GO
Loading...

Facebook Stock Getting Its Groove Back?

Shares of Facebookhave quietly pushed higher with the stock up about 17% over the past 30 days.

Investors have been hitting the buy button encouraged by reports that Facebook plans to launch a string of initiatives that could drive profitability.

Following are just a few of the developments:

- Due to an aggressive launch of its new apps, Facebook will have them available worldwide in only a few months. Facebook takes a cut of any money these apps generate.
- Reports suggest Facebook wants to hire Hulu chief Jason Kilar for a senior position at the company, a move that suggests CEO Mark Zuckerberg may get more aggressive in his marketing strategy.
- According to the website Inside Facebook, the social network plans to supplement its "like" button with a "want" button that could push the site more toward becoming a place for consumption making commerce a mainstay of the site.

With Facebook making these as well as other aggressive moves , should you hit the buy button? Is Facebook getting its groove back?

If you’re a long-term investor, top Citi analyst Mark Mahaney says hold off. Although he appreciates all the positives he also warns the stock is facing negatives – and some of them may not be the kinds of things retail investors are aware of.

"There’s a lock-up expiration coming in November,” says Mahaney. That means in just a few months, select insiders and early investors in Facebook will no longer be subject to selling restsrictions; that could potentially flood the market with sellers.

“Lock-up expirations have pressured every IPO in the past two years and it should pressure this one too,” says Mahaney.

Also, Mahaney is concerned that at present levels, Facebook is already trading at a rich multiple. “Until Facebook shows re-accelerating revenue growth I don’t think investors will pay any greater premium."

At the end of the day, Mahaney thinks shares are fairly valued right around $35.

Trader Jon Najarian sees the stock a little differently. He does think you can buy – but only if you have a short term time horizon.

“The lock up doesn’t expire until November,” he says. In the near-term I’m seeing upside call buying – institutional investors are rolling out of July 31s and into August 36s.” That suggests they expect the stock to trade $36 by the third week of August.

However Najarian adds, “I would not be holding the stock later in the year.

Trader Mike Murphy is far more bullish. He tells us developments listed above demonstrate that Facebook is a long-term buy. “I think it’s gone from being a trade to an investable long-term holding,” he says.

--------------------------------------------------------------------------

SEEKING RETURN? Click here for Fast Money's Favorite Dividend Yielders

--------------------------------------------------------------------------



Posted by CNBC's Lee Brodie

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.




Trader disclosure: On July 10, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Brian Kelly is long TLT; Brian Kelly is long QQQ; Brian Kelly is long EURUSD; Brian Kelly is long USDJPY; Brian Kelly is long USDMXN; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long C; Anthony Scaramucci is long GS; Anthony Scaramucci is long JPM; Anthony Scaramucci is long SBUX; Anthony Scaramucci is long AMZN; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long WMT

For Kathy Lien
Nothing To Disclose

For Mark Mahaney
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of AMZN
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of NFLX
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of YHOO
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) GRPN
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) FB
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) YHOO
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) GOOG

For Andy Hargreaves
Pacific Crest does make a market in the shares of NFLX

For Mike Murphy
Mike Murphy is long FB




CNBC.com with wires.

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET