Facebook Day 4

I am going to go out on a limb here despite the pre-market trading price and the opening over $32.00.  Facebook will finish the day under $30.00.  There is so much anticipation and optimism that this rally will sustain itself in the short-term.  But it will run out of gas by end of day.  None of the fundamentals have changed and despite the fact that Needham rates the stock a buy with a target price of $40.00, fundamentals and common sense will be the key words of the day.  The difference with this IPO and others is that it’s pretty simple to understand.  We know about the 900 million friends, the advertising revenue, the need to diversify.  It’s pretty simple.  At this point it’s just a matter of whether people will buy in to it now or continue to wait and see.  By the way, one thing I might not have said to this point is that long-term, IF Zuck and his team play their cards correctly, Facebook should be a blockbuster company.  But that’s a BIG IF.  It reminds me of a line from the original Wall Street movie.  Gordon Gekko says to Bud Fox, “you had what it took to get here, the question is do you have what it takes to stay here”?

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