Monday 25 March 2013

FB - remains...overvalued junk

Facebook (FB) closed -2.3% @ $25.13, and this continues a rather significant decline from the recent high in the $32s in January. Near term trend looks particularly weak, with the next soft level of support around $24. The big $20 level looks very viable in late April/early May


FB, daily


Summary

Suffice to say, I remain no fan of the FB. It remains shrouded in media hysteria and trades in a market that continues to completely mis-price it.

If the market does see some degree of multi-week down cycle across April/May, then my primary target would be the 20/18 support zone.
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Clearly, FB is not going out of business any time soon, it does a have huge user/client base, but the advertising revenue business model is entirely unreliable..and lets be clear...

FB is a website...and sooner or later..someone - whether European, American, or Asian, is going to come up with a superior version of an online social network..and FB will then likely be toast...

...just like Geocities, and Myspace.