I'm not really into neither individual stocks nor saying anything that would even remotely seem like investment advice.
But after contemplating Facebook for a bit, I am compelled to just post this. If nothing else than for the timestamp.
So don't invest based on this. In fact you don't even have to read it.
So here goes:
1. Facebook has cracked the mobile code. Ever since its IPO, Facebook watchers have been talking about the incredible potential in mobile. Since a majority of users now access the site via their phones, mobile has become the entire story. Therefore it's pretty surprising that no one has noticed how amazingly Facebook has cracked the mobile problem. In the past the company amassed a surprisingly large amount of money from the sidebar ads, but now we're in a whole new ballpark. In fact it's not even in the same game.
To backtrack a bit. Google is known for it's amazing algorithm. That's what the company is at its core. It's all about the automatian via machine. This has created a fairly amazing ad network, but to be honest I never evne notice the ads and I cannot remember to have ever clicked on.
On Facebook the story is different. Facebook is all about people and interrelationships. People have been expecting Facebook to reach a Google-like ad relevance algorithm, but they are clearly not focused on that. While Google is playing checkers, Facebook is playing chess. Because the algorithm on Facebook is the people combined with a much simple algorithm. This has created situations on almost a daily basis where I find myself reading and re-reading an ad, sometimes even clicking on it, before realising it's an ad. And amazingly, that doesn't even feel like I got cheated. Cause it was so amazingly relevant.
Case in point: Last week I found myself on Facebook and I see a picture of a machine and the link to a site selling Sous vide machines. Sous vide is a concept I've been subconsciously wanting to try out, but have never even researched. I knew kinda what it was, but I never gave any signal to Google or others could fish out to send an ad my way. But Facebook knew. Somehow. Either by accident or due it being trendy or something. But they knew. The people are the machine.
And you know what. I'm gonna buy a Sous vide machine. Probably from that exact site.
And the best part with this whole ad-story. No analyst seem to have fully grasped this yet. So if Facebook was worth $20-25 in May (that's sort of the consensus now), you could easily double or triple that value if you add mobile into it.
2. A few weeks back 804 million Facebook shares, owned by Facebook staff mostly, were available for sale for the first time. Everyone, including me, was expecting a collapse. The stock rallied 10%+ that day.
Long story short: insiders are not selling. No comment needed.
3. It's trending. The stock is up almost every day. It's up on good days (today). It's up on bad days. This looks like a trend. The start of a trend.
4. Everyone still hates Facebook. But hate fades fast when people start making real money. And when Facebook proves it makes money, either via a profit warning soon or at Q4, the users will come running to buy stock. Then Jim Cramer can start his yelling and backtrading and the demand for Facebook stock will skyrocket. Heck, we might even see the CNBC crew in hoodies again.
5. I'm getting word that the mood in the Valley is lifting. Just look what VC Howard Lindzon wrote on Twitter: