Wrong, Barron's: Facebook will hit $100

Don't let mindless negativity make you miss the boat on the social network as it catches up with mobile.

By TheStreet Staff Nov 28, 2012 1:06PM

Arrow Up copyright Photodisc, SuperStockthestreet LOGO

By Rocco Pendola

 

Because I can't get a paperboy to plunk The Onion against my front door on Saturday mornings, I still subscribe to Barron's. Jim Cramer says hasn't read the paper in eight years.

 

It's tough to blame him.

 

And it's tough for a guy like me to organize the activities that will occupy my time. On one hand, I need to read stuff like Barron's September cover story that said Facebook (FB) shares were headed to $15. On the other, I can't allow it to influence me, even when I'm cumulatively mind-numbed with similar tripe.

 

With Facebook, the media turned on the company and its shares in the wake of its IPO. The pile-on began.

 

Then things got crazy.

 

As I wrote in TheStreet in my response to Barron's now laughable claim, the dude who wrote the story thought he had something. So he did abysmal analysis and, lo and behold, Barron's hauled off and published it.

 

The guy's entire argument centered on Facebook's price-to-earnings ratio, relative to companies such as Apple (AAPL) and Google (GOOG), mobile monetization and Facebook's options program. All poorly constructed, surface-scratch thoughts on why Facebook has no future.

 

In my Merry Christmas article, I take those arguments down, particularly the mobile and stock-based compensation ones, point by point.

 

There's so much misunderstanding out there over mobile and disruptive growth companies. The mainstream media's involvement in the Facebook story only makes the problem worse.

 

When you limit the discussion to finance and tech guys, you have a relatively small number of people who don't know what they're talking about doing the talking. Throw everybody else into the mix and you have what we have: a larger number of people who don't know what they're talking about doing the talking. But, worse yet, they never took a serious look into the enormity of the mobile transformation.

 

We expect a six-month-old to walk. And don't think of time in terms of the age of a company. Think of it in terms of mobile uptake, both by the platforms and advertisers.

 

Consumers ran the table on mobile. It was really quite incredible to see how amazingly fast so much of the world moved to using apps on mobile phones. Some companies either got lucky, recognized the trend or -- thanks to a mix of luck and recognition -- had platforms ready-made for mobile.

 

Think Twitter. And, think Pandora (P), despite its recent brain farts in the fight over royalties, as I wrote about on The Street.

 

Let's hope the royalty missteps do not sink the company because Pandora, as a platform, remains the real deal. It simply could not have missed the move to mobile. It smacked Pandora upside the head the day Apple introduced iPhone. Pandora adoption skyrocketed because listeners could now take Pandora with them wherever they went.

 

You have to give Facebook the benefit of the doubt for missing in this respect. Different platform. Less visibility into the trend. And even if you do not give Mark Zuckerberg the BOD, let bygones be bygones. Move forward or be left behind.

 

The things Facebook has only begun to do with its platform are mind-boggling in terms of the revenue the company can generate. The notion of "gifting" items like iTunes gift cards alone makes this thing a $15 stock for goodness sake.

 

You click "gift," the recipient receives a message, he or she interacts with Facebook, heads over to Apple, buys some songs and the relationship is sealed. Next time, the recipient might be the gift giver. And so on and so forth.

 

$100 for this thing -- thanks to a mixture of momentum, a change in market sentiment and massive revenue growth, particularly in mobile, over the next 12 to 24 months, not to mention profitability -- is absolutely not crazy. Get ready for blowout earnings reports. Facebook's lack of guidance spells bear trap. This thing will absolutely fly on a meaningful earnings beat.

 

Folks who refuse to look won't know what hit them. Meantime, Facebook longs will have a Merry Christmas, Baby (any excuse to work Springsteen into a column!).

 

More from TheStreet.com

5Comments
Nov 28, 2012 4:45PM
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Also ask anyone who uses fb if they have ever "intentionally" clicked a fb ad on their phone ......I bet not one !

Magic beans folks and this is just another of cramers snake oil salesmen .....
Nov 28, 2012 5:34PM
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No, FB will never grow or have value.  Advertisers are stupid to advertise there.

You want to sell a food item, have samples at the store for people to TRY.

You want to sell cars, have a salesman with a car standing in a mall for people to SIT in the car.

Showing someone a picture or logo of a product doesn't get them to WANT to buy  your product, it merely informs them it's out there, which they soon forget after they've looked at there friends party pics.


Nov 28, 2012 4:42PM
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  "Jim Cramer  hasn't read the paper in eight years." 

It's always amazing how someone who would lose an argument with a turnip can just drop some drivel in a doc and shoot it over to cramers site to hopefully make them some money......this moron has been calling FB a buy from the IPO days .....he has said buy so many times it's a joke ....and by the way numnutz it is still a lot closer to 15 than it is to 100 .......i thought cramer was the worst pump and dumper at his "infomercial" site but this guy is trying hard ...I guess he is hoping to get a CNBC job like that slink woman by rubbing against cramer.
Nov 29, 2012 12:07PM
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Oh and maybe cramer should read barrons .......he might have figured out that bear stearns was not OK  --- that Alcoa was not a screaming buy at $19 .....that Lennie Dysktra was not "one oft he all time great investors" ......the "eddie lampert will turn sears into a great success"......the list goes on and on !
Nov 28, 2012 1:40PM
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fb will be equal to google one day... its  no brainer... by the way, i hate sucker and he irritates me...
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