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Sterne Agee Managing Director Arvind Bhatia on Facebook’s opening and the outlook for the social networking company.
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-- Facebook's debut my next guest had -- gas and by high.
With the price target for the full year 46 dollars pleased to be joined by our -- back -- managing director Sterne Agee.
-- -- in two year old lot of talk right now a lot of surprises waiting to see a pop at the open a lot of criticism.
On the NASDAQ for the way the debut is being handled what do you make of the price -- some of these issues being talked about right now.
Look I think guy everybody expected a bigger -- then that has actually happened so and -- -- they're surprised.
But this is all well there's gonna be a challenge for them to managed.
All of the frenzied it was coming along with that.
Up -- him in some ways are -- glad that there's didn't get carried away people and get carried away and we didn't -- -- not irrational.
Behavior.
-- following the launch of the company.
Again I think the difference is here -- says many of the others you're mentioning earlier Linkedin.
A group on some of the others this company was effectively public for the last few years so there was a market people had some idea of where the stock has been and was going.
And then also consider the fact that you know when they've prizes.
They've trying to provide -- range initially.
It was 28 to 35 dollars a worse is that.
This stock is up almost twelve dollars.
All -- up 40% from the lower end of that range so I think that perhaps the price of a little bit higher.
Then they should -- but all set and I think god not too bad.
But in.
Start us back -- got to give the underwriter some credit for pricing its act 38 dollars because.
As you've been discussing -- seem to leave a whole lot on the table they're not over valuing it either and your own price target.
Fully a price target of 46 dollars and then in two years 59 dollars seems very reasonable.
Exactly yeah I think gov for the underwriters are the top tax challenges to balance the need -- Not a company that's going public now with the needs of the investors and honesty is a negotiation process that goes on.
And at the end of the day you know I agree that they didn't -- too much money on the table.
But we would like to bigger -- -- that you know to see a little bit more -- would have been nicer on the first day OK I think it would -- give their recent investor more confidence.
Going forward FaceBook casts -- really impressed us as investors shareholders if you're lucky enough I suppose.
No penetration in China whatsoever a lot of concern about monetizing its mobile users.
The ad platform got -- hit this week the DM dropping out of its advertising commitments.
Are you confident they're gonna -- no record your price -- you must have a lot of confidence com.
Statins and optimism on trying to combine those two parts -- forgive me but at the T think they're gonna come through here are the enemy you're here expectations FaceBook.
I think you have to consider that this is a multi year story if you're looking for so immediate -- ratification.
On the numbers you might be disappointed.
I think out for these guys -- -- First and foremost task is -- maintain a strong user experience so that people keep coming back.
What that might mean and it made it abundantly clear what that might mean is in the short term.
There is also fluctuate the General Motors example to me in in some ways -- signifying that because this is such a new medium.
Advertisers are trying to figure out how best to use it it's part of the growing pains.
And again so I would not expect everything to go to go.
I straight out from here to -- fluctuations which is why you need to look at this on a multi year basis but a lot of no growth portfolio managers.
That I talked to are suggesting to me that they want to -- this.
As a core holding in their portfolios.
This is has got a large address of a margin of 600 billion dollars.
They're gonna have a billion people on it advertisers are gonna find it to -- and ignore.
Those are things that you have to pay attention to more than the near term much raises in the numbers.
They had challenges ahead that's for sure are -- -- hit.
Thanks for sharing -- outlook with us.
-- on September.
