Facebook Stock: In a Steady Decline, is this Stock still a Buy?
Shares of social media giant Facebook (FB) have been falling lately. Is this an opportunity to load up on shares or is it a warning sign of worse things to come?
Facebook shares fell almost 3 percent Tuesday following a negative day on Wall Street. Tuesday's closing price of $74.69 is well off its 52-week high of $81.16 Oct. 29.
Besides the general decline of Wall Street lately, there is not really reason this company's stock should be falling. Let's examine closer what is really going on with Facebook stock.
Recently, Facebook updated its search process to help users find each other and each other's interests easier. Usually when Facebook does any tweaks like this, it's good news and it causes the stock price to go up.
Perhaps it's the general decline in social media stocks. There are very few companies like Facebook. There is LinkedIn, Twitter and Pandora and some others, but Facebook is really a one-of-a-kind company.
Year-to-date, Facebook is up 40.88 percent according to TheStreet.com, but with oil prices falling and the Dow Jones Industrial Average price falling steadily for the past five days, it makes sense for Facebook to naturally take the fall too.
Last week was Wall Street's worst week in two in a half years. That week had the Dow falling 3.8 percent and 315 points on Friday alone.
Facebook needs to figure out what a Facebook friend is worth. Each user sees dozens, if not hundreds, of ads every single time they log into the system. Facebook needs to find a way to capitalize on ad revenue as well as targeted ads that do not annoy users too much.
What do you think of Facebook stock? Do you own any shares? If so, are you thinking of selling them or loading up on more? Leave us a comment below and let us know what you think.
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