Here’s Why Sean Parker Says Facebook is a Good Buy
Early investor Sean Parker says he is likely to buy Facebook (NASDAQ:FB) shares at the current price and that expectations behind the recently public company’s stock had been “exaggerated.” During an interview with CNBC’s Ross Sorkin on Thursday, Parker, who has just launched a social video chatting company built on the Facebook platform, answered a question on whether he would buy the social network’s stock in the affirmative.
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“I think you know, I think I’m definitely a buyer at this price,” he said.
Parker also said while going public was an obvious step for the company, it may not have been done at the perfect time. “It’s possible the timing could have been better. And there were a lot of glitches along the way which were unexpected and unprecedented. That you know the Nasdaq stuff, the volume, you know the initial trading volume was so (…) really high,” he said.
Technical troubles with Nasdaq’s systems caused Facebook’s IPO to be first delayed for two hours and then cause widespread confusion over whether several millions worth of trades had gone through. But the stock has also been in trouble since that opening day, falling nearly 30 percent in value. The company and its underwriting banks have been criticized for increasing the number of shares up for selling in the days before the debut and also setting the opening price at a high mark of $38.
Parker agreed the high expectations played a big part in the debacle. “It’s just the expectations were so exaggerated and then the media kicked in,” he said “And this press cycle, this anti- Facebook press cycle kicked in and that spooked all the retail investors which you know caused a rebalancing of the stock price. So I’m not even worried if this becomes a fundamental’s driven stock, I want this to be a fundamental’s driven stock.”
However, Parker did not think that all the controversies associated with the IPO would dissuade other companies planning to go public.
“There’s a standard way these things get done. They were done in that way. You know this was sort of an extraordinary circumstance where perhaps you know they should have rethought some of the conventional wisdom. So I’m not even sure how relevant these lessons are to other IPOs because Facebook was such an anomaly.”
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