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Spencer: Facebook is Not Google

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  • Description

    Steve Spencer, partner at SMB Capital Management, weighs in on Facebook’s struggling ad platform.

  • Duration 3:40
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More bad news for FaceBook a new poll -- that uses all -- moved by ads on the social networking -- -- stock trading 30% below its IPO price of my next guest says that as long as the market is weak well it's a good shorting opportunity joining me now is Steve Spencer.

A popular SMB capital Steve thank you for joining us yet but down 2611.

Right now as you say -- course down about 3% today.

-- they onslaught gonna finish for this us stock.

I think at this point in May not being told they actually report their first.

-- quarter quarterly earnings -- -- have a company.

But you know the concerns well founded and we -- we just got the results of -- new poll that basically 30% of those those surveyed and not using FaceBook is much and then.

A vast majority of those don't know what happened themselves -- know anyone is actually.

Gone to an -- athletic on the site -- -- yeah I think.

That statistic can be a little bit misleading.

In the sense that FaceBook is not Google their their primary function is not to drive.

Sales directly searches down there're there're more akin to.

Television network where people are going there for to interacting and and do things of a social nature and you content that their interest it and how do you monetize it.

Well I if you have not as you mentioned to me earlier you have 900 people going there on a regular yeah assessing and -- -- contents.

-- same way that you would watch a program on TV if you're taking in contents.

That that brand awareness is going to potentially increase sales for company so it's a very different model.

Think Google I think the other thing that came out -- that survey and the fact that.

There was declining usage amongst -- -- of their users that's probably.

Cause for concern and I think you can see them taking certain actions.

Bomb related to making sure they have the best content -- -- -- Engaging -- users for example they just they just took over instead -- which -- you know and as the number one -- For people to share photos with their friends and the reason why they went after a company that I think was an existence -- -- one -- at that point.

Is they -- -- make sure that you're interacting on a social basis with your friends with your family.

That you're doing it through their application right and so -- They're not going to sit idly by and allow others to come in -- -- -- and not take making news so is the -- how do you play this stock.

Well I mean with the exception.

Since last Thursday other than last Thursday there really hasn't been much buying pressure in the stock yeah every every.

Spike in price has been shorting opportunity right and and as I mentioned to you earlier -- -- report that that quarterly numbers as a public company that first report.

-- they may not have anything that's going to intercede and and bottom out that's operates.

Would you agree totally botched IPO overpriced.

Too many shares out.

It's certain certainly there's going to be some heads are gonna rule from the yet and what does that do for -- the impact on retail investors.

Well you know retail investors.

Basically are looking up as market since the financial crisis had not had a lot of reason.

To you to feel comfortable -- getting back involved and I don't think we've seen them get back involved.

This was the thing that I think were -- a lot of these.

Found their companies were hanging their hat on but just positive IPO public recognized brand -- can bring some of these retail investors back.

And it was a disaster NASDAQ -- did -- -- this price it and it just adds to the negative feeling amongst the average investor.

If I you know I can't even buy a big brand like FaceBook -- be down 30% the first couple weeks to -- really wanna be involved in the market.

Very good point believe that -- again that down 3% today in a very weak environment all right Steve Spencer thank you very much SNB capital -- appreciate it thanks if you.

Itself back very get some bode well for the future -- it doesn't know.

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