FB had a huge spike after earnings . However, when one looks at the chart, this spike and the optimism seem unwarranted.
FB is still well below its long-term trend that has been in play for years. The trend was irreparably damaged in October, and the probability that FB sees a new high in the short term seems almost impossible (what will drive it?) The chart currently is so absurd that it's impossible to predict. It created a huge gap that will be filled shortly. And it seems to desperately try to remain in its previous trend, but has moved too far down, too quickly, to re-enter it.
It is also very suspicious that the reports of up to half of FB users being fake was completely ignored by the market. And it seems that FB's own estimates of fake accounts varies wildly year-to-year and is now estimated at over 100 million. www.nytimes.com/2019/01/30/techn...
When a company reports the revenue per user, and then estimates that the number of fake accounts is over 100 million, serious questions need to be asked which currently are being ignored.
My guess is that FB knows that it's popularity is decreasing, and they faked the numbers and growth to try to buy some time (maybe through Instagram or VR or something else).
I would be very cautious here.
FB is still well below its long-term trend that has been in play for years. The trend was irreparably damaged in October, and the probability that FB sees a new high in the short term seems almost impossible (what will drive it?) The chart currently is so absurd that it's impossible to predict. It created a huge gap that will be filled shortly. And it seems to desperately try to remain in its previous trend, but has moved too far down, too quickly, to re-enter it.
It is also very suspicious that the reports of up to half of FB users being fake was completely ignored by the market. And it seems that FB's own estimates of fake accounts varies wildly year-to-year and is now estimated at over 100 million. www.nytimes.com/2019/01/30/techn...
When a company reports the revenue per user, and then estimates that the number of fake accounts is over 100 million, serious questions need to be asked which currently are being ignored.
My guess is that FB knows that it's popularity is decreasing, and they faked the numbers and growth to try to buy some time (maybe through Instagram or VR or something else).
I would be very cautious here.