Face Book the right script to fit into your portfolio? - Complete Report Posted by VK18 on 9:23 PM 5 comments

Face Book has found itself in a very difficult position in placing its script in the Wall Street following its failure at its initial public offering. Security analysts at the investment banks have never wavered in their enthusiasm right from the beginning.

Reason for the downgrade of FB IPO :
Major underwriters of Face Book like Morgan Stanley, J.P.Morgan and Goldman Sachs Group failed to figure out the price and remained with Buy recommendations even as in house mutual funds sold some of their Facebook holding initially. Massachusetts Secretary of Commonwealth William Galvin alleged that Morgan Stanley technology banker’s circumvented rules when they advised Facebook finance officials how to lower revenue estimates just before Facebook went public. MS didn't admit or deny the allegations.

“The system is being gamed by the financial- service industry “a strong message to avoid such sort of conduct says experts.

IPO (Considered overweight rating) :
Morgan Stanley- Price Target $38 , J.P. Morgan & Goldman Sachs- Price Target $42.
Continued with sale of its major holding by underwriters within few months of listing, created a panic and thereby finding a point at which the script found its price to float between 25 to 30$.
FB is a Healthy Investment says experts Research Analyst offering a higher number off “HOLD” rating for the companies share than “BUY”
A “Hold” rating probably suggests the company is fairly valued at current price and the investor should hang on to share if they already own. Analyst looks into uncertainty with Facebook revenue-generation business model and the tough market condition may be the contributing factor behind such call.
Still the major player like J.P. Morgan and Goldman Sacs are bullish with Facebook share price target expecting the range between $42- $45 over 18 months.

"We believe Facebook's virtual ownership of the social graph, strong competitive moat, and unwavering focus on the user experience position the company to significantly improve monetization over time and to become an enduring, blue-chip company built for the long term," J.P. Morgan's Doug Anmuth.

Facebook, Inc (FB)
Closing at $30.73 at Nasdaq as on Jan 22, 2013.
Recommendation Trends
Strong Buy 30%, Buy 40% and Hold 30% as per current month is concern by analyst around the world.

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Revenue Rose 40% as Facebook Strengthen on Mobile Advertisement Sales. Posted by VK18 on 1:58 AM 2 comments

Squeezing is the right word used by Facebook to post an 40% growth in Fourth- quarter revenue to climb up to reach $1.59 billion and it is considered to be strongest quarterly advertising Sale so far.
Profit fell by 79%, weighed down by spending on new initiatives and charges related to employee stock.
Mobile users brought in more money due to the use of smart phones. Advertising on the mobile newsfeed accounted for 23 per cent of its advertising revenue, which is double the forecast and last quarter result.
"The quarter was a little like a cold shower after you've been out all night - it's something that makes you sober up very quickly,"

Cost spent on Research and development has finally set an negative impact on the wall street after showing a growth on quarter to quarter results in revenue.

Facebook Shares
Closed at $31.24 on Wednesday fell more than 3 Percent, the stock plummeted as Wall Street soured on its ability to increase profit as fast as investors wanted.

Facebook Users
Company reported 1.06 billion active users for the month.

Figure to Watch out
4th Quarter
                               Actual  Predicted  Impact
Revenue                  $1.59   $1.52        +ve
Revenue %              40%    34%          +ve
Mobile Ad Rev %    23%    14%          +ve
Cent a Share            17       15             +ve

Negative impact (-ve)
Net Income for the quarter was $64 million or 3 cents a share, compared to $302 million or 14 cents a share a year earlier
which paved way for speculation and thereby closed with a drop in share price as the company is preparing itself for future, than looking into huge margin for the following quarters.

Zuckerberg said that recently introduced products such as Gifts, which allows Facebook users to purchase retail goods for their friends, as well as its new social search tool could become important businesses in the future. But in the near term he said that Facebook's advertising efforts will be the core of its business.

Facebook Plans
Expenses on employees expected to jump 50% in 2013.
Capital investment may climb to $1.8 billion, up 14% from last year $1.58
Intend to Spend more on Opportunities in hiring skilled people and build products for future.
Facebook has taken forward after all the hard work they have done to build in "Graph Search" an unique product to stay connected.

Jstxplore suggest Facebook to come up with something more than graph search, either by creating a tool which can support the users in staying connected with people with mutual interest in one subject matter.

Final words :
Even though the company showed a remarkable growth in quart on quart sale,  it still fetch a less interest among the investors due to its excess spending on research and development.
Experts still feel the company are adopting with the market competition and will perform better in long run as they spend more on capital expenditure "the market would be less happy if they were not finding enough opportunities."
Investor should always look into FB. inc. which is expected to come up with more innovative products and services.

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