The pullback in Facebook shares presents an attractive entry price for long investors. The recent media coverage can be viewed as more of mass enlightening to the new normal in big data. Anything below $170 appears less than fair value to even conservative investors.
Facebook (FB) was recently hit by a data scandal that smashed the stock down 20% from recent highs. Some of this reaction may be due to overblown fears of regulations and user disengagement, while other parts may be justified. Regardless, it’s important to always view a stock’s price relative to its fair value to avoid jumping in to an overpriced company.
Author: Eric Oetjen