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Home / Business / Facebook's 20% Stock Implosion Signals Through Insider Selling, But Is It A Buy Now?

Facebook's 20% Stock Implosion Signals Through Insider Selling, But Is It A Buy Now?




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A smartphone shows the declining market value of Facebook on the Nasdaq Stock Exchange on July 27, 2018 after the earnings release via the Yahoo Finance App (photo: Guillaume Payen / SOPA Images / LightRocket on Getty Images.

Did the Fizz come from Facebook? Well, stock in the social media giant took a bang in after-hours trading this Wednesday after a sales miss and a profit call The stock price fell 24% as the company noted that sales continued to fall and costs increased.

Facebook's stock market rebounded somewhat as it became the largest ever in the history of the US stock market As day went by, it still declined 1

9% to around $ 120 billion, adding nearly $ 16 billion to the personal wealth of Mark Zuckerberg, co-founder and CEO of the social networking site, which slowed growth Some analysts described this as a "bomb shell" moment and the earnings reports caused instant sell-offs on Wall Street.

While the company headquartered on 1 Hacker Way in Menlo Park, California recorded a zero user growth in North America, the company lost around one million users in Europe.

The loss of the Facebook stock on this day was massive. It was the equivalent of Snap's seven-fold market valuation ($ 17 billion) owned by Snapchat and four times Twitter ($ 33 ​​billion). In other words, it corresponds to Kuwait's gross domestic product – it was $ 120.3 billion last year, which seems incredible. But stocks have still risen by about 350% since they were on the market six years ago.

"I think we were all surprised at the extent of the move, but investors really should have seen something similar, as Facebook's insiders have sold heavily over the last few months," said Neil Wilson, Markets Chief Market Analyst. com in London in the course of the profit publication.

In fact, in the past three months, insiders alone – including Mark Zuckerberg – have sold $ 3.8 billion worth of shares

Earnings per share (EPS) were $ 1.74 against $ 1.72 as predicted, even something above the forecasts. And the revenue was at $ 13.23 billion, only slightly higher than the expected $ 13.36 billion. The quarterly figures were not so bad, but the projected decline in sales was a source of concern to investors.

The social media colossus showed in its recent results that the number of active users increased monthly to 2.23 billion (11%) on all platforms. However, this figure was less than Thomson Reuters consensus estimate of 2.25 billion analysts.

Executives showed a rather bleak picture of revenue growth in the second half and through to 2019. On the phone David Wehner, Facebook's Chief Financial Officer, said overall revenue growth rates "will slow further in the second half of 2018, and we expect our revenue growth rates in both the third and fourth quarters to decline in the high single-digit range compared to the previous quarter. " Seen from the beginning, these values ​​will increase by 50% -60% compared to the previous year.

Wilson of Markets.com reflects: "We should always focus on the impact of trading after trading, but that looks different, not least because the volumes were very large, as well as the magnitude of the move." And it raises questions.

He added, "Once again, the question of the Facebook advertising model after the revelations this year comes in. The big fear is twofold, namely that the advertising model for Cambridge Analytica has been broken (you can not expect that Management is neglected) and users are starting to turn their backs on the platform. "

Nonetheless, stocks failed to test the lows of the year. The sharp decline is partly due to the very rapid increase in stocks since the end of March. However, several analysts, including JPMorgan and UBS, downgraded the stock after the earnings release.

Among the notable points of this recent horror course is that Facebook was higher than the Cambridge Analytica data debacle had impacted the stock price this year. Adding to this is the uptrend and downtrend since the low point in the Cambridge Analytica saga, where Facebook's market capitalization rose by a whopping $ 187 billion over a four-month period.

Having recovered from the overnight trading trough The London-based Scottish analyst spent around 20% less than the previous day's close and said we had "yet another recovery" in the stock until the trading day after the Profit publication can experience.

Wilson postulated, "This could be one of the big buying opportunities for anyone who thought they missed on Facebook."

Reading for tech stocks was tough. Apple, Alphabet, Amazon and Netflix were all lower after the Facebook slump. And despite the overall improvement in risk appetite, as trade risk risks eased somewhat, a potential recovery may not occur immediately.

In fact, when the stock in New York on Friday at 16.00 at 174.89 – a rebounded decline of $ 1.37 (-0.78%) a day. On Wednesday, July 25, they had traded a few dollars over $ 218 a day.

Another thing to notice about the speed and extent of this decline is how exactly the market was pricing the stock before all that. Should markets not function efficiently and take into account relevant information? And if the pricing was wrong before, is it right? So much for the efficient capital market.

And this Friday, Twitter has made some of Facebook, with its shares losing 18% in pre-market trading before losses in a brutal sell-off that reflected the Facebook crash earlier this week. This prompted Wilson to ask, "Have we reached a social media tipping point?"

Twitter's second-quarter revenue still increased 24% to $ 711 million, with an increasingly strong contribution outside North America. International sales growth was 44% compared to 10% in Germany. Expenditures increased 3% to $ 631 million, or 13% on a non-GAAP basis, to $ 547 million.

"After the Facebook meltdown, the first thoughts are that there may be two things compared to the stock price." Wilson said. "First, social media revenue growth expectations are being fundamentally reduced, and secondly, the response may be overstated as investors were shaken by Facebook's dreadful earnings appeal."

Both Facebook and Twitter have been corrupted by fake news Accounts and allegations of Russian interference badly affected. But according to Wilson, "Twitter looks better as the efforts to monetize the platform work, while we see fundamental concerns about Facebook's advertising model."

And why should their distance influence the stock price? is unclear. "Investors should pay more attention to controlling revenue and revenue growth instead," he argued.

As the Facebook stock is currently trading at around 30 term accounts and these gains are expected to increase by 25% in the future, this is not exactly a basket. Compared to other "FANG" stocks, when Apple released its quarterly earnings last November, the price-earnings ratio (P / E ratio) was around 19 times (12 months after TTM). This compared to the time with FANG colleagues Alphabet at c.35x, Facebook at c.39x, Netflix at c.200x and Amazon at c.274x

On the stock picks front, in the Facebook earnings release on Wednesday, the big one Majority – 44 out of 52 analysts who tracked the stock rated them as "buy", only two had a "sell" recommendation.

Among these analysts, the average 12-month price target (PT) was $ 229.53 before news of the distribution of earnings was released. Post the gains the PT has corrected down to $ 209.50.

At this level, it is still well above the closing price of this Friday and nearly 20%, or $ 34.61. This may well be a golden buying opportunity, despite the wake-up call for the market and the slowdown in Facebook growth.

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A smartphone indicates the declining market value of Facebook on the Nasdaq Stock Exchange on July 27, 2018. Following its earnings release, via the Yahoo Finance App. (Photo by Guillaume Payen / SOPA Images / LightRocket About Getty Images).

Did Fizz Expire From Facebook Well, Stocks in the Social Media Giant Picked Up After a Loss of Sales and a Profit Distribution That Sweated Investors Trading This Wednesday, and the stock plunged 24% as the company noted that revenue would continue to slow and costs would rise.

The stock market value of Facebook has been steadily falling in the history of the US stock market, but the market value has fallen recovered slightly, but still declined 19% to around $ 120 billion, boosting growth for Mark Zuckerberg, co-founder and CEO of the So Network website, which fueled nearly $ 16 billion to stop. Some analysts described it as a "bomb hit" moment, and the earnings reports caused instant sell-offs on Wall Street.

While the company, which is headquartered on 1 Hacker Way in Menlo Park, California, recorded zero user growth in North America, the company lost around one million users in Europe.

The loss of the Facebook stock on the day was massive. It was the equivalent of Snap's seven-fold market valuation ($ 17 billion) owned by Snapchat and four times Twitter ($ 33 ​​billion). In other words, it corresponds to Kuwait's gross domestic product – it was $ 120.3 billion last year, which seems incredible. But stocks have still risen by about 350% since they were on the market six years ago.

"I think we were all surprised by the extent of the move, but investors really should have seen something similar, as insiders on Facebook have been selling heavily in recent months," noted Neil Wilson, Markets Chief Market Analyst. com in London in the course of the profit publication.

Indeed, in the past three months, insiders alone – including Mark Zuckerberg – have sold $ 3.8 billion worth of shares

Earnings per share (EPS) were $ 1.74 against $ 1.72 as predicted, even something above the forecasts. And the revenue was at $ 13.23 billion, only slightly higher than the expected $ 13.36 billion. The quarterly figures were not so bad, but the projected decline in sales was a source of concern to investors.

The social media colossus showed in its recent results that the number of active users increased monthly to 2.23 billion (11%) on all platforms. However, this figure was less than Thomson Reuters consensus estimate of 2.25 billion analysts.

Executives showed a rather bleak picture of revenue growth in the second half and through to 2019. On the phone David Wehner, Facebook's Chief Financial Officer, said overall revenue growth rates "will slow further in the second half of 2018, and we expect our revenue growth rates in both the third and fourth quarters to decline in the high single-digit range compared to the previous quarter. " Seen from the beginning, these values ​​will increase by 50% -60% compared to the previous year.

Wilson of Markets.com reflects: "We should always focus on the impact of trading after trading, but that looks different, not least because the volumes were very large, as well as the magnitude of the move." And it raises questions.

He added, "Once again, the question of the Facebook advertising model after the revelations this year comes in. The big fear is twofold, namely that the advertising model for Cambridge Analytica has been broken (you can not expect that Management is neglected) and users are starting to turn their backs on the platform. "

Nonetheless, stocks failed to test the lows of the year. The sharp decline is partly due to the very rapid increase in stocks since the end of March. However, several analysts, including JPMorgan and UBS, downgraded the stock after the earnings release.

Among the notable points of this recent horror course is that Facebook was higher than the Cambridge Analytica data debacle had impacted the stock price this year. Adding to this is the uptrend and downtrend since the low point in the Cambridge Analytica saga, where Facebook's market capitalization rose by a whopping $ 187 billion over a four-month period.

Having recovered from the overnight trading trough The London-based Scottish analyst spent around 20% less than the previous day's close and said we had "yet another recovery" in the stock until the trading day after the Profit publication can experience.

Wilson postulated, "This could be one of the big buying opportunities for anyone who thought they missed on Facebook."

Reading for tech stocks was tough. Apple, Alphabet, Amazon and Netflix were all lower after the Facebook slump. And despite the overall improvement in risk appetite, as trade risk risks eased somewhat, a potential recovery may not occur immediately.

In fact, when the stock in New York on Friday at 16.00 at 174.89 – a rebounded decline of $ 1.37 (-0.78%) a day. On Wednesday, July 25, they had traded a few dollars over $ 218 a day.

Another thing to notice about the speed and extent of this decline is how exactly the market was pricing the stock before all that. Should markets not function efficiently and take into account relevant information? And if the pricing was wrong before, is it right? So much for the efficient capital market.

And this Friday, Twitter has made some of Facebook, with its shares losing 18% in pre-market trading before losses in a brutal sell-off that reflected the Facebook crash earlier this week. This prompted Wilson to ask, "Have we reached a social media tipping point?"

Twitter's second-quarter revenue still increased 24% to $ 711 million, with an increasingly strong contribution outside North America. International sales growth was 44% compared to 10% in Germany. Expenditures increased 3% to $ 631 million, or 13% on a non-GAAP basis, to $ 547 million.

"After the Facebook meltdown, the first thoughts are that there may be two things compared to the stock price." Wilson said. "First, social media revenue growth expectations are being fundamentally reduced, and secondly, the response may be overstated as investors were shaken by Facebook's dreadful earnings appeal."

Both Facebook and Twitter have been corrupted by fake news Accounts and allegations of Russian interference badly affected. But according to Wilson, "Twitter looks better as the efforts to monetize the platform work, while we see fundamental concerns about Facebook's advertising model."

And why should their distance influence the stock price? is unclear. "Investors should pay more attention to controlling revenue and revenue growth instead," he argued.

As the Facebook stock is currently trading at around 30 term accounts and these gains are expected to increase by 25% in the future, this is not exactly a basket. Compared to other "FANG" stocks, when Apple released its quarterly earnings last November, the price-earnings ratio (P / E ratio) was around 19 times (12 months after TTM). This compared to the time with FANG colleagues Alphabet at c.35x, Facebook at c.39x, Netflix at c.200x and Amazon at c.274x

On the stock picks front, in the Facebook earnings release on Wednesday, the big one Majority – 44 out of 52 analysts who tracked the stock rated them as "buy", only two had a "sell" recommendation.

Among these analysts, the average 12-month price target (PT) was $ 229.53 before news of the distribution of earnings was released. Post the gains the PT has corrected down to $ 209.50.

At this level, it is still well above the closing price of this Friday and nearly 20%, or $ 34.61. This could well be a golden buying opportunity, despite the market's wake up call and slowing Facebook growth.


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