FB: Facebook - Remain Short As New Products Are Duds

Facebook - Remain Short As New Products Are Duds
by Sneha Shah

I had recommended selling Facebook (FB) due to its expensive valuation, increasing competition and lack of new products. Technology companies can quickly become obsolete if they don't stay on top of their game. There are numerous examples of technology companies "dying" due to dramatic changes in the industry. Social Media has proved to be particularly dangerous with Myspace, Orkut and other social media companies losing market share to new entrants. Facebook which is the world's largest social media company with over 1 billion users is losing ground to new companies. User fatigue has set in with Facebook, as new messaging applications like Whatsapp take away social communication market share from FB. Facebook stock has given large losses to its IPO investors and the stock will continue declining unless the management makes a radical overhaul. Its recent product introductions like Facebook Home and Graph Search have been underwhelming to say the least. Google (GOOG) is also chipping away at Facebook with its revamped social media offering - Google Plus. Though Facebook stock has declined by ~14% since I had recommended selling FB, I would continue avoiding the stock as I think that it will go down more. read more »

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