Today, I traded FB based on their earnings announcement last night. Overall, their earnings announcement was great. They beat consensus, increased guidance, and told us that their active users increased 25% last quarter. All very good news! As a result, FB was up as much as 15% after hours last night. However during the conference call, they told us that they are slowly losing young teenage users. As a result, the 15% gains were erased and the stock opened down 5% this morning.
After mulling over all the earnings info, I bought a large position in FB this morning at $47.4. Overall, I’m bullish FB and think their “bad news” from yesterday’s call was insignificant. In my opinion, it’s easier to regain a few % of 13-17 year olds than increase use among active users. Therefore I weighted their good news more than their bad news, and so far, my assumption turned out to be correct.
Currently at the time of writing this, FB is up to $51.3.