) briefly rose in the premarket on Monday, before dropping in
This move comes on the eve of a special meeting the social
media giant will hold which has drawn widespread speculation in
the market and media, as well as mixed reactions from the
It remains unclear what Facebook's meeting will involve. Some,
such as Benzinga's Louis Bedigian
, believe it could involve a new Facebook phone or a stronger
push into gaming. It could also be an announcement of plans to
enter the automobile tech world, or something widely
Another possibility is new search technology. According to
Deutsche Bank, the company could unveil such a technology to help
users navigate the Facebook website more quickly.
Ultimately, it all remains speculation. It could be a new
phone that will blow Apple (NASDAQ:
) and Google (NASDAQ:
) off the map, or perhaps the company has decided to paint its
bathrooms light green instead of turquoise. As such, investors
should be cautious before going "all in" just yet.
Meanwhile, Deutsche Bank has upgraded the stock from "Hold" to
"Buy." The market research firm expects Facebook's success in
generating newsfeed revenue ($200 million in 3Q 2012) to
accelerate in 2013. Deutsche Bank believes the company could
generate over $800 million per quarter from newsfeed revenue
alone this year.
Deutsche Bank also believes Facebook's new video and other ad
products could be meaningful drivers for the company. Other
potential hits include the search and mobile social application
layer initiatives Facebook has for 2013.
Despite the upgrade and speculation on tomorrow's event,
Facebook's stock has been shaky as the week opens. After rising
around 1.5 percent in premarket trading, shares reversed and were
down about 3 percent Monday morning.
Although its performance has been rocky since its IPO,
Facebook has been on an upswing in the market since early
January. On a broader level, the stock has gained over 18 percent
in the past month and performed well since mid-November.
Yet, the sudden drop today may indicate a lack of investor
confidence in tomorrow's announcement. Perhaps investors believe
it's more hype than anything else and are dumping the stock
Given the stock's overall performance since its lackluster
IPO, shareholders should keep a close eye on tomorrow's events
and as the company moves forward.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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