Facebook (FB) and Groupon (GRPN)

[boltman]

Almost every article I read is advising to sell FB and GRPN stock, except this one, which provides some interesting perspective on the outlook of both companies: http://community.nasdaq.com/News/2012-10/2-internet-commerce-stocks-to-consider-now-1-to-avoid.aspx?storyid=180241.
Could one or both of these be good opportunities to buy? Facebook stock is down to about $19/share (opened at $45) while Groupon is at about $5/share (opened at $31). What say ye?

~Boltman

[Pocono13]

These two stocks look highly speculative. In my opinion, Facebook is still basing and Groupon seems to have established a base now and seems poised to go higher. It should find support at 5$ per share, where the 20-day ma is located. Personally, I would not touch either stock.

[MLKMAN]

Since Groupon appears to forming a base and 55.95% of it's insiders own the stock while only 0.75% of Facebook insiders own it's stock, if I had to chose one, I'd buy Groupon. Plus, I use both regularly but have never bought anything off of FB, or clicked the ads.

[Winner]

I agree with Poco and Mlkman.

Check out CMG is trade near the support line at the bottom of the channel for opportunity to pick around 20% ($60 range) within couple of months. "The last time CMG ran into problems like this was during the corn and sugar price spikes in the late summer of 2011. The current price channel between $280 and $340 developed during that period and CMG didn’t breakout until corn prices broke to the downside in December 2011. Commodity prices (especially corn) spiked again during this summer’s drought in June and July. This created a perfect storm for investor sentiment when CMG reported earnings in July. The bottom line is that CMG is somewhat at the mercy of commodity prices, but those costs are now starting to decline again. The stock has reached a long-term level of support at $280 where a short squeeze has already occurred and could do so again as corn prices continue to decline from this summer’s highs. From a technical perspective, this trade is risky." It is risky for OPTION (CALL) since it require a lot of capital as it may take couple of months for CMG to make to upper channel as last year the breakout around Dec. Approximate 23% of short sales on this stock, it will take 3 to 4 days for the short to covering this stock. A lot of short sales started in Oct around $320 area.

[Winner]

CMG-If shorts decide to take profits or cover potential losses before earnings on October 18th, then a short squeeze will push prices back to $340. If the break above $340 with solid volume then the target will be $400 (price before the earning in July).

[boltman]

Thanks for the great advice from everyone. I'll be repping each of you. I've read about the problems FB is having with advertising on mobile devices and one expert believes it will baseline somewhere around $16. Considering the user base of FB (now at 1 billion), it's hard to believe that they cannot somehow figure out a way to generate revenue.

[Relevant]

Thanks for the great advice from everyone. I'll be repping each of you. I've read about the problems FB is having with advertising on mobile devices and one expert believes it will baseline somewhere around $16. Considering the user base of FB (now at 1 billion), it's hard to believe that they cannot somehow figure out a way to generate revenue.

Facebook shares will probably come under more pressure starting in mid-October, when holders of more than a BILLION shares, many of them employees, will be permitted to sell.

Facebook is currently trading at 3 times book value with a PEG ratio of 1.55. If I could get it at $12.50 or better I'd be tempted purely on a spec play.

The market is finally starting it's long awaited correction. It's time to dust off the shopping list and watch for bargains. Just don't buy too soon. Wait for the turn back up.

I don't find anything appealing about Groupon. No niche.

http://www.RelevantInvestments.com