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--- news (7/24/2012)
 
By Matt Nesto | Breakout

After presiding over the worst, big IPO in U.S. history just two months ago, Facebook (FB) is about to get the chance to do something that very few disgraced companies - or individuals - ever get, make a timely redemption.

With the pain and wounds from its botched debut still fresh, the world's biggest social-media platform is about to be in the spotlight once again as it prepares to report its second quarter earnings results after the close on Thursday.

Yes, it's put up or shut up time for Zuckerberg & Co., as my co-host Jeff Macke and I discuss in the attached video. Officially, analysts are looking for Facebook to earn $0.11 a share on $1.16 billion dollars, however our so-called bar is much lower.

"Basic competence is what I think the street is really looking for," Macke contends, "show up, deliver a nice run of the mill quarter with decent guidance. No circus tricks. No theatrics."

Slowing growth of its 900-million person user base will also be the source of discussion, as analysts will assess the loyalty of this massive herd in terms of so-called "daily active users" and "monthly active users," the former of which is where all the action will be. As Macke puts it, "I wanna see a lot of people using it, day after day."

Another thing investors will want to see, and hear, is how Facebook is investing for its future, and what is being done to hasten the migration to mobile. Following its $16 billion IPO, the company is clearly flush with cash - and shares - and has even been rumored to be eying fallen angel Nokia (NOK) in order to build the FacePhone, and better compete against Google (GOOG) and Apple (AAPL).

As for the stock itself, while it has firmed up a bit since plunging to $25.52 in early June, it has never come close to regaining its IPO price of $38, let alone its opening day high of $45. While investors clearly rushed in at $25, they also rushed out at $33 and have taken the stock down 13% over the past month, at a time when the S&P 500 slid only 1%.

While long-term hopes and expectations are still high, analysts see the stock getting back to par again, with a median price target of $37.85. As for whether you should buy the stock or not, they're more split. FactSet data shows 47% of 38 analysts who cover the stock currently rate it a buy, with 45% at hold and 8% at sell.

There's one other thing to keep in mind too. Just 3 weeks after their earnings results, Facebook's 90-day lock-up period, which has prohibited the sale of restricted and insider stock since the IPO, ends on August 16th. It's an event that would certainly challenge any good news or momentum the stock was able to deliver in the short-term.

What do you think? Is Facebook a deal or a dog and what metric is the best measure of its success?

 
 
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