Facebook (FB) Stock Woes: As FB Stock Recovers, Is It Time to Buy FB Yet?
Facebook (FB) stock continues its road to recovery having gained more than 16% over the last five trading days to close almost at $32, just $7 below the IPO price of $38.
The gains have been triggered by increased confidence in the social network’s revenue growth model as Facebook has unveiled a series of business plans destined to reassure investors who were initially nervous about the company’s ability to translate its online success into the mobile market.
Ryan Detrick, a senior technical strategist at Schaffer's Investment Research, described the move as a “180 degrees turn” from the days of the botched IPO and the subsequent confusion that left many wondering if Silicon Valley was dangerously approaching another tech bubble.
However, the real test for Facebook (FB) as well as for its investors is going to be the upcoming analysis from Wall Street’s biggest firms – Morgan Stanley Inc., Goldman Sachs Group Inc., and JP Morgan Chase & Co. – most of which participated in Facebook’s IPO, which comes 40 days after the date of the IPO. It is then, when these Wall Street Giants will be able to rate the company. Both analysts and investors believe the report could boost FB stock even higher.
Hoping to capitalize on the good momentum of the last few days, and in order to soften some of the bad publicity from companies like General Motors and JC Penney who said Facebook advertising tools weren’t effective, the social network has touted a report from ComScore that says ad campaigns on the social media site boosted purchases among fans of many brands such as Starbucks and Target.
The social network hopes the recent influx of good news helps boosting its new ad space real-time bidding service as well as the acquistion for $100 million of Israeli face recognition software company with which Facebook hopes to galvanize its extensive database of users, products and companies hoping to seduce investors but risking to alienate users concerned about new privacy issues.