Would the Henry Blodget Who Used to Work at Merrill Lynch Say Buy Facebook?

Aug 2, 2012
J. Webster
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The new Henry Blodget, who runs the Business Insider and shows up on CNBC from time to time, is very calm and rational, there’s no pumping up stocks just because Merrill Lynch wants to do business with these companies. Ten to twelves years have gone by, it’s a new day on Wall Street, and everyone deserves a second chance and Henry seems like a good guy.

Back in 2000 though, during the tech bubble, when Blodget worked for Merrill Lynch, he gave conflicting ratings of stocks, publicly he touted Internet stocks as buys, privately though, he berated them. I’m guessing he’s say buy, buy, buy, Facebook’s going to $100 a share.

Recently he appeared on CNBC’s Fast Money to give his opinion of Facebook. There was no hype this time. It’s sort of like he bunted, like he didn’t want to stir the waters. I wonder what he really thinks about Facebook?

“At $20 the stock is reasonably priced with expectations of earnings of 65 cents a share.”

However, just because the stock is reasonably priced doesn’t mean it’s a buy.

Blodget believes the catalyst will be a turn in fundamentals. “Right now margins are going down and sales are decelerating,” he says. Only when that turns, can shares march higher.

And even when it does happen, don’t expect Facebook to turn into a mojo stock. Blodget says that’s not happening. (CNBC)

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