Why did George Soros buy Facebook stocks?

George Soros buys 341.000 Facebook Shares

As you might have heard George Soros, the Hungarian – American investor known for his 1 billion $ profit in the 1992 “Black Wednesday UK Crisis”, is reported to have sold his stakes in financial companies such as Citigroup, JP Morgan, Goldman Sachs and Wells Fargo, and bought 341 000 Facebook Shares.

Why would Soros buy Facebook stocks?

The decision to buy Facebook stocks that have been steadily falling since the IPO  is at least intriguing as the share price dropped 45% since the 18th of May 2012, the day when Facebook went public. Even more intriguing is Soros’ decision to sell his financial companies shares over Facebook.

Let’s look at the chart and then a quick set of facts:

Is this the end of Facebook stocks nightmare?

As you can see the drop in shares price seems to have leveled out. I suppose that might be the lowest point Facebook will see in a long time. After all the company is doing great in terms of users and revenue (next to 1 billion users, Q1 2012 revenue up 45% from Q1 2011).

LATER UPDATE: Facebook unlocked its inside investors shares and the share price dropped 6% and than bounced back to ~$20 per share.

What does George Soros know that we don’t?

George Soros is known as a very informed investor. He knows when to sell and when to buy. He also sold his minor stakes in Intel and Dell.

I can only assume that George Soros bets on one of the following:

  1. A large partnership Facebook is about to join. Last week I’ve noticed some Apple-Facebook motion and discussed the possible implications. Such a move will have positive implications on Facebook’s stocks.
  2. Facebook stocks will begin to rise as the company will provide the market with evidence of its increase in revenues, in the future.
  3. George Soros’ is attempting to trick the market into increasing demand for Facebook stocks. His actions can be enough to increase the Facebook stock price.

I believe that by the end of the year Facebook stocks will see a positive trend and pass a 25$ /share price. After all Facebook is a very valuable company and will continue to be so in the future.

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4 thoughts on “Why did George Soros buy Facebook stocks?

  1. Pingback: Facebook money is not real money. Yet. « Netonomy.net

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