Back in the day there was a certain buzz phrase that always rattled the street—lack of visibility. LoV was big boy “code” for “u think things su_k now…far as we can tell it’s gonna get a lot worse going forward, given we’re driving at 100 mph down an unfamiliar road in the middle of nowhere round midnight… with the lights off.” Translated to more proper language, “As a management team we are lost and see no way out of this morass in the foreseeable future. As investors, you are screwed.”
Well, fast forward to present day and it would seem the LoV syndrome is again in play…at least with a certain well-known social networking behemoth…
During Facebook’s recent (make that first) post earnings conference call, sandal-wearing wunderkind MZ punted on providing guidance to the street, basically citing a lack of visibility in terms of the company’s ability to monetize their strategy across their mobile platform over the short and longer term. Some day we will make a lot of money on it…just can’t tell ya when, as it were…..
Hey, lol…right? Worked early in the decade, so why not now?
Not sooo much! Apparently the FB LoV leaves the street with bad memories—a bad visual, if you will…
Thursday saw FB’s stock trading off more than 6 percent for the day—a day in which shares-trading- hands surpassed 156 million, equating to more than five times the average daily volume—to a new low of $19.82.
Breaking out the slide rule and the fingers and toes, seems to me that we’re talking bout a drop of nearly 56 percent since the first trade printed up at $45—not soooo long ago. Moreover, on the first day that locked-up shares became eligible to trade—make that 271 million, with another 1.3 billion more to follow …a boat load in anybody’s book—the stock traded to a new low.
Wow, that sounds rather… not good! Definitely not the way to go about garnering a “Like.”
Back to the point, you certainly don’t need to be a wunderkind to understand that a bunch of shares flooding the market over a relatively short period is gonna present some challenges. Frankly even a simpleton like me has clarity in that regard.
Since I’m being honest bout the fact I’m a simpleton, I might as well admit I don’t have much clarity regarding what the company is actually worth…let alone where it should be trading…with or without the coming flood of inside shares set to hit the market. I suspect that’s the case for more than a few of you out there as well.
Sounds like we would all benefit from deferring to the anal-ists to see what light they might be able to shed on the matter.
Hmmmmm….seems there’s no consensus among the ivory tower “in-the-knowers.” Appears there’s a big group out there whose response is simple and straightforward regarding the current state of FB shares—a collective “Duh.”
Meanwhile there’s a sizable group of analytical peeps who claim that what we’re dealing with is media hype that has gone wild and scared loyal (an apparent misnomer) investors into selling. 20ish seems to be a big mark in the sand in their view…for now. Not sure if that’s a reference to stock price or more of a demographic deal…such nuances are lost on me…..
Whatdoyouknow…seems we’ve got dueling anal-ists when it comes to what’s going on.
The net result is no real clarity. Worse yet, the whole “dueling” thing just don’t sit well. Frankly, “dueling” just sounds bad…sorta leads you back to dueling banjos…and from there a short, random walk to the squeamish visual of Ned Beatty crawlin round on the ground squealing like a pig for his toothless captors…Yeeeiiiikkkkeeessss!
To be sure, I digress…how do you go from FB to Deliverance?
Beats me… I guess it’s sorta like goin from Wunderkind and “can do no wrong” to a bit of a laughing stalk with a lack of visibility……standing in front of a tidal wave of shares being dumped by “Friends”…all in very short order. One very bad visual for shareholders, indeed!
Friend me? I’ll Like ya back…..
~ LH