The News for Facebook Gets Worse
Today the news for Facebook gets even worse. Down another 9.62% on the day. It's dropped below $30 now, and it doesn't look good. I'm sure there are people in the next few days that will be saying "Time to buy!", but I find that just wishful thinking on their part.
There have been numerous articles written about the rise of Facebook on the mobile platforms that are all free, but show no adds - which is the lion share of the revenue stream for Facebook. Remove the adds, and the income to support the infrastructure simply isn't there. So they need the adds, but those aren't being valued as highly, or the belief among investors is that they shouldn't be.
It's not like I want people to loose money, but this Emperor's New Clothes with Facebook really had to come to an end. It's not the darling of Wall Street - it's an add company, and it's providing a data hosting/sharing service, and while their subscriber numbers are huge, they can't really grow all that much simply because that are that big.
It's time for them to diversify, and quickly. They need to do a Google, and try to get into a few other things that are as used and needed for a different reason. I'm not at all sure what that is, but I can't believe they can continue on this pace for much longer without trying to bolster investor confidence.