Addicted to Facebook
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
So there is now a test designed by a therapist called the Facebook Compulsion Inventory to determine if you have a healthy or obsessive relationship with Facebook. Who would have thought it possible for Facebook users to like their "friends" (also known as complete strangers) more than the actual significant others in their life? Divorce lawyers, that’s who. Eighty percent of US divorce lawyers say filings mentioning Facebook are on the rise. Sad, of course.
And women, particularly young women, are the most likely to be Facebook addicted. This doesn’t really affect the stock much except it leads one to wonder with over 900 million users why can’t Facebook more successfully monetize itself? Facebook Inc (NASDAQ: FB)has been in a freefall since the IPO which may lead shareholders to wonder if they should take a similar quiz to determine how obsessed or objective they are about their relationship with the stock.
It’s a shame really because Facebook can be a wonderful service, solving crimes when perpetrators boast about their exploits, reuniting long lost sweethearts, finding lost pets, real time posting that helped lead to the ‘Arab Spring’ (along with Twitter) and of course, being the world’s largest archive of cute pet photos.
Companies like advertising on Facebook and being able to engage with their customers, often resolving consumer complaints right on their facebook page. Companies compete in the corporate popularity contest of how many fans they have, but is that really any benefit to Facebook? Is it the most effective way for companies to get their message across? That all depends on how well the Facebook page is designed which has led to a tenfold increase in jobs for social media engineers and web designers. If anyone is profiting from Facebook right now besides short-sellers it’s the people who have fallen into a hot new career. Kudos to them in this lousy job market.
On August 14, several companies divulged in their 13-F’s that they initiated or added to their Facebook holdings, the largest being Chase Coleman’s Tiger Global with 1,958,448 shares and also Soros Funds now holding 341,000 shares. These 13-F filers are able to hold long term and double down if need be. Maybe you can’t. Maybe you’d like to make money. Remember this week is the lockup expiration which will loose millions of shares and this will be continuing for months. And the P/E is still 70.52 even at half its all time high.
Some analysts theorize that facebook could make inroads on job listings ala LinkedIn (NYSE: LNKD) and mbaonline.com has an infographic that 18,400,000 Americans found their current job through Facebook, as much as those on twitter and LinkedIn combined. A Facebook job board is supposedly in the works but privacy issues aside the professionalism of LinkedIn is more appealing to jobseekers looking for higher income jobs. Expanding as a jobsite likely still won’t take down that 70.52 P/E much.
Now looking at the chart below without knowing the names of the two companies which would you rather buy? Google, Inc (NASDAQ: GOOG) is the hands down winner with a P/E of only 19.82 and a .98 PEG compared to Facebook’s PEG of 1.64. Google is now a mature tech and what I called in an earlier post, a ‘golden conglomerate’ taking the place of telecom, advertising,and entertainment stocks in a portfolio. It is also held by 1,523 institutions for 83% of the shares outstanding.
Morgan Stanley analyst Scott Devitt on August 13 upgraded Google to overweight with a $775 price target, for twenty per cent possible upside over 12 months. Devitt discounts market fears of a social media ad upset (read Facebook) to Google ad numbers as only having a 1% impact on those numbers. Think Equity one day later maintained a buy rating on Google raising its price target to $735 based on the Google announcement to shrink the Motorola Mobility workforce by 4,000 catalyzing speculation that Google is focusing more on the Motorola mobile device division and its patents and eventually spinning out the Home division, TV set tops and such. As for big 13-F filings big European hedge fund Lansdowne Partners, LP boosted their holdings of Google by almost 50%.
Google is close to hitting all time highs again, up 22.45% over the last 52 weeks, and why not? Google is no one trick pony, it has search, advertising, Android, YouTube, tablets. What’s not to ‘like’? It just acquired Frommer’s, the travel guide company and acquired Zagat’s restaurant guide before that. They have kudzu like growth into all things internet: daily deals, Google plus and now a new feature, Hanging out with Google which allows people to basically video chat with up to 9 people with Google Plus and even watch YouTube together, which should upset the ubiquity of Skype.
Google is the cure for your Facebook stock addiction. Even though some analysts think Facebook could move back up to $45.00, the high on its IPO debut, there are just as many recommending shorting the stock. If you’re addicted to the rush of Facebook hype get some Google instead and get that Facebook monkey off your back.
Chart courtesy Yahoo! Finance
leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook, Google, and LinkedIn. Motley Fool newsletter services recommend Facebook, Google, and LinkedIn. 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.If you have questions about this post or the Fool’s blog network, click here for information.