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I've Made a Bundle on Facebook, So Why Am I Unhappy?

NEW YORK ( TheStreet) -- I have a problem that many investors wish they had.

I'm having a hard time deciding whether to exit my position in social media giant Facebook (FB - Get Report) after making a 22% profit on the stock.

Facebook shares have now exceeded my target of $30 after having closed Monday at $31.41.

After having bought close to the bottom at $25.72, I am now questioning where the near-term top might be.

The chart below shows how resilient the stock has been ever since its "larger than life" unveiling failed to live up to the hype.

Since then, many investors have been clamoring for a revenge that is simply not coming at this point.

That's because for every investor who arrived too early to the party, there's one like me who arrived right on time and may be hesitant to sell.

The reason for my own hesitation is simple: I still see the stock reaching its equilibrium -- its IPO opening price of $38.

On the other hand, another 20% gain is a tall task, particularly after the stock has already gained 23% over the past week.

Plus, being greedy has never been my M.O., so I don't mind leaving a few dollars on the table in order to preserve my gains.

Unfortunately for me, the stock does not yet possess sufficient trading history to the extent that it can offer investors an adequate gauge of exit opportunity. At the moment, what I am left with is just a "gut feeling."

Laugh all you want. Although my gut feelings aren't based on scientific evidence, they helped me call the bottom at $25 long before the Wall Street experts hopped on board.

However, I would say the biggest obstacle to me selling my shares was the news that Apple (AAPL) has recently adopted Facebook for its new mobile OS. In other words, Facebook is only now starting to gain some traction.

Also, according to Mark Harding of JMP Securities, the next target for the stock will be $37 -- $1 than its IPO price.

He initiated his coverage with a market outperform rating, saying the "valuation appears high, but Facebook has plenty of opportunities to monetize its vast user base."

While I appreciated that coverage, it was not entirely going out on a limb nor was it a revelation of any kind.

After all the company's original inflated IPO valuation was heavily predicated on that assumption. I agree with him nonetheless.

Bottom Line

In looking at Facebook's trading pattern since its hype waned, it is remarkable how closely its chart has resembled the likes of previous sensationalized IPOs such as Pandora (P), LinkedIn (LNKD) and Groupon (GRPN).

What I have found were pretty consistent patterns that suggested that Facebook would be just fine in the long term. However, the near term is what I'm most concerned about. A 22% gain in less than 10 days on a so-called "over-rated stock" is nothing to take lightly. Thus, I'm going to take my money and run.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, the author was long AAPL and had recently exited his Facebook position as the stock had exceeded $31.

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