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.