Let us be clear: We hate Facebook. We hate Facebook for the same reason we hate LinkedIn… both of these social networking sites have:
- replaced real human interaction in the business and social world, when really they should be augmenting it
- tricked people into providing access to their email inbox and bombard the contacts of those who fall for it
- implemented loose (call it immoral) privacy policies… remember: you are not the user, you are the product
- have stock valuations that are far above their fair value
Facebook just became a $100 billion (with a ‘b’) company in terms of market cap. To maintain this high-flying stock price Facebook must find ways to make a lot of money fast, otherwise their holiday party is going to be a real downer this December. If you’re running Facebook, what do you do with your marginal advertising revenue (disrupted by increasing mobile use) and over 1 billion users? You monetize every last ounce of flesh out of your user base, and this requires that you do a whole lot of bad things you probably wouldn’t even do to people you don’t like, let alone your own visitors.
So Facebook is poised to make a lot of money at some point in the future by doing a lot of not-so-nice things like rifling through inboxes and selling personal information, and that’s why the stock price is so high today – it has a good story to tell which captures the imagination of the retail investor.
But we’re tired of seeing our friends and family lured into the siren call of hot social tech companies which can turn out to be a total crap shoot. It’s for this reason we made our algorithmic trading signals public and created the Facebook Stock Predictor and posted it on our web site for everyone to see – because if the ones we love want to invest their money in speculative and volatile social media plays, then we hope they at least use our signals to time their investments properly.
Then after the price pulled back we warned people again not to sell, and it went even higher today to test it’s all-time high.
The short sellers must be ready to throw themselves out of their respective windows right about now, and they will likely have their day, but for now our proprietary indicator suggests that this stock is winding up for a blow-off top before there is any significant pull back.
Are we saying you should buy Facebook now? No, absolutely not. Are we suggesting that you should short it? No! (go back and read our past posts). We are merely saying that if you were one of the lucky ones to have bought back in June, you might want to hang on for a bit before locking in your profit.
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The content contained in this blog represents the opinions of the authors who may or may not hold long or short positions in securities of various companies discussed in the blog based upon the authors' views. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied solely upon in making investment decisions, ever. It is intended for the entertainment of the reader, and the authors. In particular this blog is not directed for investment purposes at US Persons.