Friday, July 27, 2012

Facebook At $25: This Is Not A Glitch

Image representing Facebook as depicted in Cru...
Image via CrunchBase
Despite hitting its earning projections, Facebook stock falls to a new low at $25
UPDATE: Currently, the stock sits at $24.43, down 9% in after hours trading.
LinkedIn's earnings have doubled every quarter since it went IPO, and so its lofty valuation has held ground. Facebook's IPO was a nosedive, and part of it was blamed on some kind of a technical glitch, but that could not have been the full story.

For the size of its user base Facebook has lukewarm revenues, and there are no plans/signs of robust growth there. The revenue trajectory feels like a plateau, and hence the hammering.

This is what I said on May 23.

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