Posted on 06/05/2012 8:58:45 AM PDT by Red Badger
Hedge fund manager Eric Jackson stated on CNBC’s Squawk on the Street that in the next five to eight years Facebook Inc (NASDAQ:FB) may disappear just like Yahoo! Inc. (NASDAQ:YHOO) has ‘disappeared.’
“Yahoo is still making money, it’s still profitable, still has 13,000 employees working for it, but it’s 10 percent of the value that it was at the height of 2000. For all intents and purposes, it’s disappeared.” Jackson does mention that his prediction about Facebook is a shadow of the company’s present self.
The chairman of Ironfire Capital says Facebook’s power may erode due to the continued emergence of mobile web, and the company’s struggle to adapt to it. Facebook IPO was launched on May 18 at $38 per share. But it has fallen almost 28% to $26.90 today.
Jackson identifies three generations of Internet companies. The first generation, dominated by Google and Yahoo, served as web portals that aggregated content on one place. The second generation belongs to social media networking, which is obviously ruled by Facebook. And the third generation is comprised of companies that monetize the mobile platforms.
“When you look over these three generations, no matter how successful you are in one generation, you don’t seem to be able to translate that into success in the second generation, no matter how much money you have in the bank, no matter how many smart PhDs you have working for you,” Jackson said. “Facebook can buy a bunch of mobile companies, but they are still a big, fat website and that’s different from a mobile app.”
Facebook acknowledged its challenge to monetize the mobile platforms in a regulatory filing. The company stated, “It may negatively affect our revenue and financial results.”
Jackson also cited the example of Google, which is struggling to move into social media.
I’ll gladly take it at $20. FB will have mucho earnings for years, and go above $150.
Don’t think so, but I don’t see a solid business plan like google.
Warren Buffet had it right. You can’t value a company that doesn’t produce anything............
Companies like Facebook come and go in the tech world.
Only a few have staying power -— Microsoft.
I believe this expert said the same thing about google and apple...
that is insane...at $38 it is over 100 times earnings. It is a $6-7 stock because of the sheer volume of shares that were released.
For it to be worth $150 they would have to quintuple their earnings per user or increase their users to 5 billion people.
Seeing as the majority of the people in the world still have a dirt floor in their house ... i don’t think the latter is going to happen any time soon.
Just my thought on it.
I don’t disagree that Facebook could be near-worthless some 5-10 years down the road, but it won’t be mobile that kills it. If anything, mobile users are big drivers of social media — they check-in and/or post photos from where they happen to be, rather than doing it from the computer.
There is the continued claim that facebook produces nothing and is therefore worthless. Warren Buffett invests heavily in newspapers which also produce ‘nothing’, and whose revenue is from advertising.
The Facebook person I know is a very smart cookie. Brilliant. But, like a lot of the Facebook crew they don't see the forest for the trees. And they have no concept of privacy. The way they look at it they are doing you a favor. They are "helping" you. They really think they are your "friend". It is almost cult like.
Another problem they have due to the fact they have a very generic service that is easy to copy and is replaceable is that their users (many are spammers) will leave in an eyeblink for the next new shiny toy that pops up.
The play with the Facebook IPO was to short it. It was doomed from the get-go. No adults in the room.
LinkedIn (LNKD) went to $120 (now $97 during the tech pullback), and it has a P/E of 694 (FB is 54).
How? Certainly not from ads, companies are already realizing that putting ads on Facebook doesn't result in clicks.
Oh noooooos. The haters out again. First of all Yahoo is alive and well. I use it for e-mail everyday. Secondly, Facebook will be just fine.
But it won't be worth 100 Billion dollars......................
They have massive new capital and will buy their way into huge mobile revs. I am not saying I want to own this forever, just to take advantage of an over-bearish situation that is already developing. I bought BIDU and LNKD IPOs once they consolidated lower, and FB will likely have a nice spike too.
When i go to Linked In I am there specifically to do business. I can tell you five stories in the last few weeks of how I have purchased or sold through those contacts. That still doesn’t mean that it is a good stock to own.
Can you tell me the same about Facebook? Not trying to be smart...just asking the question. I can’t say that any one I know has ever bought or sold anything off of Facebook.
I know people provide links on there to other sites where you can buy stuff or follow up with people but they are not there yet.
They are trying with the BranchOut concept, but they have effectively ruined other parts of the site (timeline layout) and there is no assurance they won’t do the same with Branch Out.
If you see something I don’t...let me know. A bunch of ill informed LInkedIn investors is not a compelling case for FB in my opinion
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