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Takeaway: 64% NO; 36% YES

Poll of the Day Recap: 64% Wouldn’t Friend Facebook Stock - dislike

Right now, 43 analysts have a “Buy” rating on Facebook and nine have “Holds” – there are zero “Sells.” Shares are currently trading at 14X revenues (with advertising revenues set to slow meaningfully through 2014 according to Facebook management). Hedgeye CEO Keith McCullough believes that “as revenue growth slows, this wacky 14x revenue multiple should compress.”

That said, we wanted to get your opinion by asking in today’s poll: Would you buy Facebook right now?

At the time of this post, 64% of voters said NO; 36% YES.

Several NO voters agreed that the timing isn’t right either because of #bubblesbursting, or the market being too risky, as this voter explained, “Technically the chart needs more time to base and consolidate before stepping in to buy. Second, the Nasdaq is in a downtrend presently, which is leading the market, and therefore, initiating a buy here would be trying to catch a falling knife or going against the path of least resistance. There are much better plays out there right now, but $FB will be on my watch list.”

Another person who voted NO said, “The multiple to ARPU at Facebook is still ~80x. Mature subscription businesses (i.e. Satellite TV) trade at multiples of ~3-4x. Facebook will have to grow ARPU 20 fold just to grow into its current valuation. That's a tall order for a small business, let alone a company of FB's size.”

Additionally, a different NO voter pointed out that “the business model might be powerful, but everything has a price. There have been 411 insider transactions since the IPO for net proceeds of $15.2 billion. Only one of those was an insider Buy – and that was at $21.03 for a million bucks. That's only 0.01% of the total cumulative Insider Transaction value – and was at a price that's 63% below current levels. If Insiders won't buy, then why should I?”

Those who took the opposite stance and voted YES said:

  • “Facebook is going beyond the traditional social network they've built thus far, and will do what Google is doing by buying companies that extend beyond the scope of their core business.  Google took the first steps with Nest, while Facebook did it with Oculus; there'll be a lot more of this.  Soon they'll both look like modern versions of General Electric.”
  • “As a small business owner, it is a very inexpensive way to advertise/promote to a targeted customer group.  This will help add revenue to FB, as well as, their other strategic plans. Long term buy.”
  • “I voted yes because analysts have price targets around $84.00 and I believe FB is investing in the next generation of relevant technologies. It's not about the teenagers anymore.” 
  • “I voted yes because Zuckerberg is in agreement with Hedgeye that his stock is overvalued. Using FB shares as a currency to enter new markets is a good thing.  He is not content with just being a social network and over time the bears will be proven wrong.  Oculus VR is a fantastic technology that is being underestimated by the main stream media. Facebook continues to eat Google and Yahoo's lunch in display ad revenue.  They have turned a much maligned Instagram acquisition into an engine for growth.  Sometimes companies that have the most long term potential appear overvalued, I understand the bear thesis, but do bears really understand the bull case?”
  • “I believe the stock with reach 80 - 85 in the next year.  Zuckerberg is too vain to do anything but succeed.”