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It's ironic that the bulls look at the same exact statement from Zuckerberg and love what they see. Put simply, they see the next Amazon (AMZN) . They see a company with such a huge growth path that the smartest thing the company can do is to spend as much as possible, thus getting advertisers to spend fortunes trying to reach their targets among the more than 1 billion users of this product.
The bulls are thinking not about earnings this year, which they don't care about in the least, but to the outyears -- say, 2015 -- when the spending will begin to pay off. They are patient, as they had been with Amazon, which became one of the great performers of all time simply because its visionary founder and CEO, Jeff Bezos, never wavered in having a long-term vision. In fact, these bulls would fear for Facebook if it weren't investing. That would have meant the hyper-growth phase is already over, and they would have been stuck with another Intel (INTC) or Microsoft (MSFT) -- played-out stocks that just generate a lot of cash but muster little growth.
Where do I come out? I understand both sides. I get that Facebook's spending could be very meaningful. However, I thought the company would have made more money already. I fear that, as good as mobile is for Facebook, like everyone else, it might not be good enough to offset declines in desktop advertising revenue.
In sum, the bears think the company is being short-term profligate. The bulls think that the company is being long-term greedy.
Me? I think ultimately the bulls have more firepower than the bears, and that the stock can go higher. It's just that it has come up so far, so fast, that the pace will now be labored.
In the end, I think there are a ton of stocks out there that are much better than Facebook, and let's just leave it at that.
At the time of publication, Action Alerts PLUS , which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.