Facebook stock could hit $100 by 2014

CEO Mark Zuckerberg has taken the first step toward re-establishing investor confidence in the company.

By TheStreet Staff Sep 13, 2012 8:15AM

TheStreet.com logoarrow upBy Rocco Pendola

Facebook (FB) CEO Mark Zuckerberg did exactly what he needed to do Tuesday afternoon at TechCrunch's Disrupt conference.


He admitted a mistake.


Zuckerberg didn't talk his way around it or b.s. his way out of it. He didn't sound like a typical CEO.


Zuckerberg told the crowd that Facebook's biggest error was blowing two years not focused on mobile. In other words, the migration from the desktop to mobile snuck up on the company. Facebook was busy building a killer website when it should have been getting ahead of the curve in mobile.


It's really never been more complicated than that.


Folks who jumped on the media-navigated bearish Facebook bandwagon not only misunderstood Facebook's mobile strategy, as Zuckerberg said, they don't get mobile in general.


At this stage, Facebook has everything it needs to command a significant chunk of the mobile pie. It has the user base, which continues to shift to smartphones and tablets. And it has a team capable of shifting gears and erecting mobile applications that are every bit as good as Facebook's Web platform.


If Facebook was in the early stages of building an audience, I would be concerned. But it's not. Frankly, if one of the biggest mistakes Zuckerberg makes in his career is ramping up mobile a couple years too late, it's all good. And that's coming from a shareholder.


eMarketer's recent data show the mobile ad revenue market growing from $2.61 billion this year to $6.61 billion by 2014 and nearly $12 billion by 2016.


Google (GOOG) leads and will continue to lead. Beyond that, the hierarchy will change over the next few years.


There's a reason why Pandora (P) will finish 2012 in second place. Not only does it have a large and established audience, Pandora anticipated the mobile transformation long before Facebook did. It would have been tough for Pandora not to get a head start.


When Apple (AAPL) introduced iPhone, Pandora's audience went through the roof. Its platform went from one that, by and large, was tied to a fixed location to one users could take with them just about anywhere.


Because a lion's share of radio listening happens in the car, the mobile environment naturally suits Pandora. And it cemented the company as "radio," not some undefinable, but really cool "thing."


It took longer for users to treat Facebook the same or in similar ways. That's how it went down, yet, drunk on hindsight, critics yelp Zuckerberg missed the boat!


That's as absurd as it is unfair.


I bought more Facebook stock on Tuesday before Zuckerberg spoke. I like the guy. I have confidence in his ability. He's clearly one of the sharpest tools in the shed. And he came through.

He said all of the right things.


At 11:18 a.m. California time, I tweeted:

@RoccoPendola - Just added to $FB position. BTW, Zuck should have 2 words for people who want "answers" from him today. You know what they are. #stockaction


Obviously, the CEO has a bit more tact than I do.


Then, at 12:51 p.m., I tweeted:

@RoccoPendola - Have a feeling that if $FB can hit $20 after Zuck speaks, it doesn't look back. Once those mobile numbers come into view, look out.


FB crossed $20 after hours. You have to be careful with after-hours movements. The stock kept moving higher as Zuckerberg spoke. Without doubt, traders faded the top. Suckers bought that top in the extended session.


But the pain was only be temporary. On Wednesday, the stock already closed up 7.73% at $20.93. I'm in the stock at a cost basis of just under $23. And I'm not concerned in the slightest.


This thing has $100 written all over it by 2014 -- when eMarketer projects Facebook mobile revenue will top $629 million -- if not sooner.




Don't say the word "valuation." Investors will not price FB on the basis of some fifth grade mathematical formula. They will assign a multiple on the basis of the amount of confidence they have in Facebook's potential for and ability to achieve consistent and rapid growth.


Mark Zuckerberg went a long way toward instilling that trust on Tuesday. For patient longs, faith and strong hands will be rewarded.


More from TheStreet.com

Sep 13, 2012 10:45AM
he's personally down 10%+ (and the stock is down nearly 50%), and he is telling as many people as possible to buy b/c it's headed 500% the other direction.  does this make sense?  not really. even a good mobile app will only drive revenue so far (when the advertisers figure out it doesnt work there either).
Sep 13, 2012 11:23AM
Not going to happen.   Mobile phones have limited space for ads to be viewed.   People got burned in the IPO.     It sounds nice but Facebook is a left over dinosaur of the dot com age.  There's no tangible  product and Myspace was a foreshadow for what will happen to Facebook in the coming years.
Sep 13, 2012 12:08PM

I have some swamp land in Arizona I want to sell to the person or people that actually think Facebook is worth anything.  Google is a much different company than Facebook is.  Google has a web browser and search engine.  Facebook does not.  Google gets paid for click throughs facebook does not.  In fact most people hate facebook.  Yes a lot of people are on it, but same can be said of myspace at one time and look at myspace now.  Talk to people with facebook profils and I guarantee you 80% hate facebook.  They complain about the constant privacy changes, the constant website changes they cannot opt out of.  I generate no cash for facebook and I never will.  There are hundreds of millions out there just like me that will never generate cash for facebook.  I would never trust putting my credit card on anything linked to that website.


Facebook will never get back up to its IPO price. 

Sep 13, 2012 11:27AM

"Folks who jumped on the media-navigated bearish Facebook bandwagon not only misunderstood Facebook's mobile strategy, as Zuckerberg said, they don't get mobile in general."


Bought some FB, did you? Folks just don't get it, do they?


This column is the surprisingly feverish gush from a tout, one who curiously believes that "this time, it's different."

Sep 13, 2012 1:20PM

Really???? Dude how many shares do you own?? Can anyone say Pump and Dump??  Is Mr. Pendola one of those geniuses that had everyone buying at $38!?! Wow, hard to believe.  It WILL  hit $1 before it hits $100.  Sorry dude no takers here but I am sure there are still a few suckers around somewhere. This is pitiful! What a joke!

Sep 13, 2012 1:16PM

First off: $100 by 2014? yea ok. I wonder how much FB paid to have this written and published? It wasnt even woth its $38 and/or $42 per share price when it came out! How is going to be worth about 5X its current calue (around $20)?

Second: "Zuckerberg didn't talk his way around it or b.s. his way out of it. He didn't sound like a typical CEO."

Thats because he isnt! He half-stole the idea from someone else, then just pushed everyone out of his way and did whatever he wanted (yes, that does sound like the typical American CEO), figuring his followers (ie FB users) wouldnt leave the site. 'Dont want timeline? ok. Well, no wait i'll force it on you anyway.' He is just a hoody-wearing, Acura-driving, totally inept businessman-theif. $42/share.....yea...that happened. It'll be below $18 again soon.  There has been a steady stream of people leaving FB as of late, I will be joing them shortly.

Sep 13, 2012 3:46PM
"On Wednesday, the stock already closed up 7.73% at $20.93. I'm in the stock at a cost basis of just under $23. And I'm not concerned in the slightest."  And my optimistic evaluation of $6.25 a share still stands based on the unaudited account statements that Zukerberg has provided (see my response to Cramers turnaround last month).  My $20.00 February puts were paid for buy the profit on my September $25.00 puts. If your right I have already banked half my profits.  If your wrong, I could make thousands more.  I just love people who do what Morgan Stanley tells them to do.
Sep 13, 2012 2:06PM
in your dreams!!! my daughter once lived on fb ... she doesn't go there anymore .. I stopped 2 years ago ... its a bubble
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124 rated 1
266 rated 2
452 rated 3
702 rated 4
671 rated 5
604 rated 6
640 rated 7
495 rated 8
267 rated 9
158 rated 10

Top Picks




Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.