>I wouldn't bet against Facebook just because some cranky financial experts want me to believe they know where Facebook is headed. They don't know. Nobody knows.
The last two sentences are precisely why analysts are "cranky" and institutional ownership of this stock is so faint.
A reasonable investor makes an investment decision based on the info they have and the prospect of discounted future cash flows. At this point it is clear not even Facebook management really knows where they're headed. Just where the money is. How does a reasonable investor value that? I wouldn't bet on facebook at any price just because they have critical mass on a free social network today.
Edit: What I meant by the last statement was that valuation matters. Obviously there is a price at which Facebook stock is fair or even undervalued.
The last two sentences are precisely why analysts are "cranky" and institutional ownership of this stock is so faint.
A reasonable investor makes an investment decision based on the info they have and the prospect of discounted future cash flows. At this point it is clear not even Facebook management really knows where they're headed. Just where the money is. How does a reasonable investor value that? I wouldn't bet on facebook at any price just because they have critical mass on a free social network today.
Edit: What I meant by the last statement was that valuation matters. Obviously there is a price at which Facebook stock is fair or even undervalued.