Based on the chart and two models -- ARIMA(5,2,1) and Monte Carlo using the last 250 days of trading -- FB is projected to reach 185 in the next 17 days with a return volatility of 9. The chart also indicates a strong trend which also targets 187 by Feb 16th.
From a fundamental perspective, the recent drop in FB due to Zuckerberg's recent announcement of a potential restructuring is highly unfounded. The income statements and balance sheet of the company are both very healthy. Although FB has seen a slowing new user growth rate, their ability to optimize the business model, mainly based in advertising, is having a positive impact on their revenue stream which is growing at a faster rate every year.
Conclusion -- strong trend + strong fundamentals + and a recent unfounded drop based on Zuckerberg's tweet = opportunity.
From a fundamental perspective, the recent drop in FB due to Zuckerberg's recent announcement of a potential restructuring is highly unfounded. The income statements and balance sheet of the company are both very healthy. Although FB has seen a slowing new user growth rate, their ability to optimize the business model, mainly based in advertising, is having a positive impact on their revenue stream which is growing at a faster rate every year.
Conclusion -- strong trend + strong fundamentals + and a recent unfounded drop based on Zuckerberg's tweet = opportunity.
Trade closed: target reached:
Closed both 180 and 185 Calls at 192-195 post earnings.
Result:
-> 180 Feb 16th Call, purchased @ $5.53, sold @ $15.00, 166% return
-> 185 Feb 16th Call, purchased @ 5.22, sold @ $8.50, return 63%
Result:
-> 180 Feb 16th Call, purchased @ $5.53, sold @ $15.00, 166% return
-> 185 Feb 16th Call, purchased @ 5.22, sold @ $8.50, return 63%