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-- -- IRA our first.
Well our next guests and our first guest is Willis on FaceBook we don't acampora Bulls and Bears on FaceBook holiday -- the company -- at 32 dollars a share joining us by phone Rick summer.
Senior equity analyst at Morningstar.
Rick you know the valuation of this company I think is the hardest part of this whole equation nobody knows how to -- -- how do you come up with 32 dollars.
Yes stripping out only the hardest part does most.
Important part tackle what I think we're looking at is it how destructive in its company B.
And we really for the first -- really look got a lot further we looked out at ten years -- figured out not only.
Do we believe that the company it can get to about forty billion and an advertiser and related revenue also kind of running at this.
-- thirtieth in terms -- -- margins are operating margin.
Quote quote around where the probability of Google -- So there really important assumptions and figuring out the overall opportunity for there's been an evaluation for that takes up about thirty you don't share for a.
So -- where does it go from here I think many people thought this this stock would initially in the frenzy shoot up it never happened in fact where understand underwriters have to come in and stabilize it at the offer price of 38 bucks.
Where does it go from here does it does it gain -- small but solid.
Growth or not.
Certainly -- over the -- around that one of the things were island with our institutional client does.
There's a lot of near term had went in particular we think that ad spending may actually -- a pause button but we won't see a lot of growth over the next 1218 months.
If that happens that coupled with a decline in operating margin.
Good food costs -- soften the stock in May make an extremely insisting entry point down the line where it could trade substantially below where the IPO price was.
Are you surprised that way it's traded thus far today and -- I think I do think a lot of people thought this was going of the -- Yeah I think all of us your pride we gotta keep two things in and mind I think first of all.
This is probably the most liquid stock that there ever had been prior to an IPO.
There -- a lot of share there -- traded on secondary changes -- a lot of institutional investors.
State -- participated.
I think second this year size of the offering is tremendous so.
-- forget the percentage of flow but the billions of dollars the float that actually had to be absorbed by the market.
We all know how much is really flowed through the retail investor base here at that point but you know looking at and hindsight perhaps not not much -- of the surprises that should have been.
But break you know suddenly the NASDAQ played a role in this when you don't get confirmation on deal or does your reluctant to jump back -- my -- later on not.
Surely I mean are you surprised that the NASDAQ had this -- as they've been practicing for this moment all week or at least for the last two weeks.
-- it -- certainly in the present in meat from our perspective we really look at the underlying fundamentals of the company and the valuation merits of it so.
You know technical -- become a little bit more challenging it'll be ironed out over even the medium term here in terms of where the stock price -- out though.
So just look -- You -- you bullish on the stock would you -- -- here Rick.
No we wouldn't mean it is not trading far enough upper lawyers say what we would help people -- There's sort -- obvious that they can't sort of good point but we really think there's going to be an extremely attractive entry point so even though we're really bullish on this company.
We're saying put it on the watch let.
We could -- a very keep prices down the road.
Good staff next time I thank you so much is.
-- patients yet that in my mind that those problems let's say there's a lot of anger out there right now it can't blame stumbling openly calling all right cut.
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