Matt Franz : Zealous For Knowledge

Facebook

I wrote up my thoughts on Facebook and posted them to Seeking Alpha. You can read it here. Having read some of the comments, be advised that my article is not a discussion of Facebook’s utility or morality. You can decide that for yourselves. My article is about valuation.

I argue that Facebook is too cheap at its current price (about $135 per share). It has a strong balance sheet and its network is intact, despite the heavy criticism it continues to take. Facebook still has many avenues of growth available to it. Most of these require minimal capital yet have the potential to produce multi-billion dollar payoffs. They’re all highly asymmetric bets (“heads I win, tails I don’t lose much”).┬áThese are the growth opportunities I like.

Disclosure: I am long shares of Facebook.



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