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Facebook (FB) Dips Below $30; How Low Can it Go?

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Facebook (FB) Dips Below $30; How Low Can it Go? Powered By Docstoc
					Robert DeFrancesco’s
TechStockProspector.com
May 29, 2012


Facebook (FB) Dips Below $30; How Low Can it Go?
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Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for
iPad/iPhone reading app.

See the May 2012 Table of Contents and order the issue here:
http://www.amzn.com/B004T6Z0ME

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Facebook (FB, $29.35) shares have dipped below the $30 level, hitting a post-IPO
low of $29.23. The stock is now off 22.7% from its IPO price of $38.

With the market cap down to $80.1 billion, Facebook trades at 16.1 times the 2012
consensus revenue estimate of $4.96 billion. On the 2013 consensus estimate of
$6.45 billion, the price-to-sales (P/S) ratio is 12.4.

How low can Facebook shares go? A pullback to 10x estimated forward revenue
would mean the stock trades down to around $18.25. That seems unlikely. But this
stock is proving anything is possible.

At 13x forward revenue, Facebook shares would be around $23.70. At a forward P/S
ratio of 15x, there’s downside risk to $27.30.

Today’s 7%+ drop in Facebook shares can be blamed on a report that the company
is considering getting into the handset business (that would be a tough gig) and
speculation that Zuck & Co. could spend $1 billion+ on Opera Software, which makes
mobile browsers.

For updates during the trading day, follow Rob on Twitter: @TechStockRadar

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The May 2012 issue of Tech-Stock Prospector is available at
TechStockProspector.com (subscription required), in the Amazon Kindle store (this
includes the Kindle for iPad/iPhone reading app) and on the Barnes & Noble NOOK
Newsstand.
Here are some of the topics covered in the May 2012 issue:

*The next growth phase for Apple
*Cloud-software earnings shine
*NetSuite gains enterprise traction
*Ultimate Software partners with Yammer
*Accelerating growth at Concur Technologies
*A top growth play in networking security
*Ariba arrives again
*Competition heats up between Qlik & Tibco
*Zynga proves tough to value
*F5 Networks builds momentum in wireless
*4 positive catalysts for Intel
*Acme Packet hopes for a second-half recovery
*Fusion-IO speeds up the datacenter
*There’s value in the desktop at Citrix Systems
*Splunk knows its way around machine data
*TSP Deal Report: Constant Contact

To place an order, call TSP Customer Support at 800-392-0998 or visit
TechStockProspector.com

------------------------------------------------------------------------------------------------------
Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for
iPad/iPhone reading app.

Here’s the Kindle link: http://www.amzn.com/B004T6Z0ME

------------------------------------------------------------------------------------------------------

Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street.

TechStockProspector.com, launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
sectors. Annual subscription: $350.

For more information or to place an order, call 800-392-0998.

				
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posted:5/29/2012
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Description: Facebook shares off 22.7% from IPO price