Facebook Hits the Red Carpet

Editor's note: As part of our partnership with Nightly Business Report, TheStreet's Debra Borchardt will join NBR Monday (check local listings) to discuss the market fascination with Facebook.

NEW YORK ( TheStreet) -- Internet initial public offerings can be compared to rising Hollywood stars: they start off with great promise and fanfare while some dwindle away to obscurity and others take home the Oscar.

Facebook ( FB) had the biggest star hype, but was also characterized as having the sloppiest launch. As a result of the botched IPO the company has been subject to hyper criticism. That's why the announcement of a mysterious press event on January 15th has drawn so much attention. It's a true red carpet moment.

Most new companies take it personal when the market turns on them after going public. The bankers have fawned all over them during the IPO process and behaved like a Hollywood entourage - Wall Street style. So, it's more than a little disconcerting for them to vanish once the stock is public and the critics knives come out.

Didn't you just love me yesterday?

Facebook suffered that A-list, D-list turnabout, and is now reaching for its comeback. The biggest criticism against Facebook from Wall Street critics was its ability to actually make money. So expect that this meeting will have some revenue aspect attached to it. Why else make all this hoopla?

The speculation has run the gamut from a Facebook-related phone device to advertising to revenue attempts through paid messaging. Whichever it is - rest assured this announcement will feature some box of money that Facebook has found the key to open.

More graphs of the amount of increasing active users on mobile just won't cut it. CEO Mark Zuckerberg knows he's got to bring it and it looks like he will. He is not going down without a fight. The stock is heading back to its original IPO price of $38 and this announcement could pull people back into the stock. If anything, it shows that Facebook is not content to collect its offering money and then sit back. So for the investors that were ridiculed for buying it back at $21, enjoy your profits - you may see them go even higher. Facebook's star is shining again.

Zynga ( ZNGA)hasn't shown the same kind of fight that Facebook has shown. The criticism for this stock when it went public was that it was a one hit wonder and too dependent upon Facebook for its reach to its users. Zynga tried to diversify its game through acquisitions, but none of those games were nearly as successful as its Farmville franchise. Then it attempted to saturate the market with Farmville-like games. It turned out the market really wasn't interested in desperate attempts to copy Farmville. Designers fled the company and it was widely reported to be a toxic working environment.

Even its underwriter has dumped the company, JPMorgan Chase ( JPM) only owns 2.6 million shares compared to the 6.7 million it owned in January of 2012. Even the JPMorgan analyst can't decide if he likes it and has flip-flopped on the rating. Zynga is now throwing its efforts at gambling. Zynga is becoming the Lindsey Lohan of internet stocks. It's gone from squeaky clean Farmville and Draw Something to the less respectful world of online gambling. A starlet with promise going down to the dark underbelly of the internet world.

One stock from the internet rat pack that hasn't gotten as much media attention is LinkedIn ( LNKD). The company will report its earnings on February 7th and the stock's star power is climbing in advance. Analysts have big expectations for LinkedIn's next quarter with estimates nearing a 41% increase in earnings. LinkedIn is taking share away from Monster Worldwide ( MWW)as it becomes the go-to site for job-seekers. A comparison of LinkedIn's 200 million users versus Facebook's billion may be keeping the loud bulls away, but just look at the box-office draw and see the fans.

Option buyers are already betting on an increase in stock price with high activity for calls with a $120 and $125 strike price. The stock is currently trading near $117. The stock went public at $45, but in the first day it climbed to $84, and then slipped to the $60 range. During 2012 though, it found its fan base and the stock hasn't looked back since. Investors though should be aware that LinkedIn's price-to-earnings is a shocking 761, while Facebook's is only 164.

Investors are willing to pay a premium for LinkedIn because its revenue stream is steady and growing, while they aren't as convinced about Facebook, yet. However, tomorrow's event could change that. Investors may soon hit the Like button on Facebook. And then Facebook may say, like Sally Fields did at the Oscars, "You like me, you really, really like me."

--Written by Debra Borchardt in New York.

>To contact the writer of this article, click here: Debra Borchardt.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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