Research archive for META

Facebook reported its Q4 results last night, and they were in line with expectations. Revenue was up 25% compared to the same period last year. Earnings per share were $2.56 which was modestly above consensus at $2.53. In the absence of much to cheer about the stock price fell in after-hours trade, by 7%.

The Wall Street Journal is reporting today that Facebook management has decided to avoid putting ads on WhatsApp. That's great news for all of us using the service (more than 1.5 billion people around the world).

More and more people I talk to are doing business on Whatsapp. Our very own Vestact Superheroes group is very active, especially when we are not all in the office at the same time. I also find myself chatting to clients a lot more on WhatsApp. It really is a convenient method of communication.

On Wednesday night Facebook reported quarterly numbers that were ahead of analyst expectations. The company had revenues of $17.7 billion which allowed them to generate a profit of $6 billion. Just to put that in Rand terms, they make R90 billion in profits every three months, or R30 billion every month. Discovery's market cap is R80 billion, that means Facebook could buy Discovery with one quarter's worth of profits. The key to the Facebook business model is the number of people using the platform. The graph below shows how their monthly active users (MAU), has continued to grow. They added around 200 million people to the platform over the last 12 months.

This sounds futuristic but the headline is true. Facebook agrees to acquire brain-computing start-up CTRL-labs. And the company is not coming for free, it will cost between $500 million and $1bn. Remember, $1bn is what they paid for Instagram.

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.