Facebook Inc.

[Wildreamz]

Basing valuation on this like Earnings growth is growth investing not value investing. Forward PE/PEG are speculative measure as well.

Company is also not paying any dividend, just doing SBB, probably not intending to do so either, despite having spike in free cash flows. 

Facebook has recently been impacted by new tax laws. Also they have jacked up their ad prices by 40% in anticipation of less hours users going to spend on their feed. I am not expert about ad world but during bad times, companies will usually cut first their advertising. How long do you think this boom times will last?

Just like all the other FANG stocks, since Nasdaq and american markets already all time highs and bubble formed, I would say Facebook is classic overvalued company 

Haha, well, Facebook is the one of the Duopoly in online advertising (which is in secular growth), I expect it will just keep growing and gain market share until they have completely saturated the market (some estimate to be as large as US$3 trillion), before then they would have already move on to adjacent markets (Facebook Marketplace->Ecommerce ; Facebook Business-> Enterprise IT etc.).

Growth trend like this (middle of an S-Curve) may slow down over time, but don't usually reverse itself suddenly:


The tax impact is actually a one-time impact on overseas held cash, moving forward, Facebook is actually expected to have a net 8% increase in EPS due to tax reform:
http://www.businessinsider.sg/trump-gop-...?r=US&IR=T

Time spent on the platform is actually less important compared to quality of time spent; after all, everyone only has limited time in a day. The business model of getting more and more people hooked for longer and longer time spent on the platform is simply not sustainable. The ability for them to raise the price without negatively impacting their business shows that their product is indeed effective and in demand.

As for ad spending, it is interesting to see how resilient it is in bad times. Since, FB is not reliant on a single large customer, and is flushed with cash, and is very asset light, I think they will likely do fine over time 

[holymage]

Facebook has denied violating the consent decree when it allowed an app developer working for Cambridge Analytica to gain access to information about an estimated tens of millions of people. The group included both the 270,000 Facebook users who downloaded a psychological testing app and the Facebook “friends” of those people. This included the preferences those friends had expressed by hitting the widely used “like” button on social media posts or news stories.

In a statement Saturday, Facebook said, “We reject any suggestion of violation of the consent decree. We respected the privacy settings that people had in place. Privacy and data protections are fundamental to every decision we make.”

Vladeck, now a professor at Georgetown Law, said violations of the consent decree could carry a penalty of $40,000 per violation, meaning that if news reports that the data of 50 million people were shared proves true, the company’s possible exposure runs into the trillions of dollars. Vladeck said that such a fine is unlikely but that the final penalty still could be very large.


https://www.washingtonpost.com/news/the-...54f9d4b1cc

[cyclone]

How to download a copy of everything Facebook knows about you

Todd Haselton
Published 1:02 PM ET Fri, 23 March 2018  Updated 10:27 AM ET Sat, 24 March 2018

Facebook stores almost every single interaction you've had with the social network since you joined, including every time you've logged in, ads you've clicked, events you've been invited to, a list of the people you follow, your friends, your hometown, every time you've sent or received a message, every single status update and more.

It's basically the history of everything you've done on Facebook. It's also the data that Facebook can use to learn more about you. When others get unauthorized access to this data, they can learn a lot about you as well, as we learned from the Cambridge Analytica scandal that's currently unfolding.

Here's how to see everything Facebook knows about you and how to download your own archive of that information. It might be useful, especially if you're planning to quit and take some of those memories with you.

More details in https://www.cnbc.com/2018/03/23/how-to-d...t-you.html

[Wildreamz]

Facebook has denied violating the consent decree when it allowed an app developer working for Cambridge Analytica to gain access to information about an estimated tens of millions of people. The group included both the 270,000 Facebook users who downloaded a psychological testing app and the Facebook “friends” of those people. This included the preferences those friends had expressed by hitting the widely used “like” button on social media posts or news stories.

In a statement Saturday, Facebook said, “We reject any suggestion of violation of the consent decree. We respected the privacy settings that people had in place. Privacy and data protections are fundamental to every decision we make.”

Vladeck, now a professor at Georgetown Law, said violations of the consent decree could carry a penalty of $40,000 per violation, meaning that if news reports that the data of 50 million people were shared proves true, the company’s possible exposure runs into the trillions of dollars. Vladeck said that such a fine is unlikely but that the final penalty still could be very large.


https://www.washingtonpost.com/news/the-...54f9d4b1cc

The whole issue with consent decree in my view, is by far the largest risk overhang of Facebook. And the outcome will likely boil down to how Facebook lawyers make their case that "consumers have already agreed to it". 

Beyond that, I think the user backlash is minimal, and the whole debacle is likely going to blow over. In my view, most people that actually uses Facebook, are what Millennials commonly term "Normies", who are not acutely aware/concerned about social issues such as privacy and politics. Most of the heaviest Facebook users that I spoke to, wasn't even aware about these issues that are hotly debated on the news and media outlet right now (mostly by politicians, media talking heads, and activists). Advertisers backlash is also minimal. 

(vested)

[weijian]

Facebook has high switching costs and so it is not easy for users to migrate to new social platforms. The ecosystem should remain relatively intact despite threats like elon musk or the whatsapp co founder encouraging #deletefacebook.

However, monetization of the network is another question. FB justifies what it charges to advertisers via how effective/frequent the message is delivered to the target audience. There has been multiple instances recently that seems to suggest that Mark Zuckerberg will be sacrificing profit margin points in exchange for "better user experience".

[Wildreamz]

Facebook justifies charging higher cost not by increasing engagement metrics (showing up more often in front of audiences) but increasing effectiveness (the number of new customers it brings per dollar spent on advertising on the FB platform). 

This is not surprising due to their capability to collect data on their users and micro targeting (hence, less wastage, less "spray and pray" advertising). This very effectiveness, is what draws so much criticism, as politicians could potentially use FB to sway elections. Hence, the very foundation of Democracy is threatened by the quest for FB to maximise profits.

The whole debacle is actually an explosion of multiple criticism that has been mounting on social media for so many years:
* Privacy concerns
* Addiction
* Misinformation

Facebook is essentially facing 3 crisis, as they are attacked by all it's critics all at once. And rightfully so.

I think the Pandora Box of Social Media has been opened. And there is no turning back now. Tools to access information and audiences would just get, faster, better and more powerful. Corporations, regulators, and we the people, in general needs to figure out how to control this so as to minimise the downside and maximise the upside of this more connected world.

For investors/potential investors, the decision to buy, hold, or sell lies with how much you trust the management (essentially Zuck an Sheryl) to navigate all these issues. IMO, they have a good balance of genuine good will, technologically, and business savvy. The tools they use to police their platform, are also one of the most sophisticated in Social Media. But they have very very poor oversight, and can be quite tone-deaf at times.

[weijian]

I have to admit I quit Facebook because i find no joy in it after abstaining from it for a while, and realized that i am on aggregate happier without than when i was with.

Want to #DeleteFacebook? You Can Try

n the wake of news that the Facebook data of 50 million people was obtained by Cambridge Analytica, a political data firm, many users are mulling whether it is time to leave the social network. Even a co-founder of WhatsApp, which Facebook bought for $16 billion in 2014, declared that it was time to delete Facebook.

But while deleting your account is as simple as clicking on a few buttons, Facebook may be too ubiquitous to truly quit. For one, it would probably be inaccurate to say you have removed Facebook from your life just by leaving the site. Chances are you still use WhatsApp, the largest messaging app in the world, or Instagram, the most popular photo-sharing app. Facebook owns both.

Keep in mind that Facebook isn’t the only company capable of collecting your information. One big culprit: Web trackers, like cookies embedded into websites and their ads. They are everywhere, and they follow your activities from site to site.

You can quit Facebook if you simply find no joy in it. But if you’re looking to leave for philosophical reasons concerning privacy, it’s a futile effort. You may be better off tweaking your privacy settings on the site.

https://www.nytimes.com/2018/03/21/techn...ebook.html

[Wildreamz]

"Dean of Valuation" Aswath Damodaran

Edit: Can't get embedding to work: https://www.youtube.com/watch?v=mSmgox_zDIg

---

My take on the hearings is that US lawmakers are finally realizing how the internet works. Facebook and Google "like" and "share" buttons on 100s of millions of websites; invisible Facebook "pixel" and Google Analytics scripts that tracks you around the internet. Welcome to Web 2.0, you are 10 years too late to the party. This is why sites no longer spam users with "porn" banners and instead, you see sophisticated targeted ads both on Facebook and everywhere else.

Big question: will US lawmakers suddenly impose broad laws that fundamentally changes how the internet works up till now?

[cyclone]

Facebook launches Instagram Lite — a stripped-down version of the app for emerging markets

Arjun Kharpal
June 28, 2018

Facebook introduced a stripped-down version of the social photo-sharing app Instagram, aimed at users in developing markets.

Instagram Lite quietly appeared on the Google Play Store Wednesday for Android smartphones and the size of the app is just 574 kilobytes, substantially smaller than the roughly 90 megabytes required for the main Instagram app.

The Lite app let's you post pictures, create and watch stories that disappear after 24 hours, and search for users. Users currently don't have the option to message friends or share videos, but a description on Google's app store said that those functions are coming soon.

Instagram Lite is aimed at emerging markets which typically are dominated by lower cost Android devices. Users in these countries have limited data plans and that's where Lite versions of apps become important.
...
Instagram crossed the one billion user mark this year, and Facebook, which owns the photo-sharing service, is looking at ways to get the next billion users on board. Fast-growing developing markets are seen as a key part of this growth.

More details in https://www.cnbc.com/2018/06/28/facebook...rkets.html

[cyclone]

Facebook plunges more than 24 percent on revenue miss and projected slowdown

Michelle Castillo
July 26, 2016

Fcebook missed projections on revenue and global daily active users this quarter after struggling with data leaks and fake news scandals.

The company reported its second-quarter earnings after the bell on Wednesday. Shares were down as much as 20 percent. At the current after hours prices and given its market cap at the close Wednesday, Facebook is poised to lose more than $123 billion in market value.

* Earnings per share: $1.74 vs. $1.72 per a Thomson Reuters consensus estimate
* Revenue: $13.23 billion vs. $13.36 billion per a Thomson Reuters consensus estimate
* Global daily active users (DAUs): 1.47 billion vs. 1.49 billion, according to a StreetAccount and FactSet estimate
* North American DAUs: 185 million vs. 185.4 million, according to a FactSet estimate
* European DAUs: 279 million vs. 279.4 million, according to a FactSet estimate
* Average revenue per user (ARPU): $5.97 vs. $5.95, according to a StreetAccount and FactSet estimate

Facebook said 2.5 billion people were using any of its family of apps each month, including Instagram and WhatsApp. Though Facebook-specific global DAU rates were up 11 percent year over year - with growth led through users in India, Indonesia and the Philippines - it was less than Wall Street was projecting. European DAUs were down from 282 million last quarter, potentially related to the effect of the enactment of the General Data Protection Regulation (GDPR) in the European Union. The set of regulations gives users more control over their online data.

More details in https://www.cnbc.com/2018/07/25/facebook...-2018.html