This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Facebook Critics Just Don't Get It

Stocks in this article: FB

NEW YORK (TheStreet) -- Facebook (FB - Get Report) still seems misunderstood. When CEO Mark Zuckerberg is not receiving criticism for being "too young" and "inexperienced," he's getting it for wearing hoodies.

But it's a little surprising that Zuckerberg's decision to exercise stock options worth an estimated $3.3 billion is generating grumbling. They're called "options." And they were his to exercise.

True, he reportedly exhausted his supply of options after exercising 60 million of them in 2013.

But that doesn't mean he lacks a significant stake in the company or motivation to make it perform. He still holds more than 420 million Facebook shares worth a total of roughly $26 billion.

Selling stock is no different from what other corporate leaders have done. Facebook shares have more than doubled in the past 12 months. And no one's talking about Zuckerberg and his wife's donation of 18 million Facebook shares valued at nearly $1 billion to a nonprofit. He can't win.

What critics really don't like is that Facebook doesn't "follow the rules."

On the heels of Zuckerberg's $19 billion deal for WhatsApp, Dennis Berman of the The Wall Street Journal wrote: "There's been so little precedent for business at this scale that we have a hard time simply comprehending all of this."

But that's not Facebook's problem.

The only "rules" that matter are growth and profits. Facebook is doing better than most in those categories. 

But some observers have had a difficult time embracing anything Zuckerberg has tried to do over the past two years, including last week's $2 billion dollar acquisition of Oculus.

As with the WhatsApp deal before it, some analysts complained that Facebook was paying too much. Talking points ventured to how Facebook's "ambitions had become scattered." The deal was seen as yet another "head-scratching" event.

But in Facebook's fourth-quarter conference call, Zuckerberg laid out clearly what the company's long-term strategy was. It hinted at these sorts of deals. Analysts just weren't paying attention. During the January quarter's conference call, Zuckerberg said:

"One theme that should be clear from our work on products like Messenger, Groups and Instagram is that our vision for Facebook is to create a set of products that help you share any kind of content you want."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs