How Low Can Facebook Go?
The following video is part of our "Motley Fool Conversations" series, in which Chief Technology Officer Jeremy Phillips and senior technology analyst Eric Bleeker discuss topics around the investing world.
Despite continuing analyst price targets pushing past $40, Facebook has seen its share price sinking like a stone recently. Eric and Jeremy look at where a baseline for Facebook might be. The company has $7 billion in cash to work with, and Eric points out how the company's P/E isn't reflective of its current earnings ability as the company, as Facebook has purposefully held back on using more real estate on its site for advertising.
In the end, neither Eric or Jeremy would buy Facebook as a display-advertising company, or even one with a payment platform. However, while Jeremy says he'd never buy Facebook until it proves it's not just a display-advertising company, Eric says he'd become extremely interested in Facebook below $20 on the promise of steps it could take to create more meaningful advertising. To see their full thoughts, watch the video.
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At the time this article was published Eric Bleekerand Jeremy Phillips have no positions in the stocks mentioned above. The Motley Fool owns shares of Baidu, Facebook, Google, and Microsoft.Motley Fool newsletter services recommendBaidu, Google, and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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