Investor on a way to play it in a single trade

Facebook was beaten in the past month, losing 13%.

But, Inside Edge Capital Management founder Todd Gordon is so confident in Facebook’s rebound that he’s ready to invest real money in a unique way – by executing a trade on Facebook using the company’s Oculus virtual reality system.

First, however, he explained why he still feels confident in the stock.

“I am disappointed with many of their manipulative practices, but in the longer term I believe the business, that through regulation or natural market forces, it will correct some of the wrongs,” Gordon said on Trading Nation. “from CNBC Thursday.

Facebook came under scrutiny recently after whistleblower Frances Haugen testified before a Senate committee in early October, alleging that the company put profit before the public good.

“Despite all of these problems, Facebook’s stock has been a rock star. It has risen 750% since the IPO in 2012, against the Nasdaq at 480%,” Gordon said.

Despite recent privacy concerns, Gordon said Facebook’s long-term growth looks promising.

“I firmly believe they are well placed in the social media space which – let’s face it – has changed human interactions forever, and in particular I love where they are going with the AI ​​and the reality space. virtual, ”he said. “I’m very optimistic about this, and the pandemic has only accelerated the adoption of this technology. We were already on the path to that.”

Pulling on his Oculus VR glasses to trade, Gordon highlighted a support area at $ 320 that is expected to hold after the latest weakness – this matches his 200-day moving average.

Betting on a bullish move after earnings forecast for October 25, Gordon buys the 340 call and sells the 350 call expiring on October 29.

“That’s $ 290 of risk to potentially earn $ 710 on that buying spread,” he said.

Facebook traded just above $ 324 on Friday. It would take a 5% rally to hit the lower end of Gordon’s call spread range at $ 340.

Disclosure: Todd Gordon and Inside Edge Capital Management own shares on Facebook.


Leave a Comment