Facebook Bear Case Scenario WhatsApp $FB, $TWTR, $GOOG, $LNKD, $YHOO

Facebook (Nasdaq:FB) just swallowed up WhatsApp for huge valuations. While no one questions the wisdom of making the acquisition it begs the question about core Facebook offerings. Are they really showing the promise that everyone was banking on?

The hype will now be focused on the value of WhatsApp and how to exploit it. Facebook had some serious challenges in front of it to move the legacy Facebook operations forward. Just look at the PE ratio. Calculate on this years earnings or step out and calculate on forward earnings. The PE is still crazy high. When will operations deliver on the promise of future earnings?

By changing the mix of operations have they invalidated the former investment proposition.

George Gutowski writes from a caveat emptor perspective.

Facebook Insanity Continues $FB Younger Users are Getting Bored.

Facebook (Nasdaq:FB) is getting some buzz or press that younger users are fatiguing and not using the service as much. Not sure if these younger users had enough money to satisfy advertisers. So maybe that’s a good thing.

In the meantime investors need to look at a 115 PE ratio. so when you read an analysts buy recommendation underline the part that says it’s a good idea to buy a 115 PE ratio.

George Gutowski writes from a caveat emptor perspective.

Reasons for Facebooks Painful Demise $FB $TWIT $GOOG $YHOO $LNKD

Sterne Agee analyst Arvind Bhatia said “We think Instagram ads could ultimately command a premium to Facebook ads, although that will likely take a while,” Facebook (Nasdaq:FB) is approaching the tipping point of credibility. They have to show enormous sustainable growth and cash flow to justify a valuation north of $50.

The Sterne Agee comment is typical of Wall Street psycho-babble. OK Instagram will show some growth. But if it is a premium to Facebook, the value proposition should be clear immediately if not sooner. When you buy groceries Filet Mignon is more expensive than stewing beef. There are no arguments.

Arvind Bhatia, (if the quote from Investors Business Daily is believable) in a back-handed way is denigrating Facebook main offering. So what should the Sterne Agee clients do with Facebook?

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Facebook Shoots It’s Foot Off. Probably will sell you the picture. $FB #instagram

Image representing Facebook as depicted in Cru...

Image via CrunchBase

So Facebook (Nasdaq:FB) will now be selling your pictures without notice or compensation. Apparently you cannot opt out. I hope Facebook has set aside some money for lawsuits.

Facebook is proving itself to be the biggest financial honey trap since the Borgia Cardinals and Popes ran the Vatican. Here is how the rebellion will come about. Lawsuits. The litigation and tort community is just salivating at the teeth. Lawsuit after lawsuit will pile up. Vexing Facebook which has yet to prove itself profitable.

The lawsuits will damage the brand as users become enraged and abandon. Corporations who may be using imagery will suddenly face the prospect of losing control. Not happy. I`m personally waiting for the misuse of Mark Zuckerberg photo`s. Someone will come up with something devious. you just know they will.

In the meantime if you posted some family photo`s. Mark and the boys can make a few bucks from it. Globally you just know there will be jurisdictions that will not allow it.

Win, lose or draw this will be a tar baby for Facebook.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or his evil twin brother who writes Wall Street Murder Thrillers at twitter@georgegutowski