They have over a billion users. Growth tends to slow once you've approached 20% of the entire human population.
But to answer your question: The stock was undervalued in June.
FWIW, I bought FB stock at $28 and recently sold once I doubled my money. I sold because I think FB has found its value and I don't personally think it will see much growth. This $50-60 range feels right to me. So I took profit.
But still, Facebook is priced for growth. Which is problematic for a company that's starting to see its userbase decline.
That, and it's easy to look good playing tech stocks in a year when the NASDAQ goes up by 34%. In another few years, I'm not so certain that a P/E of 140 for a company that seems to have hit its plateau will still look like such a fair valuation.
I get it, you're bearish on FB. But your comments suggest that you think the stock market should work like an algorithm. You input growth and users and past stock price and out comes the perfect number. Momentum investing isn't anymore BS than value investing. You act like there needs to be some verifiable reason FB is worth "over 200% more" than it was 6 months ago. Well, there is: There's a lot more people today that have faith in Facebook's ability to grow and create wealth than there was 6 months ago.
Like I mentioned elsewhere, I sold FB. I'm not a true believer who thinks this will be the first $1 Trillion company. But I think objectively, you're bearish on FB and I think it clouds your judgment.
This is a company with a reputation for high quality engineering. They have 20% of humanity as users. It's grown to staggering proportions. I'm reminded of the people who called it a house of cards when it hit 100 Million. And it's grown from that insanely amazing number by a magnitude.
Over the last 4 quarters, Facebook has increased revenue and profit by nearly 30%. Net income? Up over 600%. It made a billion dollars in 2013 and should double that in 2014.
I'm not trying to sell you. I'm just suggesting that possibly you are letting preconceptions cloud your judgment. It's growing slower? It has some issues with teenagers? Facebook's history gives me no reason to believe their future growth depends on hooking users at a young age. I'm not sure how you reach that conclusion.
Anyway, feel free to have the last word, I'm not one for internet debates.
But to answer your question: The stock was undervalued in June.
FWIW, I bought FB stock at $28 and recently sold once I doubled my money. I sold because I think FB has found its value and I don't personally think it will see much growth. This $50-60 range feels right to me. So I took profit.