Why Facebook Inc (FB) Will Need More Than New Emojis to Top $100

Facebook Inc (FB) has garnered attention from option bears, as it struggles to break into triple-digit territory

Oct 9, 2015 at 10:54 AM
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The moment we've all been waiting for has arrived: Facebook Inc (NASDAQ:FB) is officially adding new emoji buttons, allowing users to express a wider range of emotions to posts. Beta testing of "Facebook Reaction" is already under way in Ireland and Spain, with plans to roll it out gradually. Shares of the social network are barely budging on the news, up just 0.3% at $92.76.

More recently, FB has been trending lower. The stock hit a record high of $99.24 in late July -- petering out just below the round-number $100 level, and losing 6.5% since. Going forward, the equity's rebound attempts could be stymied by heavy accumulations of open interest at the October 95 and 100 calls, home to roughly 82,000 and 28,100 contracts, respectively.

As a whole, though, the options crowd has been growing skeptical toward FB. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has accumulated a 10-day put/call volume ratio of 0.54 -- higher than all but 15% of readings taken in the last year.

Meanwhile, 93% of covering analysts have handed out "buy" or better ratings on Facebook Inc (NASDAQ:FB), with not a single "sell" to be found. What's more, the average 12-month price target of $111.78 sits in never-before-seen territory. If FB continues to struggle, it could get hit with future downgrades and/or price-target reductions, potentially exacerbating selling pressure.
 

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