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Barron's Pushes Facebook (NASDAQ:FB) Under $21, So Where Do We Go From Here?

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Barron's says Facebook is worth $15. Are they insane?

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MINYANVILLE ORIGINAL The party's over for Facebook (NASDAQ:FB) -- at least according to Barron's.

This weekend, writer Andrew Bary declared Facebook to be worth $15 a share, throwing a freezing bucket of water on the bull camp that was reinvigorated by CEO Mark Zuckerberg's September 11 appearance at the TechCrunch Disrupt conference, at which he gave a sunny outlook on the company's mobile advertising business. (See: Wait a Minute! Did Facebook's Mark Zuckerberg Really Say Anything New?)

A purely anecdotal look at the Twit-O-Sphere indicates that some folks are rolling their eyes at the Barron's story, viewing it as a rehash of old news and thus a reason to jump into the stock.

Now, I've knocked Barron's many times in the past for what I viewed as incorrectly bearish articles on particular stocks. Nonetheless, they deserve props for correctly slamming the Facebook IPO back in May.

But we're many, many dollars away from Facebook's failed $38-per-share IPO.

Let's take a look at Barron's big bad bear case.

Here are the main points:

1. The stock is dramatically overvalued relative to Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG).
2. Wall Street's earnings estimates do not reflect stock-based compensation, which overstates profitability.
3. Due to heavy infrastructure spending, consensus 2015 estimates of about $1.05 per share may not be achievable.
4. Last week, research firm eMarketer cut its estimates of Facebook's revenue.
5. Mobile ads, including Sponsored Stories, may be screwing up the user experience.
6. The app model favors more specialized sites like Twitter, Pinterest, LinkedIn (Nasdaq:LNKD), Yelp (Nasdaq:YELP), and Trulia (Nasdaq:TRLA)
7. Lock-up expirations could weigh on the stock.

We can argue some details here and there. Are Apple and Google really appropriate points of comparison? And isn't it a little soon to worry about 2015 estimates?
Position in AAPL
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