All Stories

Facebook – The Stock Price will collapse before Thanksgiving – Target still $7.30

Tom Winnifrith
Wednesday 1 August 2012

I have written here a number of times that the Facebook (FB) stock price will collapse. So far so good. Shares in the Nasdaq darling now trade at $21.71 down from a $38 IPO. But folks, it is about to get much worse. Much much worse. This remains a stonking short ( perhaps the No 1 big cap short on this planet) and if you were stupid enough to buy the shares I would get out now. They will have halved again ( or worse) before Thanksgiving.

Why $7.30? Well read my analysis HERE – even at that level it would still trade on a premium rating. But I was being generous with that valuation since. a) the quarterly earnings numbers the other day highlighted to anyone with half a brain cell that there is no real earnings visibility going out for more than a few months and that some key metrics (revenue per user) are already trending south. And b) those law suits from those folks who bought into the IPO and claim they were misled have not gone away. Another duff quarterly earnings statement and a further share price collapse and things could get nasty in the Courts. What profits Facebook actually makes by persuading advertisers to try to sell to its half-witted user base could be swallowed up many times over by legal costs and damages before this is all concluded.

So why the impending share price collapse?

on ADVFN | Comments
About Tom Winnifrith
Bio
Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
Twitter
@TomWinnifrith
Email
[email protected]
Recently Featured on ShareProphets
Sign up for my weekly newsletter








Required Reading

Recent Comments


I also read