2 Reasons Why Facebook Stock Is A Must Buy


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By Steven Morrison II

We all watched as Facebook (FB) stock took a serious dive after an impressive – and over-documented – IPO. At first, the media reported with awe as Facebook made a whole bunch of new billionaires and millionaires, and then later mocked with glee as the price fell to trench-like depths.

Guess what? Over the past four months, Facebook’s stock price has slowly but surely risen back toward respectability and beyond. The stock basically stayed between $28 and $29 through most of December and into the new year, roughly 75% of its IPO sale price of $38 per share.

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It really seems like a new bottom has been established and now the sky’s the limit. And I say that sky is $38. This imaginary wall will stop investors dead in their tracks fearful of overextending themselves past the IPO price (which was thought of as super-inflated), so buy now, sell at $38.

Get in, get out.

Smiles Everyone, Smiles

This new era of positivity comes amid exciting new Facebook features, such as the fantastic fresh social job application that is giving LinkedIn cause for concern. Facebook is also famously tooling and testing various ways to make money (finally), including trying out various display ad models and selling the ability for Facebook users to cast a wider net when sending out a message.

Great.

But these innovations, while a step in the right direction, aren’t white hot enough to generate the kind of heat that is coming off of Facebook right now. Here are two solid reasons why you should buy Facebook:

Reason #1

As Seeking Alpha reported, notable hedge fund managers have been stocking up on Facebook shares. This means that the most investment savvy among us are staking a portion of their personal portfolio on Facebook stock rising, rising, rising.

This is the kind of market movement you pay attention to.

Reason #2

Do you want to know why Facebook shares went for $38 during the IPO? Because that’s what they are worth. The stock is currently undervalued.

Facebook has the unique ability to reach somewhere in the neighborhood of one billion people with the push of a button. Tell me that kind of power isn’t worth $38 a share.

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