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The following article was published in our article directory on December 11, 2012.
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Article Category: Business
Author Name: Ken Poirot
Today's upgrade of Facebook stock by Bernstein Research and the brokerage firm BTIG needs further scrutiny. In light of censorship of Facebook in many countries – including the most populous on the planet – China, where Facebook is banned – and the competition with companies like Vkontakte – I think the long term growth investment potential of Facebook is finite.
On my web site is a link to see which countries Facebook is currently banned in and also countries that have forced censorship or interfered with Facebook.
Censorship of Facebook
Whereas there is short term increase in stock price with the addition of new revenue streams – my biggest concern as I review process today's Facebook stock upgrade is the lack of leadership shown when Facebook went public with their IPO (initial public offering of stock).
Only now is Facebook rolling out clear plans to add additional revenue streams. With my concerns about the lack of leadership exhibited in the past, censorship, and rivals like Vkontakte (mainly CIS countries and Europe), I do not think the long term prospects of Facebook as an investment when I review today's Facebook stock upgrade.
Who launches a company without a clear defined plan as to how to create revenue and revenue growth (shareholder value)? This is exactly what happened with Facebook.
Review: Today's Facebook Stock Upgrade, Censorship, and Vkontakte
Below are some of the quotes made in today's upgrade of Facebook stock – there is no mention of censorship of Facebook or rival Vkontakte inhibiting the long term growth of Facebook.
"Bernstein Research, the most bearish firm on Facebook after the social network went public in May, upgraded the social network this morning to outperform from market perform. The firm said Wall Street may be underestimating Facebook's revenue growth potential over the next 12 to 24 months.
'At this point and for the near-to-medium term, revenue growth trajectory will be the main driver of Facebook's stock performance,' says Carlos Kirjner, senior analyst at Bernstein Research.
He also boosted his price target to $33 from $23, saying the social network may be able to earn more from its mobile advertisements and new businesses, such as Facebook Gifts."
In addition as cited in the article, "Facebook also got a second upgrade this morning from brokerage firm BTIG."
"Despite today's rally, the stock still remains a far cry from its $38 IPO price in May."
To see the Wall Street Journal Article in its entirety, please go to my website and you will find the link to the original Wall Street Journal Article.
Facebook 'Bear' Gets Optimistic; 'More Upside Than Downside,' Bernstein Says
Review: Today's Facebook Stock Upgrade, Censorship, and Vkontakte
While I agree Facebook has immediate upside revenue potential short term and has been beaten down to a level of stock price where it is attractive short term – I am in doubt of the long term prospects of Facebook as an investment. If it gets back to it's $38 IPO price I would personally sell the stock. I do not own any Facebook stock and I have no plans of investing in Facebook. What bothers me most about the company is the lack of leadership exhibited at the time of their IPO (Initial Public Offering) – the leadership of the company has not changed.
In addition, the largest market for Facebook, China, Facebook is currently banned. Vkontakte, which most Westerners have not heard of, has roughly 133 million users. Vkontakte is the social media conduit of choice in most CIS countries including Russia and it is not banned in China.
For those of you who are not familiar with Vkontakte, there is a link to Vkontakte on my web site and some information below.
Information on Vkontakte
Facebook has approximately 901 million users and should be at 1 billion users near term. Having said that – Vkontakte allows for a more robust experience than Facebook – with almost no censorship of content. Users can find and download almost any movie or audio recording – copyright laws are not observed. Most people in CIS countries use Vkontakte not just for social media but to listen to music and watch movies – it is a part of everyday life. In Russia alone Vkontakte users outnumber Facebook users by about 75 to 1.
Without changes in copyright laws and copyright enforcement of Vkontakte – which I do not see happening in CIS countries – Facebook cannot supplant Vkontakte.
Furthermore, I have friends in the Ukraine and for this reason I have a profile on Vkontakte. I can't stand the current advertising on Facebook and I see as I review today's Facebook stock upgrade – it will get worse. I also do not like the switch to "Timeline" from the old profile settings on Facebook. Facebook has become less user friendly. As my Ukranian friends tell me, "Facebook is like planet seven", meaning it is a completely foreign world.
In contrast, I find Vkontakte more user friendly – I use Vkontakte more than Facebook. I enjoy listening to music there and sharing songs, movies, and every day life with my friends in the Ukraine.
With Facebook's lack of leadership, countries where Facebook has been the persecuted with censorship or being outright banned, rivals rivals like Vkontakte who are more user friendly and entrenched in every day life in CIS countries, and the degradation of the whole user experience with Facebook – my review – Facebook's potential is limited as a long term investment.
Short term speculation - Facebook should gain some traction on the addition of new revenue sources. Interestingly enough, Facebook copied the gift feature of Vkontakte – Vkontakte has been offering a way to "gift" friends for a long time.
I would sell Facebook if it gets back to its IPO price of $38 per share.
Go to my web site and make a comment to voice your own opinion. If you want to give your own opinion on Facebook or anything – the best way is to start your own blog.
To start your own blog – go to my web site for more information.
Once on my web site, Click on one of the banners on the right or top of this web page, Watch the video, and Join.
The blog is already set up for you without the added cost of web hosting and domain names. You can also monetize your blog and make money blogging. Watch the video to see how, Join, and Start blogging.
Keywords: Vkontakte, Censorship, Facebook, Facebook Censorship, Facebook Stock, Facebook Stock Upgrade, Review, Review: Today's Facebook Stock Upgrade, Stock Upgrade, Upgrade, Today's Facebook Upgrade, Today's Stock Upgrade, Vkontakte
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