Since its highly anticipated IPO, social-media titan Facebook Inc. (NASDAQ: FB) has had a turbulent ride in the market. Despite all its efforts to push innovation and growth, the company has hit a plateau with fewer options left for expansion. A closer look at the technicals and operations of the company reveal the primary reasons on why the stock is only worth going short.

THE NUMBERS

Facebook’s performance over the quarter has been less than optimal. Along with the S&P 500, the technology sector climbed to record altitudes while FB stumbled over 15%. Last year the company’s debt more than doubled to $1.59 billion, while the net income declined from $668 million in 2011 to merely $32 million in 2012.

In an effort to generate higher revenues, Facebook implemented new advertising strategies along with paid options for promoting a user’s activity on news feed and fees to send messages to users outside of the sender’s network. Activities like this have caused the ever-growing number of users to slow down and in some markets, drop significantly. The company has lost more than nine million friends in U.S. and 12 million in UK over the past six-months alone.

FRESH PLATFORMS

Competitors like Twitter, LinkedIn and Path are offering the restricted FB users a fresh platform to experience, while proving new services. As demands for online presence grow, many professionals opt to LinkedIn’s (NYSE:LNKD) networking tools. LNKD has seen a 45% growth over the past quarter alone.

Twitter, the micro-blogging mania has grown to over 500 million users following tweets of friends and celebrities. The limited yet meaningful interactions between users make Twitter an easy substitute for many Facebook users.

BOTTOM LINE

As the number of users logging-on from smart phones and tablets grows, Facebook mobile is expected to play a more crucial role in the company’s future. Following Google’s increase in mobile revenues, Facebook investors have high expectations for first quarter earnings on May 1.

MY TRADE

Selling the FB Weekly 28-29 Call Spread for $0.40
Risk: $0.60 Per 1 Lot
Reward: $0.40 Per 1 Lot
Break-even: $28.40

THE GREEKS

Delta: Short

Gamma: Short

Theta: Long

Vega: Short