I use facebook but hate it.

I've been following FB and decided to throw up some analysis for you guys. Basically, the 1 day moving average is trending down and it has closed below its 2 day moving average for the first time in, ever, and the RSI(2) has fallen below 50 and Macd(1,2,1) has fallen below 0. So, it's obviously oversold and I am expecting a nice pop here, and using the fib projection tool, the 610,000% fib line is showing a future closing price in the neighborhood of $24,217. Take a look at my chart, I'd be happy to answer any questions.

Wow, Facebook now trading 30% off its Friday highs.

Mike

Morgan Stanley Cut Facebook Estimates Just Before IPO

In the run-up to Facebook's [FB 31.8898 -2.1402 (-6.29%) ] $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company.

The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast.

They say it may have contributed to the weak performance of Facebook shares, which sank on Monday — their second day of trading — to end 10 percent below the IPO price. The $38 per share IPO price valued Facebook at $104 billion.

The change in Morgan Stanley's [MS 13.555 0.365 (+2.77%) ] estimates came on the heels of Facebook's filing of an amended prospectus with the U.S. Securities and Exchange Commission [cnbc explains] , in which the company expressed caution about revenue growth due to a rapid shift by users to mobile devices. Mobile advertising to date is less lucrative than advertising on a desktop.

"This was done during the roadshow — I've never seen that before in 10 years," said a source at a mutual fund firm who was among those called by Morgan Stanley.

JPMorgan Chase [JPM 33.857 1.347 (+4.14%) ] and Goldman Sachs Group, which were also major underwriters on the IPO, but had lesser roles than Morgan Stanley, also revised their estimates in response to Facebook's May 9 SEC filing, according to sources familiar with the situation.

Morgan Stanley declined to comment and Devitt did not return a phone message seeking comment. JPMorgan and Goldman [GS 99.06 2.55 (+2.64%) ] both declined to comment.

Typically, the underwriter of an IPO wants to paint as positive a picture as possible for prospective investors. Investment bank analysts, on the other hand, are required to operate independently of the bankers and salesmen who are marketing stocks — that was stipulated in a settlement by major banks with regulators following a scandal over tainted stock research during the dotcom boom.

The people familiar with the revised Morgan Stanley projections said Devitt cut his revenue estimate for the current second quarter significantly, and also cut his full-year 2012 revenue forecast. Devitt's precise estimates could not be immediately verified.

"That deceleration freaked a lot of people out," said one of the investors.

Scott Sweet, senior managing partner at the research firm IPO Boutique, said he was also aware of the reduced estimates.

"They definitely lowered their numbers and there was some concern about that," he said. "My biggest hedge fund client told me they lowered their numbers right around mid-roadshow."

That client, he said, still bought the issue but "flipped his IPO allocation and went short on the first day."

'Very Unusual'

Sweet said analysts at firms that are not underwriting IPOs often change forecasts at such times. However, he said it is unusual for analysts at lead underwriters to make such changes so close to the IPO.

"That would be very, very unusual for a book runner to do that," he said.

The lower revenue projection came shortly before the IPO was priced at $38 a share, the high end of an already upwardly revised projected range of $34 to $38, and before Facebook increased the number of shares being sold by 25 percent.

The much-anticipated IPO has performed far below expectations, with the shares barely staying above the $38 offer price on their Friday debut and then plunging on Monday.

Companies do not make their own financial forecasts prior to an IPO, and underwriters are generally barred from issuing recommendations on the stock until 40 days after it begins trading. Analysts often rely on guidance from the company in building their forecasts, but companies doing IPOs are not permitted to give out material information that is not available to all investors.

Institutions and major clients generally enjoy quick access to investment bank research, while retail clients in many cases only get it later. It is unclear whether Morgan Stanley only told its top clients about the revised view or spread the word more broadly. The firm declined to comment when asked who was told about the research.

"It's very rare to cut forecasts in the middle of the IPO process," said an official with a hedge fund firm who received a call from Morgan Stanley about the revision.

That is still like 100 times earnings isn't it?

That is still like 100 times earnings isn't it?

Okay, here is a view on this FB bologna. 2,140,000,000 shares earn $.31 each? Are the FB earnings about $663,400,000? Does FB have about 900,000,000 users? If those numbers are even close we see that FB earns about $.74 per user.

So if they had a tangible product that everyone loved...say lemonade they might be onto something. BUT to trade at a reasonable multiple...say the same as goog (18.57 times) they need roughly 4.5 Billion users at 31 cents per....or they need to earn about $1.55 per share at current efficiency that is $3.70 per each of the 900,000,000. If that does not seem like much, lets go back to lemonade.

My children make more than $.75 per user at their lemonade stand.

So, send my kids your money, we will offer 100 shares and we will beat FB from my driveway working 12 hrs per week...and if the kids add ice water and cookies to their product line...look out, we will do a non dilutive secondary by 4th of July.

I think the selling group must have been passing the hookah instead of doing their HW on this. The only people to make money here is the UW group the selling group and insider sales into the public offering...Rock star Bono for example banked 1.5 B on this deal.

When the clue phone is ringing, pick up the call folks.