You're watching...
Pivotal Research Group Senior Analyst Brian Wieser on the outlook for the social networking company.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- you know what they might should've listened to my next guest he's market analyst Bryan Lee there.
And he's been saying from the very beginning avoid avoid avoid sell sell sell Brian what do you see that made you think you know what stay away -- And FaceBook.
I don't think to have enabled them frankly was just a question looking at the fundamentals and you know when you corporate the risks into an assessment of the opportunity which we still believe is actually quite strong.
It's difficult to come up the price point that higher than the thirty dollars that we put on it.
A while ago.
Is frankly priced for perfection.
And ignoring the risks had 38 dollars.
All right so what you saw essentially was -- Facebook's revenues weren't coming and so hot the operating expenses were going way up.
And it was trading at seven times -- apple -- that in a price earnings basis is that right.
Well yeah.
You know I mean we looked at is slightly different way but it no matter how you Qaeda it was robustly valued and you had to ignore that.
They're marketers that don't know what they're doing frankly on FaceBook they're there because they believe they need to be there -- problem there other.
-- -- -- Then -- -- other marketers who are spending money they don't know how to assess hit we saw this with General Motors last week.
Marketers universally you know that they can't tell.
What the interplay between their FaceBook activity in their non -- -- activity because frankly just doesn't work that way.
So there's a lot of problems that will be worked out over time and we're frankly optimistic in the long run but in the short run there's a lot of volatility -- a lot of risk.
Yeah a lot of risk with that basically I -- my own personal to my mind my personal opinion FaceBook is that one big giant application it's a path.
But you know what can make -- story Brian that would be the investment bankers leading of these this -- Morgan Stanley JPMorgan Goldman Sachs all -- At reportedly their earnings forecast for FaceBook.
And the rest the market didn't know about that what do you make of that story.
Right well we heard about that is I think a lot of people in the market did the day it happened.
Obviously didn't go as wide as it could have.
-- it.
Frankly it was a little bit troubling when we heard about because we're not part of an underwriting syndicate on this that said we don't know what they were cutting from the what they're cutting too.
So RS -- and change we don't know that they didn't actually online with our estimates.
And that's pretty rare when you're in the middle of a -- -- for an IPO where -- investment banks leading the underwriting.
To cut their earnings forecast right I mean I haven't heard about that -- decades right.
Absolutely it's it's very rare aren't so where does FaceBook go from here reducing the stock added.
Yeah what we think that thirty dollars is is a fair value.
Frankly with all of these other issues going on -- hate it does start to feel -- there's more risk to the downside and the upside.
Certainly the the SEC.
If there is an investigation.
That doesn't look very good.
There could even be a negative feedback loop on marketers to the extent that the marketer was a hero.
For having a FaceBook campaign as I said a lot of them -- there because they believe they need to be there.
If FaceBook is now facing a situation where -- don't look like heroes from being there that's a real risk to the upside.
All right Brian -- certainly -- market analyst.
Who said avoid the face but he would've spent a lot of money to listen to Brian thank you so much for being with us tonight sir we appreciate your time.
