July 31, 2012
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Facebook Shares Could Fall Another 50%
I hope you're right that it falls another 50%. I want in REALLY CHEAP. I think you've fallen into the same trap that every other numerical analysis has fallen into. What is the projected revenue per user? Since nobody can figure out what that should project to, bearish analysts assume that it will stay the same and all unsurprisingly come to the same conclusion. Facebook isn't going to grow revenue very fast if you keep projected revenue per user constant. It doesn't take Sherlock Holmes to figure that one out.
I don't think even the most bullish investor or analyst would even argue with you. To make your analysis credible, you need to defend that position. Why should it stay constant? Why will Facebook users spend less on average than a candy bar in advertising revenue? Why will Facebook fall face first so dramatically in their quest to monetize their user base? That is where the real analysis on Facebook resides?
Disclosure: I have no Facebook position, but would jump all over a chance to get in if it dropped another 50% from here.
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