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Originally Posted by EvosM3
FB has stolen lots of AAPL's thunder, IMO, and when investors realize that AAPL is such a better thing to have in their portfolio they will dump FB and get back into apple, once again setting it's price trajectory forward. The Jan $705 calls I bought on April 25 are down a good 50%, you can pick up some if you're ballsy.
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Holy sh*t $705 calls?? Definitely need the balls to play that one... You're going to need the reincarnation of a deity descending down from the skies before we see AAPL carry the market like Atlas again.... That's adding another third to the largest market capitalization out there... no small feat.
And I'm not so sure it's FB stealing AAPL's thunder away. Maybe $5-10 dollars on the AAPL stock decline can be money going into FB, but for the majority of the $100 dollar decline in that stock, the descent occurred long before FB came out. You have to ask yourself, if your theory is that AAPL money went into FB stock (causing AAPL stock to decline so much), then how come underwriters had to back-stop FB with $1-2 Billion dollars on Day 1 of it's IPO? That kind of money leaving AAPL, if it were true it was going into FB, would have absolutely skyrocketed FB's IPO, whose entire company is only 1/5th the value of AAPL (equal to all of AAPL's decline thus far). In short, I don't think FB has anything to do with AAPL's decline. The money leaving AAPL is clearly not going into FB stock (that's for the muppets to have at). Instead, that money is probably leaving into US treasury yields right now as we've just broken a 10 year channel (quite significant).
Either the market right now has over-extended itself and US treasury yields need to come back down, and money needs to re-enter equities, or this is the market telling us that the 10 year break in treasuries is the first sign of a behemoth charging towards us. Monday's trading will be very crucial to direction. If the markets pop 200+ points on Monday, I will immediately liquidate my shorts as I believe that might signal an oversold rally in stocks. But we shall see how it "feels" on Monday.
P.S. Guys, do your research on FB if you are going to invest in it. The valuation on that thing is ridiculous. $100 Billion dollar valuation for FB is equivalent to McDonalds. Lets just look at the basics here. McDonalds generates a SOLID 20% profit for every customer that enters the restaurant franchise worldwide (a customer base much larger than FB's 800 Million users). Does FB even make close to a 20% profit on us when we use the site? I never click any advertisements. In fact, the advertisement fees on accessing FB users is much higher than normal internet advertisement fees. Let's say the access fee is 37 cents USD for every user (if I recall correctly). Do you honestly think 37 Cents USD can be charged to access all 800 million users that FB has all over the world? No. Because 37 cents USD in North America and Europe is not the same 37 cents USD to advertise in other places around the world.
Considering that FB's future depends on accessing markets like India, 37 Cents USD to access every Indian FB user is a price too steep to pay for marketers there. There are MUCH cheaper ways. Wherever McDonald's expands globally, it will be able to off-set costs and still maintain that 20% profit margin. However, FB's global growth model cannot extract a standardized advertisement fee, hence, why I don't own FB stock. Btw, FB also lowered it's guidance during it's IPO roadshow. That probably means there's been some huge earnings deterioration from then till now. You have been warned.