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Shah Shares His Latest Views on Microsoft, Apple and Facebook

During the last nine months, retired hedge-fund manager Shah Gilani – who runs the Capital Wave Forecast and Short Side Fortunes advisory services here at Money Map Press – has gone against the Wall Street “crowd” in recommending Microsoft Corp. (Nasdaq: MSFT), Apple Inc. (Nasdaq: AAPL) and Facebook Inc. (NYSE: FB) to Private Briefing subscribers.

As usual, it paid dividends to heed Shah’s advice…

  • Facebook Stock Quote

  • If this Works, Facebook Stock Could be the "Buy of the Decade" Company Facebook like small

    Facebook stock is one of the most controversial stocks in existence today.

    With one billion users, investors have been waiting to see if Facebook's business model can pay off, especially after its IPO tanked.

    Today, Money Morning's own e-commerce director, Bret Holmes, is going to give you the inside scoop on Facebook stock. Not some theoretical financial analysis, but what the future looks like for Facebook, from a guy who understands e-commerce and can explain how Facebook stock could be the "buy of the decade" for investors.

    Click here to watch the interview.

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  • What is Facebook Home – And Will it Do Anything for Facebook Stock? Company Facebook 2

    The much anticipated announcement from Facebook today (Thursday) has left us investors with two questions.

    The first, what is Facebook Home?

    The second, is this finally the development that CEO Mark Zuckerberg needs to rally investors behind Facebook stock, and lift it back above its IPO price of $38?

    The social-networking giant Thursday unveiled Facebook Home, a customized homescreen for Android smartphones. Facebook Home highlights all things Facebook - a dream come true for anyone who loves the social media tool.

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  • Facebook IPO Deal Leaves Wall Street Seeing Red Company Facebook dislike

    The U.S. Securities and Exchange Commission on Monday approved Nasdaq's plan to pay $62 million in compensation to brokers for mishandling the Facebook IPO. The Nasdaq missteps during Facebook's (Nasdaq: FB) debut cost Wall Street a collective $500 million and firms have fought to recoup those losses.

    The amount was cleared by the SEC after Nasdaq offered to pay more than is allowed under its existing bylaws. As a self-regulatory organization, the Nasdaq enjoys certain legal protections which could have resulted in a significantly smaller settlement.

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  • Can Mobile Really Drive a Facebook Stock Rally? Company Facebook 2

    One of the reasons Facebook stock (Nasdaq: FB) hasn't fared better since it started trading - it's off 25% from its $38 IPO price - is the company's failure to profit from increased mobile activity among users.

    But now, less than a year after Facebook's acknowledgement that it needed to monetize its growing mobile member usage, the company bills itself as a truly mobile company.

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  • Facebook Stock Downgrades Keep Pouring In Company Facebook dislike

    They say third time's the charm, but no such luck for Facebook stock, which fell even though the company's third earnings report since going public beat expectations.

    The numbers failed to charm Facebook Inc. (Nasdaq: FB) investors who expected the report would offer more to like, and analysis who found plenty of concern in the expenses.

    The social networking giant posted earnings per share of 17 cents, better than the consensus of 15 cents. Revenue came in at $1.59 billion, up 40% year over year, and ahead of forecasts for $1.53 billion. However, fourth quarter profit slumped 79%, dragged down by higher costs.

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  • Facebook Stock Fails to Rally as Lockup Ends Facebook stock (Nasdaq: FB) fell more than 5% Friday as some 156 million shares held by early insiders and employees were freed from a lockup period.

    It marked the fourth time a torrent of the social networking giant's shares were let loose for trading since the company's hugely hyped initial public offering (IPO) on May 18 at $38 a share.

    The reaction to the sizable release of shares has been mixed.

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  • Facebook Stock Rises Despite These 852 Million Reasons to Fall It's difficult to think that an additional 852 million shares of Facebook stock hitting the market wouldn't weigh on the already struggling share price.

    That's why, for the third time in nearly as many months, Facebook Inc. (Nasdaq: FB) on Wednesday braced for what could have been the largest selling spree yet to hit the social networking giant.

    Scores of early investors and employees were at liberty to sell 778 million shares. Another 31 million in restricted stock, awarded to employees who joined the Menlo Park, CA-based company prior to 2011, were also unbound, along with 48 million shares held by former employees.

    The staggering number is almost equal to Facebook's existing 921 million share float, according to data from the company's most current filing with the U.S. Securities and Exchange Commission.

    But, a strange thing happened.

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  • Congrats on One Billion Facebook Users… Who Buy Nothing Facebook (Nasdaq: FB) is on the cusp of amassing one billion users, unarguably a milestone.

    The last official tally of Facebook users was 955 million. Employees have become giddy in expectation of reaching the one billion mark any day now.

    But, they might want to hold off tossing confetti, because the momentous occasion will also shine a bright light on the social network's shortcoming.

    No matter how many users Facebook acquires, if it can't sell anything, the landmark number is useless.

    As Owen Thomas of Business Insider wrote, "Bottom line: One billion users isn't cool. You know what's cool? Two billion."

    Facebook Sales Estimates Slashed

    The failure to monetize that many subscribers is a shame because Facebook's massive user base is an advertiser's dream if effective - but there have been no signs of future revenue growth.

    That's why market research firm EMarketer Inc. recently slashed its projections for the Menlo Park, CA-based company from $6.1 billion in annual sales to $5.04 billion. Facebook continues to struggle for advertising growth, in particular the fast growing mobile market.

    [ppopup id="70925"]That’s why Facebook stock should really be trading for this amount. [/ppopup]
    An increasing number of Facebook users are now accessing their accounts via smartphones and other mobile devices, an area where Facebook collects a great deal less in ad revenue than it does on desktop access.

    Facebook enjoyed an 88% revenue increase in 2011. EMarketer estimates Facebook revenue will rise only 36% this year and 31% in 2013.

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  • Another 1.7 Billion Reasons to Avoid Facebook Stock As if there weren't enough factors to make Facebook (Nasdaq: FB) stock unattractive, there's a flood of free shares about to hit the market that could make it even harder to raise the share price.

    In two weeks comes the first expiration of "lock-up" agreements, meaning certain investors barred from selling their shares will then be able to do so. Typically employees and big investors are required to hold shares for a certain time period after an IPO. This is done to reduce selling pressure and the chance of a mass exodus as soon as the stock starts trading.

    But now some of those investors' shares will be freed up, and they want to cash in.

    Editors Note: Why Facebook’s “Big No-No” Could Lead To Its Big Collapse [ppopup id="70925"]Click here[/ppopup].
    Nearly 1.7 billion shares of Facebook stock will enter the market over the next few months, starting in mid-August. That is more than four times the number of shares now floating on exchanges.

    "It's like a train coming around the corner toward shareholders, so they better get out of the way, Francis Gaskins, president of research firm IPOdesktop.com, told the Los Angeles Times.

    The first batch of 268 million shares will be freed up in mid-August, followed by 192 million more shares in mid-October, and a whopping 1.2 billion shares will be let loose in mid-November.

    Granted, a slew of those shares will not be sold, but the fresh torrent of shares to be set free far outnumbers the 421.2 million shares Facebook sold in its fabled IPO.

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  • Will a Weak Facebook Earnings Report Open Doors for these Competitors? We know investors will want a few key details from today's Facebook earnings report, like how much more user growth the site expects, if it can increase ad sales and how it'll tackle mobile usage.

    But something people haven't questioned as much is if there are any competitors lurking in the shadows that could eat away at Facebook's online presence.

    Turns out Facebook has reason to be concerned.

    MarketWatch's David Weidner last week addressed some competition creeping into Facebook's world. In his article "Here's the app that could kill Facebook," Weidner detailed how an up-and-coming app could actually threaten Facebook's hold on social networking.

    Tack this on to the list of reasons to avoid Facebook stock - in case you needed any more.

    Path: A Facebook Threat?

    The app in question is called Path.

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  • Three Reasons the Facebook Earnings Report Will Disappoint The Facebook earnings report for Q2 will be released Thursday after market close - meaning investors have a chance to see if concerns over Facebook's revenue and growth are warranted.

    It's only been two months since Facebook's (Nasdaq: FB) long-awaited May 18 IPO. The day didn't exactly turn out as planned with Nasdaq's technical problems delaying trading and a measly one-day gain of 23 cents.

    The result has been a lingering frustration among investors who hoped they were buying the next big tech stock - and are now in the red.

    Since then, Facebook stock has fallen 24%.

    A lot of expectations and answers should come with the Q2 earnings Thursday, but we're not so sure they'll be the answers investors have hoped to hear.

    Here are three reasons we think the Facebook earnings report will disappoint.

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  • Facebook Stock Price Hits Low – Can this New Strategy Help? After hitting a new low of $25.75 on Tuesday, Facebook (Nasdaq: FB) stock slid further Wednesday morning despite a nice rally for U.S. equities.

    With the Dow up nearly 90 points right after the opening bell, Facebook shares edged down to $25.68 in early morning trading, reaching another new low. Shares now sit more than 30% below the IPO price of $38.

    Weighing on Facebook Wednesday was news that the Nasdaq Omx Group (NDAQ) will tell brokers exactly how it will recompense investors for the myriad trading problems during the Facebook IPO frenzy. Problems at Nasdaq contributed to order issues that prompted several class action law suits.

    But what drew more attention from investors was a comment by Ironfire Capital founder Eric Jackson. The analyst appeared on CNBC's "Squawk on the Street" program Monday and said that Facebook will lose its dominance as a social network in less than 10 years.

    Jackson highlighted Facebook's inability to make leeway in the thriving and prominent mobile arena, as well as the stock's steady tumble since the company's epic IPO.

    The comments have triggered suspicions that Facebook will suffer the same fate as MySpace, once the dominant force in the social networking circle, and Yahoo (Nasdaq: YHOO), once a leader in Internet search.

    "In five to eight years they are going to disappear in the way that Yahoo has disappeared," Jackson said. "Yahoo is still making money, it's still profitable, still has 13,000 employees working for it, but it's 10% of the value that it was at the height of 2000. For all intents and purposes, it's disappeared."

    Now Facebook has a new strategy to increase its reach - and its profits - but it's one that will likely raise some eyebrows.

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  • Facebook Stock Price: Is Mark Zuckerberg Losing Sleep Over This? Everyone's eyes are on the falling Facebook stock price, but CEO and founder Mark Zuckerberg remains silent on the issue.

    Facebook (Nasdaq: FB) stock is down about 17% from its $38 IPO price. But Zuckerberg has not commented publicly or issued a company statement, according to The Wall Street Journal.

    Silicon Valley rumors tell us that Facebook employees have been told to concentrate on work and not comment on the IPO fiasco.

    Meanwhile, Nasdaq criticism continues and lawsuits pile up as investors who are left with more FB shares than they wanted - worth less than they bargained - feel cheated.

    And Wall Street is left to bet on when or if FB stock will rebound.

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  • Zynga IPO Flop Proves Social Media Listings Are Still Suspect
    A strong debut by Zynga Inc. (Nasdaq: ZNGA) today (Friday) could have redeemed the tarnished reputation of social media companies. Instead, the online game-maker became the latest addition to salvage yard full of over-hyped social media companies that didn't live up to the promise of their initial listings.

    After debuting at $10 a share, Zynga stock tumbled 7.75% to $9.25 in just four short hours of trading.

    Money Morning Capital Waves Strategist Shah Gilani wasn't surprised.

    "I don't particularly like the position the company's in. It's got a lot of competition at its heels and I'm not sure about the valuation of the stock," he said on Fox Business' "Varney & Co." program this morning. "I think there's a lot of hype in the social media space."

    Indeed, Zynga's failure follows in the footsteps of Pandora Media Inc. (NYSE: P), LinkedIn Corp. (NYSE: LNKD), and Groupon Inc. (Nasdaq: GRPN).

    But that's not all.

    Here's what Zynga's initial public offering (IPO) means to investors going forward:

    • Zynga will set the tone for 2012: The tech IPO market this year has fizzled, and was in desperate need of a spark that Zynga didn't provide. This is an undesirable lead-in for Facebook Inc., which is expected to debut in the second quarter of 2012. It might also hurt Yelp! Inc., the business review site that filed for an IPO on Nov. 17.
    • It could influence future tech-IPO overpricing: Zynga drastically scaled back its initial pricing by more than 50% since July, when it was valued at $20 billion. Tech IPOs priced earlier in the year received a barrage of criticism for overpricing, but there's been much less of the same talk surrounding Zynga's range of $8.50 to $10. If it fails to close above $10 a share today, future tech IPOs may rethink their strategies.
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  • A Tech IPO Bellwether: What to Watch as Zynga Stock Starts Trading Social-gaming giant Zynga Inc. starts trading today (Friday), capping off a rocky year for tech initial public offerings (IPOs). A strong performance from Zynga stock today and into the New Year would shed the "bubble" reputation surrounding the sector in 2011.

    Here's what you need to know about this latest tech IPO:

    • Zynga will set the tone for 2012: The tech IPO market this year has fizzled, and could use a spark. Zynga could provide one. Scott Sweet of IPO Boutique told clients in an e-mail Wednesday morning there was more investor interest in Zynga than available shares. A strong debut for Zynga stock would be a good lead-in for Facebook Inc., which is expected to debut in the second quarter of 2012. It might also help Yelp! Inc., the business review site that filed for an IPO on Nov. 17. Finally, it might even subdue talk that tech is doomed for a second dot-com bubble.
    • It's Facebook-dependent: Zynga's growth is tied directly to Facebook. It generates a whopping 95% of its revenue through the social networking site, and that's not going to change anytime soon. While the relationship is an incredible revenue boost for Zynga, it's also a huge investor concern. If the business relationship soured, Zynga's revenue stream would dry up immediately.

      Still, this dependence could give Zynga stock a boost, in that investors eager to profit from Facebook's growth can do so with the social gamer.

      Zynga's contract with Facebook isn't up for review until 2015, giving Zynga three years to develop new revenue sources and decrease its Facebook dependence - if it proves detrimental. The company plans to push its product toward high-growth Asian markets.
    • It could mark the end of drastic tech-IPO overpricing: Zynga has drastically scaled back its initial pricing by more than 50% since July, when it was valued at $20 billion. Tech IPOs priced earlier in the year received a barrage of criticism for overpricing, but there's been much less of the same talk surrounding Zynga's adjusted range.

      BTIG analyst Richard Greenfield recommended participating in the IPO in the $8.50 to $10 range, and said even at the higher end he thinks it could yield up to a 50% return for investors within a year. Greenfield said the lower IPO price range favors investors and expects the company's revenue to grow by about 45% over the next two years.
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