Why Facebook Is Being Disliked

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, social networking giant Facebook has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Facebook and see what CAPS investors are saying about the stock right now.

Facebook facts

Headquarters (founded)

Menlo Park, Calif. (2004)

Market Cap

$66.8 billion


Internet software and services

Trailing-12-Month Revenue

$4.6 billion


Founder/Chairman/CEO Mark Zuckerberg

CFO David Ebersman

Trailing-12-Month Operating Margin



$10.5 billion / $902.0 million





Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 43% of the 1,635 members who have rated Facebook believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star MKArch, succinctly summed up the Facebook bear case for our community:

Although not quite as insanely priced as IPO day, Mr. Market is giving me another shot at red thumbing [Facebook]. ... When you get down to it, Facebook may be a great service but its business of selling banner ads no one ever looks at is mediocre at best. I ain't buying mining the useless blather people put on their pages for useful data is going to amount to a substantially better business. At their current market cap of $66.7B, something like 14X revenues, they need a whole new killer business that [no one] knows about just to justify their current market cap.

Of course, this short pitch doesn't even come close to telling the entire story for Facebook. You're in luck, though. The Fool's brand-new premium report on Facebook tells all sides of the story for one of the most powerful Internet companies in the world. You can grab your copy now, which comes with free updates for 12 months, by just clicking here.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Facebook Is Being Disliked originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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