Background: Facebook operates as a social networking company worldwide. Facebook, Inc. was incorporated in 2004 and is headquartered in Menlo Park, California.
Book Value: $5.35
Facebook is anticipated to report good fourth quarter earnings after the market closes on Wednesday.
The consensus estimate is currently 27 cents a share, an improvement of 10 cents (37%) from 17 cents during the same period last year. Analysts estimates range from 23 cents per share to 31 cents per share. Along with beating last year's results, this quarter is expected to beat third quarter's result of 25 cents per share.
The stock appreciated 97% in the last year, and the average analyst target price for Facebook is $60.89.
I'm not the biggest fan of Facebook because of the concentration of Mark Zuckerberg's ownership. Granted it's a double edge sword. On one hand, your interests are probably more aligned with management compared to a CEO with little or no long-term holdings. On the other hand, every shareholder other than Zuckerberg has zero say in any of the company affairs.
Shareholders will also want to diligently monitor Google's progress into social media. It hasn't made significant inroads toward Facebook's dominance yet, but continues to motivate users to migrate, or at least add Google as another social media outlet using search engine results as a gigantic carrot.
With that said, I'm also bullish on the company's prospects and absent a black swan event; shareholders should continue to watch their shares appreciate. Facebook entered the world of real money online poker with Zynga (ZNGA) in January. Facebook's monetization potential in online gambling appears huge. I wrote about the new partnership in Facebook and Zynga Increase Online Gambling Bet.
At the time of publication, Weinstein is long Zynga.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.