Research archive for META

A client wrote to me at the end of 2022, complaining about the poor performance of Meta Platforms. The company had renamed itself in October 2021 and hit a high a few days later of around $380 before crashing to $93. It lost 76% of its value in a matter of months.

As a parent with young kids, I find the idea of my children going on social media one day quite daunting. I was pleased to see that Instagram announced some security updates to accounts for teenagers (under 18) which gives parents more control over messaging and content.

I enjoy articles that explore history, providing context to reflect upon our modern lives. This Ben Evans essay titled Asking the wrong questions does just that and it is a great read.

As promised, here is the feedback from my visit to the Meta head office, which I will do in two parts. I'll cover the building tour now, and tomorrow I'll talk about insights picked up about the company. My old school friend, who is now a director of data analytics at the company, spent over 2 hours showing us around the head office campus and chatting about the business.

After a rough few weeks for the magnificent 7 stocks, Meta galloped to the rescue with some great-looking numbers on Wednesday night. Revenues came in at $39 billion, crushing expectations by $760 million. Earnings were up 73% from this time last year at $5.16 per share, well ahead of the expected $4.72. If you annualise those earnings, the stock trades on a price-to-earnings ratio of 22 which seems good value for such a solid business.

Last week, the Wall Street Journal reported that Meta was in talks to buy up to 5% of EssilorLuxottica, the company that owns leading sunglass brands like Ray-Ban. A few Vestact clients have been long-term holders of their shares, even before the merger of Essilor (French, lens maker) and Luxottica (Italian, frame designer).

According to Reuters, Facebook is back in favour with young adults. A few years back the social media site had lost its allure with younger people and it was considered uncool to engage on the site.

The market is having a tough time working out the right price level for Meta Platforms shares. The social media giant (Instagram, Facebook, Messenger and WhatsApp) is run by one of the world's best CEOs, 39-year-old Mark Zuckerberg. They have about 3.6 billion users, which is more than 77% of those currently using the internet.

When Meta reports their quarterly results, they don't break down their revenues by platform. In other words, we can't see how much money Instagram, Facebook or WhatsApp makes by themselves.

I read a good sell-side report from US broker Jefferies last week, about Meta Platforms. They have a $585 per share target on the company (the current price is around $520).

There are indications that TikTok's rapid growth is beginning to level off, marking a significant shift from its explosive expansion since launching in 2016.

It's been 20 years since Mark Zuckerberg founded Facebook in a Harvard dorm room. The holding company stock, now called Meta, also happened to rocket 20% higher after it posted stellar results last week. They were truly impressive numbers.

Mark Zuckerberg changed his focus in 2023 from the metaverse to AI. His ability to change his mind is remarkable, especially since he had already rebranded the Facebook group as Meta Platforms.

When Facebook bought WhatsApp for $19 billion almost a decade ago, Mark Zuckerberg promised not to interfere too much with the messaging app. There was a subtle shift in 2019, when parent company Meta Platforms started tapping into WhatsApp's growth and business potential.

In February it will be ten years since Facebook (now Meta Platforms) bought WhatsApp. Where has all the time gone? They paid $19 billion for the messaging app back then, a significant amount of money considering that it hasn't generated much income since its acquisition.