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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.
Discussing the company's growth strategy in new areas including mobile and search, the Facebook founder addressed the issue of employee morale and squashed rumors of a Facebook phone.
"Building a smartphone would be "clearly the wrong strategy for us," Zuckerberg shared.
Known for feigning indifference to the daily market movements of Facebook shares – which mostly have been down – and the ominous opinions from Wall Street analysts, Zuckerberg was a bit more contrite this week.
Having lost billions of dollars (mostly paper profit) since Facebook's fiasco of an IPO, Zuckerberg acknowledged he was disappointed about the company's stock performance.
But he maintained that Wall Street has not yet fully appreciated the potential of Facebook's young mobile business. He wants Facebook's legacy to be connecting everyone in the world.
And while short on details, Zuckerberg shared that the company was "halfway through" a cycle to "retool" and offer new advertising products. Believing search could be a fresh area of growth for Facebook, the social networking chief noted the company has a competitive search project in works.
"Facebook is uniquely positioned to answer a lot of questions people have. We have a team working on search," he said.
Zuckerberg also let it be known that now is a good time to join the company's team. Admittedly the sinking share price has weighed on staff morale, but Zuckerberg maintained now is good time to join the company and "double down."
He told the masses at the conference, "People at Facebook are used to the press saying good and bad things. This isn't just Facebook. This is universal. It's not like this is the first up and down that we've ever had. I would rather be in the cycle where people underestimate us."
Facebook: Finally Moving Into Mobile?
Where Facebook has long been underrepresented is mobile, but that is changing. Users are spending more time on mobile platforms, so the company needs a revenue-producing strategy that acknowledges that shift.
Zuckerberg stressed that Facebook is morphing into a mobile company.
"Now we really are a mobile company. All the code we write is [for] mobile," said Zuckerberg, noting that even he accesses sites more through mobile devices.
But Facebook is still working out the kinks of its mobile ad plan. Mobile ads need to be more integrated than TV ads. Zuckerberg says Facebook's product teams are thinking about developing new features with advertising fundamentally integrated.
"I think we know that we're going to do well on that. The question is getting there," he said.
But Zuckerberg is running out of time.
Scores of investors and analysts, who are already souring on the stock, are not waiting around for Facebook to get where it needs to be.
Shares finished Tuesday at $19.43. Following Zuckerberg's talk, the stock tiptoed above $20 in after-hours trading. By 1 p.m. Wednesday Facebook stock was up more than 6% to $20.62.
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