Facebook Frenzy Continues: Tech Weekly

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NEW YORK (TheStreet) -- The Facebook frenzy continued this week, as the social networking giant caused yet more commotion ahead of its IPO later this month.

With the Facebook IPO imminent, Wall Street analysts are flocking to rate the social networking phenomenon.

Several analysts, including Wedbush's Michael Pachter, put ratings on Facebook, noting that the company holds tremendous amounts of data that it could turn into major revenue. One analyst went so far as to say Facebook could have as much as 65% upside.

Sterne Agee analyst Arvind Bhatia noted that advertising is a $600 billion market, and Facebook is playing the role of disruptor thanks to its 900 million users. Other factors include Facebook's ability to monetize mobile, its placement in China and the company's potential to grow average revenue per user.


Facebook started its IPO roadshow this week, kicking off in New York City, then heading up to Boston. CEO Mark Zuckerberg, COO Sheryl Sandberg and CFO David Ebersman attended the New York event, while Sandberg and Ebersman represented the company in Boston.

Facebook is expected to price its IPO on Thursday after the close of trading and will start trading Friday morning on the Nasdaq under the ticker symbol "FB," pending Securities and Exchange approval.


Apple was in the news this week (but then again, when isn't it?) amid chatter about potential carrier subsidy cuts.

Rumors of a 7-inch iPad, a lower-priced MacBook Air, and a T-Mobile iPhone were also part of the news flow this week.

Steve Jobs as a Ghostbuster and new maps added to iOS 6 were additional nuggets for Apple investors to chew on.

Shares of Apple gained 0.3% this week to close at $566.71.

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It was a busy, albeit mostly negative, week for Yahoo! , as the controversy over CEO Scott Thompson's credentials turned ugly.

On Monday, Third Point's Dan Loeb sued Yahoo!, requesting information regarding the Thompson hiring process.

Yahoo! responded on Tuesday, announcing that it has formed a committee and hired legal counsel to look into Thompson's academic background. Yahoo! also announced that director Patti Hart, who led the search committee to find Thompson, will not stand for re-election to the board.

That prompted activist investor Loeb to respond on Wednesday, releasing a letter calling for Thompson to be fired following the disclosure that his educational background was not what it seemed. "It appears very clear to us -- and to many corporate governance experts, Yahoo employees, and fellow Yahoo shareholders -- that Mr. Thompson's fantasy degree was in no way an 'inadvertent error,'" Loeb wrote in the letter. "The evidence shows he had been using false credentials for years. Mr. Thompson's 'apology' was clearly insufficient and it seems that the only thing he actually regrets is that he has been caught in a lie and publicly exposed."

On Thursday, Thompson said he never provided a résumé to Yahoo! he got the CEO's job.

Shares of Yahoo! ended the week 0.3% higher at $15.19.


Cisco reported solid third-quarter earnings on Wednesday, but guidance spooked investors, sending shares sharply lower.

Fourth-quarter guidance weighed heavily on the company's stock, as CEO John Chambers cited Europe, the public sector and India as areas of concern. Cisco now expects fourth-quarter revenue growth of 2% to 5% year over year, below Wall Street's projection of 7%.

The switch maker brought in earnings of 48 cents a share on revenue of $11.59 billion. Analysts surveyed by Thomson Reuters expected 47 cents a share on sales of $11.58 billion.

TheStreet interviewed Cisco CFO Frank Calderoni, and he reiterated the cautious guidance given by Chambers on the company's conference call.

Calderoni pointed to Cisco's 7% revenue growth for the first three quarters of fiscal 2012, which was at the high end of its target of 5% to 7%. He also said Cisco grew its profit 14% during the first three quarters, well above its projection of 7% to 9%.

"Things are working well from a customer perspective across the major segments," Calderoni said in the interview. "We're executing on everything that we have been talking to investors about for the last several quarters."

Shares of Cisco plunged 13.7% this week to $16.50.


Online travel company Priceline.com reported better-than-expected earnings on Wednesday, but guidance fell short of forecasts.

Second-quarter earnings guidance was weaker than forecast. The company expects non-GAAP earnings of $7.20 to $7.40 a share, with the median range lower than Wall Street's current consensus view of $7.37 a share.

The Norwalk, Conn.-based company posted first-quarter non-GAAP earnings of $4.28 a share on revenue of $1.037 billion. The average estimate of analysts polled by Thomson Reuters was for earnings of $3.95 a share on revenue of $1.043 billion.

Shares of Priceline fell 8.2% during the week to $675.39.


Rackspace reported weaker-than-expected earnings on Monday, as costs rose and foreign currency affected first-quarter revenue.

The cloud computing-hosting company reported earnings of 17 cents a share on $301 million in revenue. Wall Street analysts polled by Thomson Reuters were looking for earnings of 18 cents a share on $300.53 million in revenue. Rackspace said its total server count increased to 82,438, up from 79,805 in the prior quarter and total customers climbed to 180,866.

Shares plunged 10.3% this week to $52.36.


Next week brings earnings from Salesforce.com , Intuit and Applied Materials . Of course, the big event will be the Facebook IPO.

That's certainly something which may receive a few "likes" and comments.

Enjoy the weekend everyone.

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-- Written by Chris Ciaccia in New York

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