Research archive for META

A big part of the Facebook stable is WhatsApp, where the company has yet to unlock the applications full potential. Getting the user base was the first challenge, now they need to figure out a way to monetise without reducing user experience. The huge potential for growth from WhatsApp is one of the reasons why we own Facebook shares.

The Wall Street Journal reported late on Friday that the Federal Trade Commission (FTC) has agreed to fine Facebook a record-setting $5 billion on Friday for privacy violations. This makes me mad.

Yesterday Facebook released details of their new cryptocurrency, Libra. The currency is only partly Facebook's because there are other founding partners, who also have a say in how things will be run. The founder group includes Visa, Mastercard, Uber, PayPal, Vodafone, PayU (Naspers) and eBay. It's expected to launch early next year.

I'm getting really steamed up about bullsh*t articles in the media suggesting that Facebook should be split up. I mean, what tripe is this? They are a private company, offering a free service on the Internet, to which users sign up voluntarily! Ok, they have made a few mistakes with sharing data with advertisers and other "marketers", but they said that they'd be more careful in future. Never forget, individual users get to determine their own privacy settings.

Last week Tuesday was a big day for Facebook. They had their annual developer conference during a time where the company's potential negative influence on society is the main focus. You may have noticed already that the newsfeed has been redesigned. The design encourages more sharing within the private realms of Messenger and Whatsapp.

On Wednesday evening Facebook released Q1 numbers. The stock popped 9% in after-hours trade and closed the day out up 6%.

Facebook gets a lot of bad press, so we are quite often asked why it remains a Vestact recommended portfolio holding. The criticisms of the company mostly relate to the main Facebook platform, where some feel that it does not do enough to prevent the spread of fake news, hate speech and terrorist propaganda. Others feel that it is bad for society, as people spend too much time online, instead of chatting in person. The company's privacy policies are also attacked, and its CEO Mark Zuckerberg is accused of selling users' personal information to advertisers and other shadowy intermediaries.

Facebook has been receiving some bad press lately. But we should not forget what a powerful tool it is. We must also not forget that it owns Instagram and Whatsapp. I came across this article titled Instagram will now let you buy products directly inside the app. It talks about a new functionality whereby you are not redirected to the sellers website. Instagram has partnered with Paypal and will keep a small cut of each sale.

My colleague Bright covered Facebook's recent results yesterday, but I am keen to re-emphasise just how strong the company's growth metrics look. You know, because to read the market headlines these days, you might think that they were a failing company?

Diversified social media giant Facebook turned 15 yesterday, a big milestone for a company that was started in a university dorm room. Accel Partners invested $14.8 million in a website called 'the facebook.com' back in 2005, today the returns are north of $5.6 billion or 378 times their initial outlay.

Picture this cricketing scenario. You are chasing 300 runs and your team is already 100/4. Your 6th batsmen, who is horribly out of form, comes in to try and save the day. After a shaky start, he finds his feet and comes through with a cracking century off 60 balls and saves the day. That is what it was like when Facebook released their results on Tuesday. Facebook, of course, were batting for team Tech. Amazon, Netflix and Google had gone out cheaply (although Netflix put up a brave fight). Fortunately, Facebook beat expectations and the share price shot up 5% premarket.

Facebook stock has been quite weak lately. If you look at the two year chart below, you can see that it peaks at $210 a share in July 2018, and has slipped steadily since then, to $154 at the close last Friday. What gives?

I recently read a Seeking Alpha blog post, where the author did a Discounted Cash Flow (DCF) on Facebook. He concluded that Facebook is currently undervalued by 40%. The forecast is that in the coming years, Facebook will more than triple its revenue to over $150 billion.

Capitalism often results in very positive outcomes for mankind, even though the company itself is looking after its own interests. A great example of this is how Facebook want the whole world to be connected. The more people who have access to the internet the more users they can get. And of course, access to the internet is the ultimate leveller.

Facebook announced two days ago that it had found some irregular accounts on its platform mimicking the same behaviour as the accounts that tried to influence US elections in 2016. The company doesn't know exactly where the accounts are from but says the activity is similar to those of known Russian state funded hacker groups.