Monday, June 3, 2013

Why Wall Street's Just Not That Into Facebook Anymore

Dan Nathan, Risk Reversal’s Dan Nathan writes: |”From FB’s May highs on the 2nd to the lows this past Wednesday, the stock nearly entered official bear market mode, down almost 20%, before bouncing after receiving a couple ratings upgrades yesterday by Jeffries and BMO  .”

“….The next couple trading days will be very interesting for this stock to see if in fact it can stabilize above support or it just resumes the downtrend.  One of the big reasons in my mind for the stock’s under-performance this year vs the broad market and its peers has a lot to do with the sentiment towards the products and possibly a lack of understanding by investors as to how FB will increase user engagement with their services, whether they be on their computers, tablets or smartphone.  It is my opinion that to date as a public company, FB management has done a poor job of introducing products like Social Graph and most recently Home whereby they tried to take a page out of Steve Jobs playbook by announcing a media event and roll out the founder for the big splash………but in Facebook’s case, it almost every major product announcement had the least bit of “Wow Factor attached”.  Zuck risks being the “boy who cried wolf” with too many product misfires….”

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