Facebook Inc (FB) Nears All-Time High: Wall Street Goes Wild


Facebook Inc (NASDAQ:FB) shares hit a high of $44.61 on Friday’s market, this is the new 52-week high price the company’s shares have ever sold for, and not the first high in the last couple of weeks. Investors are impressed with the momentum behind Facebook and the company’s progress. Their faith in the company may not be warranted, and it should not be given so freely.

Facebook Inc (FB) Nears All-Time High: Wall Street Goes Wild

Last year when Facebook Inc (NASDAQ:FB) went public the market erupted with vitriol. The Facebook IPO was a sham and a disaster. The company’s shares were badly priced and the stock exchange was broken. Facebook Inc. (NASDAQ:FB) is worth a lot more today than it was on IPO day, why have investors pushed the price up?

Odey Special Situations Fund took on several new positions in March

Crispin OdeyOdey Asset Management's Special Situations Fund was down 3.2% in March, compared to its benchmark, the MSCI World USD Index, which was up 3.3%. Through the end of March, the fund is up 8.7%, beating the benchmark's return of 4.9%. Q1 2021 hedge fund letters, conferences and more Odey's Special Situations Fund deploys arbitrage and Read More

Mobile monetization

The current rise in Facebook Inc (NASDAQ:FB) shares started in earnest at the end of July. The company released its earnings report for the three months ending June 30. Earnings numbers were higher than expected, but the big change was the company’s mobile monetization. The earnings showed that Facebook Inc (NASDAQ:FB) had gone a long way toward making money off of its mobile users.

One of the factors that was shaking the value of Facebook Inc (NASDAQ:FB) in the run up to the IPO was the lack of clear guidance on the firm’s mobile monetization. Facebook has now shown that it is able to make money off of mobile users, and it is able to retain the attention of those on mobile.

That means that the company is future proof, to some extent at least. Investors looking at the company and deciding that mobile user figures were the only thing holding back the company’s value are getting back in. There are other things wrong at Facebook Inc (NASDAQ:FB) however.

What is the value of Facebook?

Facebook Inc (NASDAQ:FB) is a difficult company to value because it’s entire business model is based in potential. The company is able to stand on its own two feet now, and advertisers are happier with the firm’s service. Facebook is still valued at close to 170 times earnings. That’s not exactly the sign of fair pricing.

If Facebook meets analysts expectations for this year it will still be trading at 60 times earnings. Facebook Inc (NASDAQ:FB) shares are going up, but that’s not a reason to buy in. Shareholders in the Menlo Park firm should watch the chart closely.

No posts to display