May 21, 2012

Is the Facebook Bubble About to Burst?

Soreide Law Group is currently investigating claims against brokers who have over concentrated their clients into Facebook stock.

Amazingly, Facebook's p/e (Price to Earnings) ratio is 105 to 1.  Consider for a moment that a fairly valued stock is normally around 15 to 1.  Apple, for example, is 13 to 1, Microsoft is 11 to 1, Hewlett-Packard 7.7 to 1. 

Some big investors are selling off earlier than expected, uncomfortable about the Facebook bubble about to burst.

Facebook is unconventional.  It makes its money from advertising, not users.  The users don't have to buy anything to use the product.  They can just basically 'hang out' on Facebook all day, and not pay a thing. Allegedly, advertisers are getting disillusioned. GM recently discontinued much of its Facebook advertising allegedly because of its lack of effectiveness.

The day Facebook went public they were sued by users for $15 billion allegedly for invasion of privacy for tracking their online usage, even after they logged off of Facebook.  How will this affect the company?

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations in Facebook stock, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at:  https://www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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