GO
Loading...

Is It Finally Safe to Buy Facebook?

CNBC.com
Tuesday, 10 Jul 2012 | 6:46 PM ET

In the aftermath of Facebook’s botched initial public offering, “Mad Money” host Jim Cramer wondered if it’s finally safe to buy shares of the world’s No. 1 social network.

Facebook
Nicholas Kamm | AFP | Getty Images
Facebook

“We know the Facebook deal was a fiasco of epic proportions — an event that soured regular people on the stock market even worse than the flash crash and for good reason,” Cramer said. “But there’s a price for everything, even the most tarnished merchandise and the stock has come down.”

Is It Finally 'OK' to Buy Some Facebook?
Mad Money host Jim Cramer breaks down a positive call on Facebook made by Scott Redler of T3 Trading, and shares his opinions.

Cramer noted that Facebook’s stock is currently 6 points below where it came public and 10 points below where it opened on the first day of trading. It's also fair to note that this $31 stock has had a huge rally off its nasty bottom of around $25 a share, he added.

“I’m wary of going anywhere near this one before it reports [quarterly earnings] later this month on July 26 because we’ve heard to many worries about a slowdown in Facebook’s business caused by users migrating to mobile devices in droves over the two months leading up to the deal, because mobile has dramatically lower ad rates,” Cramer said. “My view, based on the fundamentals, is that it still might not be safe, and after all the things that have already gone wrong here, the prudent course right now is to wait and see those numbers even if we miss some upside."

Scott Redler, a highly regarded technician on Wall Street, takes a different view. After looking at the charts, Redler thinks the danger may have passed, making Facebook a buy. Redler is long the stock, which means he owns it for the long-term.

So what’s Redler seeing the Facebook’s charts? Watch the video to see Cramer break it down.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
FB
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.