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Tuesday, October 28, 2014

$fb blah reaction to a good quarter

Surprised to see the lack of positive reaction.

Worst case scenario, bullishness is baked into the current premium of the stock. (Google saw about a 4 year consolidation when that took place.)

Interesting facts:

1. The last 4 quarters FB has seen +80% gross margins. (Should be Twitter's new margin bar.)

2. Facebook is a $200B market cap company that should do about $16-17B in revenue in 2015. (If it's started to consolidate, Google's price to sales is about 5. FB is at 20. But it may deserve a few point premium as FB is handely beating Google's Gross Margins.)

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