Published On: Wed, Oct 29th, 2014

Facebook Devastated on Earnings, Is the Stock a Buy?


While many projected high hopes for Facebook going into earnings, it seemed that the high apple pie in the sky hopes was what hurt Facebook the most. Although its numbers were fair, management said the company would have to increase spending by 70% in 2015. The shares were slaughtered, and declined by nearly 10% by the days end.

Jon Najarian of CNBC thinks Facebook is a buy on its current selloff, because Facebook is an “advertising juggernaut.” Why is Facebook spending more? Because it is making more. Ad revenues were up 64%. Mobile now is 70% of its revenue, which is a 122%  rise year over year. Facebook is making its ads more valuable by having fewer of them. They have 56% fewer ads, but the price per ad rose 274% year over year. Daily active users rose 39%.

So if a company is making money, it has a right to spend, doesn’t it? Najarian is a buyer of the stock.

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