Why Facebook stock at $23/share is still “currently” over-priced

Posted By on July 27, 2012

I spend a few hours each day focused on trading and inventing and have been regularly asked about my opinion on buying Facebook stock. My reply has often been that it is a great company and is one of the leaders (if not “thee” leader) in social networking, but Mr. Zuckerberg and Company hasn’t figured out a way to make enough money to support their $38/share IPO stock price.  After a strong  couple of days for the broad market due to indications that the U.S. Fed and European central bankers plan to infuse more money into the markets, Facebook stock (FB) continued to close down … not a positive sign.

Another valuation analysis came late in the afternoon from Dan Niles at Alpha One Capital who compared Facebook to Google and detailed the numbers. He convinced me that unless Zuckerberg can come up with a way to generate income from mobile ads, FB is still over priced at $23.70. (CNBC Video below)



Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.
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