Nasdaq: FB

Is There Any Benefit to Facebook's New "Want" Button?

Facebook Inc. (Nasdaq: FB) rolled out a business-friendly interactive tool for its massive user base on Monday with the launch of a "want" button.

But, what Facebook will get from the "want" button is unclear.

Still in the testing mode, the new feature allows Facebook members to create "wish lists" of desired items ranging from home furnishings to clothing to books to a bevy of other retail products. It's kind of like a Christmas list or bridal registry.

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Facebook Stock Won't be Saved by this "Useless" Idea

Facebook Inc. (Nasdaq: FB) announced today (Thursday) it had finally amassed its one billionth member.

While the company celebrated the landmark number, many analysts simply shrugged it off. So did Facebook stock, which was down about 0.4% by 2 p.m.

As MarketWatch pointed out, "it's great to have one-seventh of the world's population in your network, but Facebook will have to translate that to the bottom line to sustain its upward momentum of late."

Or, as Money Morning wrote a few weeks back, "Congrats on one billion Facebook users... who buy nothing."

Facebook, in order to change that flaw, released a new plan this week to make money off its enormous subscriber base.

But here's why Zuckerberg and team should go back to the drawing board.

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Why Facebook Stock Has Much Farther to Fall

After Facebook Inc. (Nasdaq: FB) CEO Mark Zuckerberg addressed the public earlier this month to stem concerns over the stock's steep and steady fall, Facebook shares enjoyed a mild rally.

That was fun for investors while it lasted.

Facebook stock Monday renewed its descent, dropping 11% before stabilizing a bit to finish the day down 8.3% at $20.79.

Monday's intraday decline was the steepest since July 27. It was so sharp it tripped Nasdaq's circuit breakers meant to shield investors from short-seller manipulation.

Sparking this week's selloff was a fresh report from Barron's that said the company is overvalued. Renewed concerns over how quickly the social-networking behemoth can capitalize on revenue from the exploding number of users who access the site via mobile devices and tablets contributed to the drop.

Tuesday morning, the selling continued.

Before the recent selling spree, shares of the Menlo Park, CA-based company had given back some 45% since its hugely hyped initial public offering on May 18.

But that decline isn't enough.

Barron's gave Facebook a best-case scenario of $15 per share.

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While Facebook Struggles, These Rivals Steal Market Share

As Facebook (Nasdaq: FB) continues to struggle with growth and mobile strategies, its rivals keep moving forward in both areas.

GREE, Japan's $4.7 billion online media behemoth and rival to Facebook and its gaming counterpart Zynga Inc. (Nasdaq: ZNGA), moved further into Facebook's territory Monday with the purchase of social gaming company App Ant Studios.

GREE already enjoys a prominent position in social media. It's quickly gaining on other social networks, namely Facebook, since the bulk of its users already access the site via mobile devices - an arena in which Facebook lags.

With a strong focus on selling virtual goods, and with a variety of other superior services and mobile games, GREE is vying for sustained growth by expanding beyond its home turf -and is succeeding.

"GREE strives to build the world's leading global mobile gaming ecosystem. The acquisition of App Ant Studio will help GREE reach its goal of having 1 billion users worldwide as it expands its robust portfolio of games on GREE Platform," a company statement read. GREE gushes the new Platform will deliver exclusive social gaming experiences, in addition to offering developers access to a rising and engaged worldwide audience.

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Facebook CEO Interview Sparks Stock Rally, But it Won't Last

Facebook Inc. (Nasdaq: FB) CEO Mark Zuckerberg addressed the public and press yesterday (Tuesday) evening in his first interview since the social networking firm went public this spring, and he was a man on a mission.

Zuckerberg aimed to show shareholders, analysts, employees and members that Facebook has not lost its swagger.

Speaking at the TechCrunch conference in San Francisco, 28-year-old Zuckerberg, who has been harshly criticized for his lack of prowess as a CEO, appeared relaxed in his usual casual attire.

While Zuckerberg's speech sparked some excitement and lit a fuel under Facebook's floundering stock, sending shares up 3% in extended trading Tuesday and another 6% by 1 p.m. Wednesday, the rally will be short-lived.

"I certainly wouldn't buy this stock tomorrow," Simon Baker, founder of Baker Asset Management, told CNBC. "It's still an expensive stock-it trades at 30 times next year earnings. In fact, I'd sell the pop."

When Facebook debuted on the Nasdaq May 18, it became the first U.S. company to go public with a value of more than $100 billion. Since the epic IPO, it has lost more than half of its capitalization as investors agonize about waning growth, employee defection, lack of presence in the mobile arena, fading traffic and Zuckerberg's capability at the helm.

That's why CNBC's "Fast Money" regular and president of Metropolitan Capital Karen Finerman shared Baker's skepticism over Facebook stock.

Regarding Zuckerberg's comments about the Facebook mobile strategy, Finerman said, "Unless you think Zuckerberg can monetize mobile and no one else can-I would prefer to be in a stock that trades at a lower valuation."

Zuckerberg Shines Light on the Future of Facebook

In the half hour interview, Zuckerberg touched on all areas of concern.



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Facebook Stock Gains, But Rival Threatens Market Share

Look out, Facebook: LinkedIn Corp. (NYSE: LNKD) is inching into your territory.

As Facebook stock (Nasdaq: FB) keeps climbing from its all-time low last week of $17.55 a share, business-oriented networking site LinkedIn has introduced some new features that resemble those of Facebook.

LinkedIn last week rolled out a new notification system and launched an update for its iPhone, iPad and Android apps. The updates now inform a member when someone likes or comments on one of their status updates - just like Facebook, the social networking leader.

In the past LinkedIn only sent notifications if someone sent a member a message or extended an invitation to become a connection.

In a statement, the company gushed, "You'll never miss a comment or update to an engaging discussion about a news article or trending topic on LinkedIn."

LinkedIn's head of mobile products Joff Redfern said in an interview that the update will also let a member peruse company pages and job postings on smartphones and tablets. According to Redfern, users requested the feature so they could covertly browse for jobs while at work.

The latest moves highlight how LinkedIn is morphing from a headhunting and career-networking site into something bigger. Facebook big.

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If Only Zuckerberg Chose a Catchier Facebook Ticker Symbol

If only CEO Mark Zuckerberg had used a bit more imagination when cooking up the Facebook Inc. (Nasdaq: FB) ticker symbol, its stock might have fared a little better.

Sound crazy? Maybe, but several studies have shown that clever, pronounceable stock symbols - think Yum! Brands Inc. (NYSE: YUM) and Southwest Airlines (NYSE: LUV) - do better in the market.

The phenomenon is particularly true for IPOs, with the "fun name halo" extending about 10 days out from the stock's first day of trading.

Companies that choose a ticker symbol that doesn't form a pronounceable word - yes, like Facebook (Nasdaq: FB) -- often struggle. Generally speaking, the more jumbled the letters, the worse a stock does.

"[Our] research shows that people take mental shortcuts, even when it comes to their investments, when it would seem they would want to be most rational," Professor Daniel Oppenheimer, who co-authored a 2006 Princeton University study of the subject, told Psych Central.

While the academics who have studied this have not conclusively nailed down the cause, most suspect it has to do with something called "fluency," or how easily a person can process information.

People are simply drawn more to a catchy ticker symbol like YUM than a drab one like FB.

"It is possible that [people] are initially more attracted to fluently named stocks, that they pay particular attention to those stocks, or even that they favor those stocks because they have developed an association between easily processed names and success," Adam Alter, Oppenheimer's research partner, told The Wall Street Journal.

The Science Behind Clever Tickers

Naturally, not every stock with a clever ticker symbol outperforms and not every stock with a subpar ticker symbol underperforms. But the broad data show a surprisingly strong relationship between a ticker and how well the stock does.

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What Drove Facebook (Nasdaq: FB) Shares to a New Low

Since Facebook Inc.'s (Nasdaq: FB) debut as a public company at $38 a share on May 18, and the stock's peak at $45 on the same day, shares have tumbled nearly 50%.

Facebook stock hit a fresh low yesterday (Tuesday), with shares reaching $17.55 before closing at $17.73.

The slump came after a trio of brokerage firms slashed their price targets for Facebook shares. The firms cited the wave of expiring lockup periods that will flood the market with close to 1.7 billion shares over the next several months.

The first lockup period expired Aug. 16, freeing a first batch of some 268 million shares. In mid-October, 192 million more shares will be let loose, and on Nov. 14 a whopping 1.2 billion shares will be free to sell.

The total is more than four times the number of shares floating on exchanges before the lockup periods began expiring.

"It's like a train coming around the corner toward shareholders, so they better get out of the way," Francis Gaskin, president of research firm IPOdesktop told the Los Angeles Times right before the end of the first lockup.

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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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Why the End of the Facebook Lockup Period is a Big Deal (Nasdaq: FB)

On Thursday morning, the first lockup period of some 1.91 billion shares of Facebook (Nasdaq: FB) ends, releasing even more of the battered stock into a market with few interested buyers.

The end of the lockup period (used to reduce trading volatility immediately after an IPO) will kick off with up to 271 million shares flooding the market on the sell-side. More shares will become available over the next few months, compared with less than 500 million currently authorized for trading.

Investors who got in early and paid a mere pittance for the stock may race to cash in despite Facebook's steady decline since its legendary May 18 initial public offering at $38 a share. Since the fabled IPO, which morphed into a trading fiasco, shares have lost some 40% of their value.

The flood of shares ready to be unlocked is off-putting for some potential buyers.

"It's one of the No. 1 issues on investor's minds right now," Herman Leung of Susquehanna International Group told Bloomberg News. "Even the investors that I talk to who want to buy the stock and like the company are not sure if they can stomach the lockups."

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Sorry…Facebook (Nasdaq: FB) is Still Only Worth $7.50 a Share

The technorati took me to task. So did Wall Street.

They were agitated by an article I wrote in May explaining why the world's most hotly anticipated IPO, Facebook (Nasdaq:FB), was worth a mere $7.50 a share at best.

"Out of touch," one of the critics said. A "luddite" charged another.

"Doesn't grasp the significance of so many users," one Wall Street insider opined--who happened not coincidentally to work for one of Facebook's investment bankers.

Since then the social media darling has fallen another 31% to nearly $22 a share. Ten weeks later, Team Hoodie hasn't done much to merit an upgrade either.

Sorry guys...Facebook is still only worth $7.50 a share - likely less.

Here's why.

The Cold, Hard Facts for Facebook

At the time I reasoned that Facebook's valuation simply didn't merit the 100 times earnings IPO price of $38 a share based on comparable figures from Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL).

But there were a host of other factors as well.

I cited falling revenues, a lack of control over the mobile market channel, increasing distrust from customers who were voting with their feet and the concurrent departure of major advertisers like GM which will cost Facebook an estimated $10 million a year in revenue alone.

I also posited the assumption that Facebook would be unable to maintain the 100% plus growth that many investors believed was baked into the proverbial cake.

Google couldn't. Apple couldn't. And both of them are real businesses.

That's the key...real businesses.

Fact is, Facebook still hasn't figured out what it wants to be when it grows up.

Despite the fact that CEO Mark Zuckerberg does have some excellent advisors, the company isn't going to be able to hide the fact that its "business" is nothing more than a colossal time-wasting collection of personal interest items for much longer.

Other problems abound, too. All of them point to a lower share price.

[ppopup id="70925"]To continue reading please, click here...[/ppopup]

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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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You Might be Invested in Facebook Stock and Not Even Know it

Investors who boast that they were smart enough to avoid the hype of investing in Facebook (Nasdaq: FB) stock might want to check their mutual funds' holdings before relishing in their bravado.

According to data compiled by investment research firm Morningstar for The Wall Street Journal, some 160 U.S.-based mutual and exchange-traded funds bought shares of Facebook in May. And since only some fund companies choose to reveal their holdings on a monthly basis, the ones that chose to invest in Facebook will be disclosed over the next two months as fund companies file quarterly reports.

"Even if John Q. Public didn't buy [Facebook] directly, he may own one of the hundreds of mutual funds that did," Geoff Bobroff, a mutual fund consultant in East Greenwich, RI, told The Journal.

What is notable in many cases about the purchases, including those by lead underwriter Morgan Stanley (NYSE: MS), is that some of the funds that purchased shares wouldn't normally invest in a high-growth technology company like Facebook. And some wouldn't invest such a high percentage, like Morgan Stanley that had at least seven funds with over 5% of portfolio holdings in Facebook stock.

"That's a huge gamble," Michael Kalscheur, a financial planner with Castle Wealth Advisors LLC, told The Journal. "Are you really going to put an IPO as a top-five holding in a fund?"

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iTunes Revamp Will Fortify Apple (Nasdaq: AAPL) Ecosystem

A major revamp of its catch-all iTunes software will strengthen the already formidable Apple Inc. (Nasdaq: AAPL) ecosystem.

"People with direct knowledge of the matter" confirmed to Bloomberg News last week that Apple's biggest overhaul to iTunes since 2009 will appear before the end of the year.

According to the Bloomberg report, changes include the addition of music sharing features, better integration with Apple's iCloud remote storage service, and easier ways to discover new apps, music, and movies.

The upgrade is long overdue.

Launched as a mere music jukebox in 2001, iTunes has gradually added chores like media content management, an online store and syncing. As a result, it's evolved into a Frankenstein that fails to uphold Apple's legendary ease-of-use ideal.

"At some point, you've got to sit down and say, 'How do we create a really good, easy experience for consumers that doesn't involve them wading through endless tabs and subsections of the site," Carl Howe, research director at theYankee Group, told MacNewsWorld.

Although the iTunes Store generates a relatively small portion of Apple's overall revenue -$1.9 billion out a total of $39.2 billion in the March quarter - the software is a main ingredient of the glue that holds the Apple ecosystem together.

An iTunes revamp will tidy up the cluttered ecosystem that helps drive sales of iPhones, iPads and Macs - AAPL's real revenue generators.

With that in mind, it's also easy to see the iTunes overhaul as a defensive move.

It's surely no coincidence that the Bloomberg story appeared mere minutes after Google Inc. (Nasdaq: GOOG) announced an upgrade to the Android ecosystem. The Google Play store added movies, TV shows and magazine subscriptions - just like the iTunes Store.

What to Expect from an iTunes Revamp

While the details remain veiled in secrecy, the recent leaks offer several clues about what Apple has in mind for iTunes.

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Analysts Weigh in on Facebook Stock as Quiet Period Ends

Investors who want more analyst opinion on the Facebook stock price now have a lot more reading to do.

Today (Wednesday) marked the end of a 40-day quiet period for dozens of analysts who work for the 33 underwriters of the Facebook (Nasdaq: FB) initial public offering. That means these analysts now have released their first opinions and outlooks for shares of the social networking behemoth.

In an effort not to artificially inflate the stock price of a "hot" IPO, major Wall Street firms are prohibited for the first 40 days following a stock's debut from issuing analyst reports on stocks they underwrite. Smaller banks that are part of such an offering usually follow suit.

The universal opinion prior to Wednesday's Facebook releases was that the majority of analysts would "like" FB shares, and predict a 20% rally or more could be expected over the next 12-month period.

That was mainly the case among its lead underwriters, although some were bearish, bringing the average price target down. Price targets for analysts who provided them Wednesday ranged from $25 to $45, with the average $37.71.

But investors should consider the source before acting on the first analyst opinion they see. Some may be more interested in getting attention than guiding investors in the right direction.


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