way, way too early in this process to say FB is done.
The timing of today's downgrades and revisions is normal Wall Street stuff. Bring in extra fear before the 3 day weekend and get everyone to keep talking about how this is the worst stock ever.
I guess I look at it very differently. I saw the IPO as being about 40% over priced. In hindsight, it was probably more like 50% over priced but that's not really all that uncommon. The driver for the company's stock in the short term is negative headlines. Day after day, week after week. Ok. That' the way it is and so what?
In the final analysis, it's what the company creates, how they turn revenue into earnings or fail to do so. We don't know the answers to these questions yet. The early shareholders are voting with their feet. Ok. We've seen this before.
JMO but I will repeat, it's way, way too early to write off this company.
Writing the above should not be considered, in any way, a recommendation to buy the stock.
There will be enough time for that once the next earnings report is available for evaluation. Until then, this is a great trading stock with a downward bias....nothing more. The liquidity makes for easy entry and exit. The large sharks will continue to nibble and keep the water bloody until they either drag it down for the kill or the company does something to reverse the sentiment. In this environment, either sit on the sidelines or use the trend as a basis for trading.
TO |
