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GM vs. Facebook, What Would You Buy?

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  • Description

    Shah Gilani of Money Morning argues that he would invest in Facebook before General Motors.

  • Duration 4:22
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This morning.

If you have to buy FaceBook.

Or General Motors -- has right now which one would you choose.

Both by the way on down about 40% from their respective on PO prices let's bring in -- Gilani from Miami -- with a Monday morning.

Our job I'm gonna -- on the line -- you have.

Still by one all the other so which won't wouldn't it.

We'll talk about a hobson's choice sort that's sort of like you know picking between two I prefer watching paint dry war being in the middle of the -- skirmish.

I may surprise you I'm gonna go with FaceBook.

I'm not surprised I'm I'm not supply -- -- give me your reasoning -- General Motors I think their margins are gonna be -- forever I don't think they're gonna ever explode I don't think with the competition the global competition that they face -- they're really going to go anywhere too far.

They're never gonna pay dividend -- my foreseeable future.

And -- in the first quarter they generated 2.2 billion dollars in pretax profit.

One point seven of which came out of North America that got troubles in Europe -- something falters in North America year's best the United States gas prices rise considerably -- gonna get hit.

I'm not touching of the ten foot -- OK so not take the other side of the coin.

Why FaceBook what's good about and where do you see him go.

And what while General Motors is tethered to reality FaceBook isn't tethered to anything its IPO obviously wasn't tethered to reality either but I like the fact that the stock is down I'd probably start acquiring it here in buying a little bit lower do I think it can go hello yes I think actually can probably drop another 50%.

But I would certainly be accumulating that stock at some point probably -- -- into the foreseeable future.

I think the long term prospects for face but given its dynamics I think our our.

Pretty much unlimited what's so bad about FaceBook that you -- -- could repeat could draw a -- up 50% most of that.

I think the business model isn't clearly understood the dynamics of the company are clearly articulated in terms of Mark Zuckerberg is about face to the public in terms of he's -- good thing Google type represented he's going out to the public in saying this is what we are this is what we're going to do this so we hope to do we certainly not a Steve Jobs.

He's got to be the direction you've got to be the forces got to be the power behind -- he doesn't he hasn't stepped up yet.

I think the public is looking for some leadership and they don't see it I think that's what the stock is continuing to get hit.

Good -- on hold on -- 12 one Alaska company members exactly the same question all right senator you've got to investing one all the other which one is I'm probably gonna shocking here of that I'm gonna say General Motors.

And I've been sort of very skeptical about FaceBook from the beginning I was on your show that they IPO and I was very skeptical of I don't like the leadership at FaceBook I'm fearful of their earnings power it's a very expensive stock PDs over a hundred.

General Motors I think that the sales are down the economy is pretty much as -- as it can possibly be.

I think eventually they're going to sell more cars despite the fact that their cars might not be cool I think they'll eventually sell more are.

Doug Stewart I see it very differently I think with 900 million users.

They can get the revenue model right they can figure out how to monetize those folks get the advertising back and figure out how to use the data manipulation tools they have at their disposal to generate huge amounts of cash -- right they don't have their business model down.

Yet but that is in the future it's a story that I think is yet to be told.

All right let's bring back Shah -- -- -- that I'm sure -- we've got sounds are saying -- she goes with General Motors Doug says he goes with FaceBook.

I actually would go with General Motors my premise is that if we have a clean sweep and a completely new direction for the US economy in this November election.

We will set off a huge growth trend around the world and GM will do better from -- the will FaceBook.

Last would do you.

Unfortunately.

I hate to disagree with you but I do Stewart I don't think that General Motors has the possibilities of doing what FaceBook has which is unlimited possibilities.

General Motors exists in a boxing terms of -- competition globally in terms of the market share they can achieve.

And terms of its markets FaceBook is untethered I think the reality is that FaceBook can do anything and I think the future is there for FaceBook to have.

All right remember this day August 1 2012.

FaceBook -- 21 that General Motors at twenty we shall see what happens alright.

-- -- lot of good stuff thanks so much for joining us.

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