Facebook shares: investors still not out of the “have to buy” situation

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Gold Prices, Expected to Move Down Further as USD Rises More
Gold Prices, Expected to Move Down Further as USD Rises More

Facebook has taken over the social media screen completely and has been doing well for quite some time now. Analysts believe it to be the most compelling investments in the online social media network. Currently the shares here are the best “buy” option. With a biased opinion, some believe that the engagement of youngsters in the ad service on Facebook is falling, but still others speculate a fruitful situation where investors will be motivated to buy shares. Considering Facebook shares, negatives have always surpassed positives, and the situation has remained so always.

Numbers in July are anticipated to remain better where factors like a push to the S&P 500 Index enhance in back to school ad and capitalization of Instagram may spark the reaction.

The back to school season remains a crucial factor of Facebook stocks as the company finds most of its clients in college premises and advertisers rely on it to run their advertising campaigns.

When asked is it the time to buy Facebook, a year after the turbulent controversy has remained strong, Facebook shares are priced at 30% below the normal range. Also, an almost nil sale over the previous year has brought down the price to earnings ratio to about 2000 to 1, which for S&P is just 19 to 1. Most well wishers, while trying to wriggle out for this ratio said that like majority of firms who are trying to wake their IPOs, even FB is in pursuit of adding to its market share. It’s thus the best time to invest here as the monetization is driven by sales instead of earnings.

Facebook went public with the value of USD38 for a share; however later the value plunged to just USD18 and currently it has managed to recover a little to USD26.25 per share.

Considering the broader inputs, it’s been speculated that the total market cap for Facebook by 2017 will be USD64.5 billion, that would mean USD26.66 for each stock, which is just slightly above the current value.

The two ways in which the company can get rid of this unlucky fate is by growing faster than most IPOs did in the past five years. This is not something that cannot be expected, seeing the early signs, which seem encouraging enough.