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Facebook (FB) roundup: 1) The WSJ reports about 50 lawsuits have now been filed against...

Facebook (FB) roundup: 1) The WSJ reports about 50 lawsuits have now been filed against Facebook, Nasdaq OMX (NDAQ), and i-banks over a certain May event. Hundreds of arbitration claims could also arrive. 2) Facebook is partnering with cloud storage leader Dropbox to allow users to share Dropbox files with Facebook Groups. 3) Baird is cutting estimates due to slowing PC ad growth, but says checks indicate demand for mobile Sponsored Stories and Offers is picking up. 4) Early results for Facebook's ad exchange appear to be solid.
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Comments (4)
  • rephinbar
    , contributor
    Comments (228) | Send Message
     
    Seems to me like short-term (<12 months) is a definitively bear outlook for the stock. It would take that long to see and measure how effective all their new modernization initiatives are and if indeed they add significantly to their revenues.
    27 Sep 2012, 01:57 AM Reply Like
  • gwynfryn
    , contributor
    Comments (4354) | Send Message
     
    Hard to argue with your logic, but then the early buyers weren't too strong on that (did no one check the P/E, for instance?) and now they want to sue!

     

    Not sure how it works in the US, but I would expect a court to take the view that no one forced them to buy; we're supposed to be responsible adults, aren't we?

     

    I don't like the stock at all, at present (I may try a few puts...) and wouldn't take a long position until the price is below 5$, but given human nature, I'd be surprised if it EVER goes below 12$, so it may well be worth a flutter at that point...
    27 Sep 2012, 08:43 AM Reply Like
  • rephinbar
    , contributor
    Comments (228) | Send Message
     
    I think the main theme behind these law suits is that FB didn't disclose their adjusted and lower revenue estimates to the wide public before the IPO and only to a select few large investors. That's deceitful any way you look at it and legally may be found to be fraudulent: even responsible adults cannot make educated decisions if they don't have all the truthful information in hand.

     

    Like most business law suits in the U.S., I suspect the end of these will be FB writing some checks. If big enough this could further hurt the stock price but we won't see the end of this before a year is over. The interesting thing will be to see what "discoveries" are made as to the honesty of the FB management during the IPO.

     

    At any rate, seems to me like a good time to short the stock.
    27 Sep 2012, 06:00 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4354) | Send Message
     
    I see, but isn't that par for the course, like the way Wall street gets news a day before the rest of us? Like life, it's not meant to be fair; I haven't found a system yet that wasn't designed first and foremost to primarily benefit those who operate it!
    28 Sep 2012, 08:53 AM Reply Like
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