Contrarian Call: Time To 'Like' Facebook?
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Facebook may be one of the most hated short-term investments on Wall Street.
Even the bullish analysts describe Facebook as a "tomorrow stock," an investment that might pay off in the long term but isn't for someone looking for a short term pop. In two weeks, a couple of hundred million shares come off lockup—which many expect will trigger a big sell-off.
Which is exactly why some contrarians on Wall Street are considering taking a long position on the social network. (Ken Sena, analyst for Evercore Partners, offered a surprising price target for FB shares.)
My favorite contrarian investor, Matt Gohd at Revere Securities, thinks that it's time to give Facebook a shot.
"The assumption that just because you can sell, you will sell is likely flawed and there could be a dramatic rally, as people start to remember the reasons Facebook had willing buyers in the first place: 950 million users, a company very early on its monetizations strategies, and some very smart people who have turned social networking into marketing strategy," Gohd says.
What's more, he thinks that most of those still owning the stock are likely to be true believers.
Gohd thinks the stock could go a little lower when the lockups expire, but he is advising clients to set up a strategy using options that would allow them to capture gains from a 30 percent move higher.
"This still isn't a stock for the faint of heart," he warns.
Keep in mind that Gohd is a trader and may or may not hold positions in all of the investments he mentions.
(Click here for some of Gohd's earlier contrarian calls.)
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