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Facebook's problem: Too many parents

July 27, 2012: 11:33 AM ET

Facebook is for everyone, but not parents.

In the flurry of research that emerged this morning on Facebook, Trip Chowdhry at Global Equities Research has this gem.

The main problem with Facebook (FB) is not its lack of mobile revenue, capricious management or privacy issues, according to Chowdhry. It's parents.

Yes, parents.

Those pesky people who raised you and are now cramping your style on Facebook. They are the biggest threat to the social network and the main reason why investors should "remain on the sideline," writes Chowdhry in an email under the subject line "Facebook (FB) Your Qs answered."

Related: Facebook stock plunges to all-time low

Personally, I'm convinced. But in case you need more proof, here's why Chowdhry says parents are to blame for Facebook's lousy share price.

Today, Kids are on Facebook, and so are their Parents.  Kids are spending less time on Facebook, as their Parents are also now on the Facebook. Parents are relatively spending more time on Facebook, but is not off-setting reduced time Kid's are spending on the Facebook.  It is a psychological reality, that after a certain age, Kids are less inclined to hangout where their Parents are.

Another psychological reality, as kids grow older, they become more like parents. This is bullish for Facebook over the long term, but that's another issue.

Chowdhry continues:

FB may be cool again for the Younger people, if FB bans Parents from FB, but that is impossible.  Just like in physical world, the people find a new place to hangout, probably the same may happen here also and sadly it may not be FB.

So Facebook is not a buy because of parents. No further questions.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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