Anyone who follows Stocks on Wall Street knows that since the IPO we been a bear about Facebook and it’s long-term outlook advising investors to stay away. Now we’re not alone as in Barron’s controversial recent Cover Story they downgraded Facebook (NASDAQ: FB) significantly saying the company is worth $15 per share meaning that they project the stock to fall another $6.79 or a 43%. This cover story alone hit Facebook hard as investors have become cold feet in the stock once again as shares fell 9% today much can be attributed to the negative attention brought to the company by this cover story.
Our disdain for Facebook’s valuation is no longer an outlier perspective. When the cover of Barron’s values Facebook at $15 per share it means that there are significant troubles with the company’s current business/revenue model along with poor long-term outlook. This has been one of the most controversial stocks of 2012 as investors are often split on declaring what is the bottom for Facebook with optimistic investors thinking that shares are cheap right now and in the long-term will pay off. Clearly Barron’s doesn’t believe we have come near the bottom hence the cover story they published today. Expect shares to continue to decline as investors lose confidence in the stock. We would recommend you stay far away from Facebook as it’s a risky play and we side with Barron’s in the fact that we think shares still have a far ways to fall.
To read Barron’s article click on the link: Facebook is Worth $15
Above is an interesting table courtesy of Barry Riholtz and the Washington Post along with two great articles: Facebook’s IPO: What it Means to You and Less Than Meets the Eye at Facebook. Plus below are Stocks on Wall Street’s past articles on Facebook: