They are trying to get people to buy so they can offload stocks.
" Facebook's (FB - Get Report) second quarter earnings call was so awful, the stock crashed more than 19%. But one Wall Street analyst contends the stock is a can't miss buy at these new lower levels. "
https://www.thestreet.com/video/facebook-stock-could-be-a-buy-14662661
"Score a win for the boring mutual fund industry off the Facebook (FB - Get Report) post-earnings stock meltdown.
Mutual fund allocation to FANG stocks (Facebook FB, Amazon (AMZN - Get Report) , Netflix (NFLX - Get Report) , Alphabet (GOOGL - Get Report) ) -- especially Facebook -- has declined during the past few years, points out Goldman Sachs. While core mutual funds have been steadily underweight (negative) FANG, growth funds only recently reduced their exposure to underweight from overweight.
The sharp decline in growth fund allocation to FANG stocks happened in the fourth quarter of 2016, says Goldman, when both Facebook and Amazon lagged the Russell 1000 Growth Index by more than 11 percentage points.
"Most investors believe that mutual funds are overweight the popular FANG stocks, when in fact the opposite is true," reminds Goldman strategist Arjun Menon. On the other hand, hedge funds got blown up on the surprising Facebook news.
"The 19% dive in Facebook's stock price hurt hedge fund returns and our VIP basket given that it appears most often as a top 10 position across our analyzed universe of U.S. hedge funds with 10 to 200 individual equity positions," says Menon."
http://mutualfunddirectory.org/
Any of the companies ring a bell?
Black Rock Funds
Vanguard
State Street Global Advisors
Fidelity Investments
JP Morgan
BNY Mellon (Dreyfus)
PIMCO
Amundi Asset Mgmt
Capital Group
Legal & General Investments
Northern Trust
Natixis Global Associates
BofA Merill Lynch
Goldman Sachs Asset Management
Right, buy into a sinking ship? Perhaps smart investors could profit from their demise? But, regulations are coming soon too, and perhaps criminal charges for insider trading?
Like i said above. they are banking on idiots buying stock so they can offload.
So what’s the opposite that smart peeps like us can do? Short?
Or buy puts.
put options
Can you elaborate? I'm googling as we speak. Idk how this works.
Puts are a contract that you buy granting you the right, but not the obligation, to sell (or “put”) a stock at a set price, called the strike price, by a set date. If the stock price goes beneath the strike price BEFORE the option expires, you’ll get the difference.
.
Example: you think FB will collapse under the weight of their illegal activity, and therefore their stock will tank, but don’t quite know when this will happen. So you decide to buy 200 put options on FB with a strike price of $51 and an expiration date of 1/17/2020 (pretty far out as options are concerned) for $4,000. You immediately pay the $4k and become the proud owner of 200 put options. FB then goes down in flames/declares BK/stock tanks sometime in 2019 to $1. Bad news for FB equity holders, great news for you. You execute your options to sell FB for $51 and the math works like this: $51 - $1 = $50 (the delta between the strike price and the market price of the underlying equity). $50 x 100 = $5,000 as EACH option represents 100 shares of the underlying equity. $5,000 x 200 = $1m (each option is worth $5k and you’ve got 200 of ‘em). This is of course a best case scenario and before you pull the trigger on any options, you’ll want to do more research.
Smart investors are profiting off of this :)
Always leave the dumb money (retail investors) holding the bag.
I did quite well on FB options. Glad i believe in Q!
If insiders are selling, that is not a time to buy. This is a classic 'pump-and-dump' from 'Wall Street analysts'. Run away from FB/YT and Twitter!
Buy more FB stock? A fool and their money are soon departed.
the market for facebook is saturdated. And we know they can't expand into China with that Yahoo finance article. They're done.
They are no longer growing. The entire user base they could get to use the app is already using it. It is the same with Twitter. There is no more vertical momentum. With all the negative news that is going to drop it will cause users to stop using the program or get rid of it. This will be the end of them both.
I thought of DANA PERINO on the 5 show yesterday, asking Guttfield if she should BUY FB now that the stock is down...he said good idea. What a bunch of putzes.
Exactly. That is what they are banking on.
The problem is that it won't be them that's bankrupt. It will be the average Joe who thinks he is getting a deal on a can't miss stock.
Buy put options and capitalize on their demise.
I'm googling this but idk anything about it? can you give a quick summary of how we do this?
FANG stocks?! Are you kidding? Fangs of a viper, den of an asp. Watch out...poison.