A recent column at SeekingAlpha.com asked the question of whether it is time to sell Facebook and Buy LinkedIn. It inspired me to reflect more on the first part of the question more than the latter because of the recent pull-back in Facebook shares apparently emboldening short-sellers .
for the first part of the question, I have no issue with LinkedIn
(LNKD) but I seriously doubt it is time to sell FB and buy LinkedIn. I
have accounts at both. I am connected to Facebook every day, throughout
the day as are hundreds of millions of their billion+ users.
rarely go into LinkedIn because the protocol of what is appropriate is
so narrow. I like -having- a LNKD account but only go into it maybe
once or twice a month. If I was unemployed maybe I would step it up
there but that would only be a temporary situation.
It reminds me
of a local Chamber of Commerce meeting where most of the people there
are there to do some "card jamming". You will have a bunch of sales
people like insurance agents all trying to sell to each other. Nothing
wrong with that except it gets boring quickly for the average person not
looking to sell something to someone. The CONTENT is what makes FB so
superior to others and that isn't going to change anytime soon.
FB shorts are going to be in a world of pompous agony just like during
last earnings call. You can see them circulating the same tripe filled,
wishful thinking talking points as they did then. They have happy
ears. They look for some BS to which they can jointly cling and then
tweet the living hell out of their insipid fallacies.
fool a few people in the short-term but they will die by the sword
because they have little perspicacity when it comes to understanding
business or the nature of "bubbles" ( a word they parrot ad nauseam and
erroneously equate it to 1999, a time they apparently spent in middle
school while YHOO had a $200+ BILLION market cap before they had a
business plan). Well they just have not yet reconciled themselves with
the fact that Facebook produces more revenue and eps in a single
quarter then YHOO achieved in years.
2 lessons of 1999
1. When the media pundits are crying bubble in every article every day for a year, rest assured, you are not yet in a bubble.
REAL success stories still arise during and immediately after a
bubble. Google steadily executed and justified its market cap by
delivering revenue and earnings. Facebook is on the same path as it
executes and reveals the ignorant and underhanded in the market. The
short sellers circulate rhetoric about "mo mo" like a flock of sheep.
They are the "mo mo" traders. They circulate hype in the direction that
is expedient for their short positions but the hype they circulate is
disingenuous. They talk in terms of "support and resistance" or the
number of Puts or Calls purchased as though that were a sound basis for a
legitimate investor to engage in ownership of a company at a particular
price - or not.
What they do is not investing. It is not
savvy. It makes them sound as though they have investment acumen to
those with rudimentary understanding of investing. However, they are no
different than those clowns who purport to be sages of sports betting.
Statistically, when you have tens of thousands of people in a
room selling their magical system, a group will ALWAYS have a run of
luck but in reality they are no better at it than anyone else.
assured there is nobody on that Forbes 400 list that got there by
trading momentum long or short or by magical charts. Most of the people
there own great companies and are more often insiders because insiders
do not make impetuous mistakes by taking profits way too soon because
they do not allow the bottom feeders to scare them out with constant
underhanded scare tactics and baseless criticism. Most people who have
invested early in the MSFTs, AAPLs, GOOGs & FBs usually do not make
the fortunes that the less emotional minority make because most of the
herd sell too early as they fall for the misconception that a 100%
return is an obligatory sell signal.
The interesting thing
about the Facebook rise that is so different from the unjust rise in1999
bubble stocks is that the rise in FB's share price from lows after the
IPO has been the most reluctant rise I've ever seen in a company's
I was short all of the right tech stocks in 1999 as I
can document with time-stamped proof. I remember the climate well as I
then described it on my radio show. Virtually NOBODY wanted to talk
bubble. It was "new paradigm..." and the praise by analysts and
constant celebratory press releases from those companies came at a
constant daily torrent. FB has not been met with the fanfare.
climate around FB since the week the IPO was launched has been a chorus
of negativity ever since. Look at Wall Street Journal columns, the
daily barrage of coordinated Tweets and listen to financial broadcasts.
Any honest person of discernment will see that with regard to Facebook,
negativity and polemical of Mark Zuckerberg overwhelm the total body of
work out there.
Facebook skepticism is always given deference in the media.
is simply the most reticent and reluctant growth company of its
caliber. They talk about direction but they do NOT hype. They simply
execute. I will take a pass on the "altruistic" inanity of the mo-mo short sellers and stay the course.