Everyone's favorite internet narcissism site has exploded in the pre-market. After reporting some not as bad as expected numbers, analysts at Citi, BofAML, and Stifel have upgraded the wunder-stock to BUY and that has sent this 14% of float shorted stock up 25% - to its huge gap-down level from 7/26 (last earnings). Technical squeeze of all-clear? With 23 Buys, 15 Holds, and 4 Sells, what can go wrong? Especially with ~$16bn of market cap from lockup expirations due to hit within two months.
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Thoughts - Via Deutsche:
Facebook reported revenue 3% above consensus and EPS also beat by $0.01. Ad revenue is re-accelerating on the back of Sponsored Stories in Newsfeed, which was around $200m in 3Q12 (up from $30m estimated in 2Q12) and with $150m coming from mobile ads. The exit run rate for SS-in-NF was “over $4m” suggesting as much as $500m-$600m in 4Q, but are likely cannibalizing rightrail ads. While we are excited about the ad acceleration, we are largely maintaining our 2013 estimates on higher ads but lower payments revenue. Our optimism is weighed down valuation, as shares trade at 34x 2014 EPS vs. online advertising peers at 15x.
and Via Goldman - The Lock-Up Expiration Schedule
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