Does Facebook now present a short term buy?

[Guest PandaFace]

Ok so things are a little bad from a publicity point of view, and it’s having a knock on effect for the index, but down near 12% on this seems like a big one. I doubt it really going to hit them once everyone forgets about this in a couple days / next week.

 

Consensus target 225 based on analyst quotes.

P/E of mid twenties

EPS growth of 18% from the prior year

Reported earnings always higher than estimates for the last two years at least.

 

Community thoughts?

[rimmy2000]

i reckon its got further to fall, around $135 I might be interested.

 

edit $125 

 

personally I see a greater correction.

[Caseynotes]

Interesting this, lots of chatter on twitter yesterday as it hit the 200 ma, was this a great buying opportunity? (as in Feb), the problem is the very real possibility the bad news is not over yet.

 

Reports of an emergency meeting today without Zuckerberg (Drudge Report), trending # to delete your FB account, calls for deeper inquires by regulators.

 

Might be worth waiting for the dust to settle and a rounded bottom to form before looking for a technical entry opportunity.

 

 

 

 

 

 

   

[Caseynotes]

Just to keep the salacious rumour mill going, people yesterday were waking up to the idea that when you sign up to a free social media platform you are not the client but the product. The clients are those organisations willing to pay for the mass data harvesting carried out by the social media companies.

 

True or not but repeated on twitter over the last few days, Zuckerberg has been summoned to appear before an EU committee and invited to appear before a UK one, the value of his stock has dropped by 8 Billion $, FB employees boasted of being able to influence elections, FB said to have given Democrats names and address of left leaning voters in swing states, plus lots of chatter regarding the depth and legality of the mass data harvesting and the potential for many regulator and gov enquires to follow.

 

It would seem this one still has some distance to run.   

 

  

[Guest PandaFace]

So you’re thinking a 30% pull back ? I’m sure you’d find buyers before then, especially if we get some data on how this isn’t effecting profitability.

 

IF however we see a report on ‘x’ number of people boycotting or deleting the app / logging off etc then things maybe different, but the figures for that will be probably inflated for a nice headline or misrepresented. Click bait.

 

Like the CNBC article about Zuk selling more shares than any other ‘insider’. Of course he has ya morons... he owns hella more. Still it got 60k upvotes on reddit (plus more by now I assume).

 

24 hour news is the worst thing to happen as people dig for ‘non news’ items.

 

I think you’re right. It’s the saying that’s like “if your not paying for the product you ARE the product” or something to that effect.

[Caseynotes]

The 16000 level still looks very vulnerable. 

 

 

 

 

[rimmy2000]

'So you’re thinking a 30% pull back @rimmy ? I’m sure you’d find buyers before then, especially if we get some data on how this isn’t effecting profitability.'

 

I am just saying that is where I would begin to express interest. There will no doubt be buyers before then - there would have been buyers at 195, but buyers doesn't mean the price won't go lower :smileyvery-happy:

 

Don't forget the market is always forwards looking, so it may not affect profitability, but there is a quote to heed: something like " reputation takes a lifetime to build up and a moment to destroy'

 

 

 

[rimmy2000]

our research does not have to just be limited to balance sheets and annual reports

[Guest PandaFace]

This is very true. I guess by definition you see buyers all the way down the price action... There’s a very funny photo going around with Zuk dressed up like a cyborg. Would strongly recommend someone posts it (can’t as on mob)

[Caseynotes]

Continues down in it's search for support as the bad news keeps coming. Article in the Guardian yesterday that the data harvesting goes back as far as 2013.  https://www.theguardian.com/news/2018/mar/22/facebook-gave-data-about-57bn-friendships-to-academic-aleksandr-kogan

 

 

 

[rimmy2000]

I also think for something like facebook it owuld be worth overlaying the chart with the wider index in which it trades, or a standard US index S&P500 or DOW. Would be interesting to see how it fares against an major index as I think general market weakness with affect stocks with lofty weightings a lot (I include Twitter in this statement, btw) 

 

I will try and do some more on this through the week.

[Caseynotes]

Bad news keeps coming. Fed Trade Commission confirms investigation. 

 

 

[Guest PandaFace]

All the way down to below 150~ before a relatively large 6% ish bounce. Bull trap anyone?

 

I didn’t bid, thank god, but those 125’s could be in range

[Caseynotes]

Zuckerberg declined the invite to appear before UK parliamentary committee but he did say he was sorry. The realisation of the degree of 'surveillance' is still spreading though and is bound to hit company numbers.

 

 

https://twitter.com/twitter/statuses/976549911759147008   (cut down 2 min, if the link works?)

 

 https://t.co/POo4Bz3uwZ   (Full 20 min)

 

 

[Guest PandaFace]

*deletes Facebook app from phone*

*goes on basically any other site and needs to login*

“Login with the Facebook app HERE”

*redownloads the Facebook app”

 

...gawd **** it

[Guest PandaFace]

So Facebook isn’t look too pretty right now. However it can't really grow when 81% if all Americans already have a Facebook account. 

Facebook also has 7% more users in the world then people that have internet.  58% if the world population have a Facebook account but only 51% of the world has internet.

[Caseynotes]

The monthly chart does not look good and highlights the problems of the last 7 months.

[rimmy2000]

getting more interesting..  but not there yet...!

[Caseynotes]

I'll throw this into the mix as we are discussing FANGs and downturns, something that caught my eye yesterday. The 50/80 rule is a new one on me.

 

[JamesIG]

interesting point there @Caseynotes - I'll bring that up in our weekly content planning meeting with our analysts. Would be an interesting slant on an article. Looking at the monthly candle chart over the 16 years despite it not being earth shaking, you can see a 470% increase post crash. 

Would that be considered poor over the long term time frame? Compared to the recent movements in some new tech, yes. As a solid long term investment and div payer? Maybe not...

[trade247]

The biggest ever one day wipe out of market cap on a single equity I believe? Suk himself lost $16 - $17 billion. Company itself was down about 120bn by the EoD. So many analysts going into the new were long so this was a massively over inflated stock no wonder the pull back.

all these tech stocks are well over values in my opinion.

[trade247]

...says the crypto trader  

[Caseynotes]

Zuc has never seen a fall like that and that's the second sudden drop in the last 6-7 months, he might well take a peek at the bitcoin chart and seriously wonder about the safety of the other 4 fifths of his net worth.

[Guest PandaFace]

Could you expand on the 80 50 rule? I don’t get it and where has he got this ‘fact’ from? Is it a well known thing? 

Edited July 27, 2018 by PandaFace

[Caseynotes]

I wouldn't call it a 'fact' - probably more a rule of thumb ?. Mark Minervini is the author 'Trade Like A Stock Market Wizard' and has a 30 year trading history. As I said, this is a new one on me, but I suspect it came out of the tech bubble crash of 2000 and was a generalisation formula based on observation as these rocket ship tech companies fell back to earth (cisco being one of the highest flyers), any similarity to crypto today I wonder? 

[rimmy2000]

FB relative to NASDAQ index and is weekly MA.