Facebook for Dummies: Wait for $25
NEW YORK (TheStreet) -- You never get a second chance to make a first impression. If that first impression left little to be desired, why would anyone in their right mind care to revisit it anyway? It doesn't really make sense. Instead, the focus should be on fixing the mistakes, not fixing the broken pride.
No stock on Wall Street has taken a bigger hit to its pride than that of social media giant Facebook (FB) and the pathetic first impression that it has made as a public issue. The question for investors continues to be, when will this horrific nightmare end?
It is one thing for investors to have lost money on the stock, but it's another to be kicked while you're down and be reminded daily, by people like me, that you have lost money. But the excuses continue.
Investors are now quick to introduce logic into the equation, suggesting that the stock's precipitous decline doesn't make sense. In fact, it makes perfect sense -- perhaps what we are now witnessing is the only thing that has made any sense at all throughout this entire episode. Because it not only teaches Wall Street an important lesson in humility, but it also reminds investors that there is nothing that is so-called "bigger than life."
The idea that "logic" should somehow matter at this point is funny (if not) ridiculous. The cynic in me wonders why focus on logic now to solve a valuation problem that was not based on logic to begin with? However, the good news for investors is that, though the stock continues to drop, it is not going to zero. They should find some comfort in that. In fact, with its Wednesday close of $28.19, it had only 11.31% lower to go before it triggered my buy signal at $25. Today, it's even lower, near 27! At $25, I plan to go all in and new investors should consider doing the same. Not only is $25 where it should have opened its IPO to begin with, but from a technical perspective, this is where it will most certainly see a significant amount of support by virtue of its forward P/E.Select the service that is right for you!
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