Facebook’s Got a Happy Buzz
If the price movement of a stock is proxy for buzz, then investors are expecting Facebook (NASDAQ:FB) to report one hell of a fourth quarter. The world’s largest social network will release its year-end results on January 31, but there’s no patience in today’s fast-paced tech market and — as has always been the case with Facebook — speculation is moving the stock.
Shares have climbed 58.5 percent over the past three-month period and are now trading at over $30 for the first time since July. Investors who bought in at the IPO are just 18 percent shy of breaking even, and those who bought the dip are laughing at the bears. Both parties — and those who own the 55.16 million short positions on the stock — are looking ahead to where the next price ceiling will be.
The stock bumped against $28 for a few weeks before breaking out at the beginning of January on the tail of high sales outlooks for the most recent quarter, and a mystery event to be held on January 15.
The event, which will be held at the company’s headquarters in California on Tuesday morning, has generated the standard flurry of speculation. Facebook’s invitation came loaded with the phrase: “Come and see what we’re building,” and really one can only throw a list of products into a hat and pick one or two out at random…
The rundown includes everything from an smartphone (unlikely) to a more robust e-commerce platform (more likely) to a social jobs platform (perhaps the most interesting). But the nature of the beast is that any of these angles presents Facebook with a massive competitor. Why enter a smartphone market that is dominated by Google (NASDAQ:GOOG)? (Facebook is more likely to compete in the mid- to low-end market than the high-end, where Apple (AAPL) reigns.) Facebook has already expressed its interest in building out across existing platforms, and not trying to reinvent the wheel on this one.
Facebook Gifts was an interesting step for commerce, but trying to become a substantial e-commerce platform means butting heads with Amazon (NASDAQ:AMZN). Again, why not build a relationship and work together?
Nobody wants to get caught off guard by Facebook’s big announcement, so everything has been put on the table, which doesn’t do anybody much good. Suffice it to say, something is coming. If you’re a gambler, place your bets. The movement of the stock price since the announcement suggests that investors are expecting a fairly significant catalyst.
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