FB - Facebook

[Guest longinvestor]

This is all noise, FB is the winner and they ain’t done taking all of it.

[Jerry Capital]

Not only that it seems that Zuck wanted regulation, regulation favors the incumbent... I think he is authentic when he says he doesn't wanna have to make decisions on free speech and such.

[no_free_lunch]

I tend to agree.  Everyone I have talked to is staying on Facebook. 

 

Back out cash and you have a $390B market cap, vs $22B earnings based on last quarter and new tax rates.  18x past earnings and still growing.  Seems like a decent bet.

[Jerry Capital]

Started a position on Friday, added today and will continue adding as it goes lower. Too cheap.

[rb]

There are a couple of differences here between this and salad oil. Salad oil affected a small subsidiary of Amex whereas this affects the main business of Facebook.

 

Amex stock went down by more than 50%. FB is down only 15%. It didn't even hit a 52 week low.

[Matson125]

There are a couple of differences here between this and salad oil. Salad oil affected a small subsidiary of Amex whereas this affects the main business of Facebook.

 

Amex stock went down by more than 50%. FB is down only 15%. It didn't even hit a 52 week low.

 

Good point, RB.  I would add that Buffett went to a local restaurant in Omaha and determined that folks were still using their AMEX card. 

 

Fast Forward today an investor would be able to track FB downloads on the Apple app store and Google play, in addition to any anecdotal evidence about family or friends deleting their FB.

 

 

[Liberty]

There are a couple of differences here between this and salad oil. Salad oil affected a small subsidiary of Amex whereas this affects the main business of Facebook.

 

Amex stock went down by more than 50%. FB is down only 15%. It didn't even hit a 52 week low.

 

Good point, RB.  I would add that Buffett went to a local restaurant in Omaha and determined that folks were still using their AMEX card. 

 

Fast Forward today an investor would be able to track FB downloads on the Apple app store and Google play, in addition to any anecdotal evidence about family or friends deleting their FB.

 

https://www.buzzfeed.com/alexkantrowitz/nothing-is-going-to-happen-to-facebook-or-mark-zuckerberg

 

"And though users posted #DeleteFacebook en masse, Facebook actually rose to 8th place from 12th in the iOS mobile App Store since the day before the Cambridge Analytica news broke. It’s holding steady on Android, too.

 

After examining whether first-time US installs of Facebook were dropping, Randy Nelson, head of mobile insights at app analytics company SensorTower, told BuzzFeed News: “The short answer is no.” App Store rankings don't directly reflect user numbers, but they're a good of indicator of interest."

 

Also:

 

https://www.appannie.com/en/apps/ios/top/united-states/overall/iphone/

 

https://www.appannie.com/en/apps/google-play/top/united-states/overall/

[siddharth18]

There are a couple of differences here between this and salad oil. Salad oil affected a small subsidiary of Amex whereas this affects the main business of Facebook.

 

Amex stock went down by more than 50%. FB is down only 15%. It didn't even hit a 52 week low.

 

Did Amex really go down by more than 50%? I'm looking at https://hurricanecapital.wordpress.com/2014/04/30/valuation-of-amex-in-1964-price-vs-value-part-3/ and it says 41% from peak to trough.

 

On the other hand, FB has a higher growth rate and better operating margin than Amex did.

[Matson125]

There are a couple of differences here between this and salad oil. Salad oil affected a small subsidiary of Amex whereas this affects the main business of Facebook.

 

Amex stock went down by more than 50%. FB is down only 15%. It didn't even hit a 52 week low.

 

Good point, RB.  I would add that Buffett went to a local restaurant in Omaha and determined that folks were still using their AMEX card. 

 

Fast Forward today an investor would be able to track FB downloads on the Apple app store and Google play, in addition to any anecdotal evidence about family or friends deleting their FB.

 

https://www.buzzfeed.com/alexkantrowitz/nothing-is-going-to-happen-to-facebook-or-mark-zuckerberg

 

"And though users posted #DeleteFacebook en masse, Facebook actually rose to 8th place from 12th in the iOS mobile App Store since the day before the Cambridge Analytica news broke. It’s holding steady on Android, too.

 

After examining whether first-time US installs of Facebook were dropping, Randy Nelson, head of mobile insights at app analytics company SensorTower, told BuzzFeed News: “The short answer is no.” App Store rankings don't directly reflect user numbers, but they're a good of indicator of interest."

 

Also:

 

https://www.appannie.com/en/apps/ios/top/united-states/overall/iphone/

 

https://www.appannie.com/en/apps/google-play/top/united-states/overall/

 

Good catch, Liberty.

[walkie518]

The uncertainty about this scandal isn't what happened a few years ago but what might happen a few years from now.

 

To assume Washington does nothing about the CA data "loss" is the bet one makes when buying FB shares today. 

 

The fines to be levied will likely be immaterial.  While a likely event and a positive for the company, this would be a big negative for the average user.

 

Making matters worse, consumers might not care in spite of the breach of trust. 

 

Instagram and WeChat are both doing very well.  If there wasn't so much power in the platform's ability to target users, the CA scandal wouldn't bear so much credence.

 

What happens, however, if Facebook is required to provide information on its user-base.  What happens when there are third-parties required to oversee Facebook user data. 

 

Say 1/4 users are not real or are part of a click-farm.  If Facebook is managing this grouping by itself, the number doesn't change. 

 

If Facebook is required to use a legitimate third-party paid for by its advertisers, maybe the statistics and estimates of user base start to make more sense together?

 

Where I struggle most is the divergence between what they do and the value the products bring to customers.  It's as if the advertiser wins because of how direct the platform is.  It's as if the consumer wins because it's easy to stay in touch.  These two aims, while seemingly symbiotic, pose problems in the application for more reasons than simply the Facebook CA scandal...

 

[siddharth18]

The uncertainty about this scandal isn't what happened a few years ago but what might happen a few years from now.

 

To assume Washington does nothing about the CA data "loss" is the bet one makes when buying FB shares today. 

 

The fines to be levied will likely be immaterial.  While a likely event and a positive for the company, this would be a big negative for the average user.

 

Making matters worse, consumers might not care in spite of the breach of trust. 

 

Instagram and WeChat are both doing very well.  If there wasn't so much power in the platform's ability to target users, the CA scandal wouldn't bear so much credence.

 

What happens, however, if Facebook is required to provide information on its user-base.  What happens when there are third-parties required to oversee Facebook user data. 

 

Say 1/4 users are not real or are part of a click-farm.  If Facebook is managing this grouping by itself, the number doesn't change. 

 

If Facebook is required to use a legitimate third-party paid for by its advertisers, maybe the statistics and estimates of user base start to make more sense together?

 

Where I struggle most is the divergence between what they do and the value the products bring to customers.  It's as if the advertiser wins because of how direct the platform is.  It's as if the consumer wins because it's easy to stay in touch.  These two aims, while seemingly symbiotic, pose problems in the application for more reasons than simply the Facebook CA scandal...

 

 

I don't think a third party oversight would affect ad revenues. It could affect margins, maybe but also not by much.

 

Facebook's ad revenues are a function of the return on ad spend the advertisers are able to extract from their adspend. So long as facebook retains its unique laser like accuracy in targeting ads to its users, the advertisers will be able to extract an ever higher return on their ad spend.

 

The fact that facebook advertising is so incredibly profitable (when the targeting and the marketing funnel is right) overrides concerns about a percentage of users not being real or being part of a click farm.

[Guest roark33]

The idea that the Cambridge story has "hit a nerve with users" is such an odd comment.  The 38-year old mother of 3 who went to Disneyworld this past weekend posted the same 8 photos she would have posted had the CA story not been published this past week.  The father whose son won the wrestling tournament over the weekend also posted the photo of his 10-year old hoisting the trophy. 

 

I always find it funny how much investors think the average people are moved by stories in the press.  These stories may really be interesting to the average WSJ reader, but they are meaningless to the average soccer mom in america. 

[walkie518]

The idea that the Cambridge story has "hit a nerve with users" is such an odd comment.  The 38-year old mother of 3 who went to Disneyworld this past weekend posted the same 8 photos she would have posted had the CA story not been published this past week.  The father whose son won the wrestling tournament over the weekend also posted the photo of his 10-year old hoisting the trophy. 

 

I always find it funny how much investors think the average people are moved by stories in the press.  These stories may really be interesting to the average WSJ reader, but they are meaningless to the average soccer mom in america.

 

It might be that they don't read the news?

 

As for click farms, maybe with the correct marketing knowledge the force is Facebook can be unleashed. However, I am very curious how much money is spent by people who have no idea how to use Facebook's advertising tools. Any one have a sense what that piece of ad revenue's might look like? The common small business owner with limited SEO expertise?

[nkp007]

People are pissed because they think FB handed Trump the election. That's the only reason.

 

No one really cares about nor expects privacy anymore. That's the cost of using FB, GOOGL, etc.

 

 

[LounginMKL]

The idea that the Cambridge story has "hit a nerve with users" is such an odd comment.  The 38-year old mother of 3 who went to Disneyworld this past weekend posted the same 8 photos she would have posted had the CA story not been published this past week.  The father whose son won the wrestling tournament over the weekend also posted the photo of his 10-year old hoisting the trophy. 

 

I always find it funny how much investors think the average people are moved by stories in the press.  These stories may really be interesting to the average WSJ reader, but they are meaningless to the average soccer mom in america.

 

It might be that they don't read the news?

 

As for click farms, maybe with the correct marketing knowledge the force is Facebook can be unleashed. However, I am very curious how much money is spent by people who have no idea how to use Facebook's advertising tools. Any one have a sense what that piece of ad revenue's might look like? The common small business owner with limited SEO expertise?

 

I can't speak for all SMBs, but you can read about their success stories here (https://www.facebook.com/business/success). The value of targeted ads is real and is incredibly powerful. FB/GOOG allows SMBs with limited budgets to compete, lowering the barriers to entry for B2C. 

 

I personally know a friend who was able to leverage FB/Instagram advertising (among other digital marketing tools) to sell $18M worth of consumer products. Her case study is also featured on FB's success stories.

 

IMHO, to focus on click farms is missing the forest from the trees. Maybe there are are fake/duplicate accounts, but they remain a very small percentage of the overall user base.

[Nell-e]

IMHO - I think the regulatory risk is very real.  I think back to the Microsoft antitrust legal issues that lasted over 20 years.  I can't think of much downside for politicians to turn FB into a utility.  I doubt voters will care as long as current functionality stays the same.  For average people, it's a tool like a telephone. 

 

What's more I think it's a legitimate debate people should be having after seeing how much influence FB has over our elections.  At the very least, they should be subjected to more regulation over transparency. 

[rb]

Well you can assume that the Americans don't care or that the American government doesn't care. But Facebook is a global business. And while the mother of 3 from Kansas may not care what's shared about her Disney trip and how that's used, the mother of 3 from Berlin definitely does. So do a lot of governments since politicians generally don't like interference in their elections. So while the US business may be relatively safe the foreign business is at serious risk.

 

I think that a smart move for FB would be to ban political advertising and data collection from the platform. It's a small piece of the revenue pie that carries with it a big risk. Better be safe than sorry.

[Nell-e]

Article from Business Insider: http://www.businessinsider.com/people-are-sharing-their-terrifying-downloaded-facebook-data-2018-3

 

People are downloading their Facebook data and posting it to Twitter

 

People discovered they could request all of their Facebook data as a zip file and now they are posting the results on Twitter.

People were astounded to know that Facebook has access to every call they had made and text they had sent.

Users also found that their data had been shared to various advertisers.

One developer made a code available on Github for anyone who would like to make sense of their own Facebook data.

[Nell-e]

Here’s how to download all your data from Facebook. https://www.washingtonpost.com/news/the-intersect/wp/2018/03/27/heres-how-to-download-all-your-data-from-facebook-it-might-be-a-wake-up-call/?utm_term=.a9a061ffeccd

 

[Jurgis]

https://www.bloomberg.com/news/features/2018-03-27/ad-scammers-need-suckers-and-facebook-helps-find-them

[LounginMKL]

https://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=1&_r=1&hp

 

Maybe we should ask Target CEO to appear before Congress too  ;) Where I can download my data profile from Target? Or Google?

 

I personally feel this whole FB saga has turned into media fearmongering. Advertisers don't actually see the individual-level data. They don't know which individuals are in their targeted campaign. Yes, FB collects a lot of data on you; but so does Google and everyone else. If one doesn't want to be target advertised, s/he needs to go off the grid.

 

Then again, as an investor, we are not here to judge right or wrong, we are here to determine outcome. Although I think FB has "good" intentions, I am worried that we could see a "run on the bank" scenario here. For now, I'm betting on the status quo.

[KCLarkin]

I personally feel this whole FB saga has turned into media fearmongering. Advertisers don't actually see the individual-level data. They don't know which individuals are in their targeted campaign. Yes, FB collects a lot of data on you; but so does Google and everyone else.

 

This scandal isn't about collecting personal data and using it to sell advertising. It is about FB handing over your personal data and the data for all your friends (including individual data) to 3rd party developers with nothing more than a "policy" restricting how that data can be used.

[Liberty]

[Liberty]

Thread:

 

[LounginMKL]

I personally feel this whole FB saga has turned into media fearmongering. Advertisers don't actually see the individual-level data. They don't know which individuals are in their targeted campaign. Yes, FB collects a lot of data on you; but so does Google and everyone else.

 

This scandal isn't about collecting personal data and using it to sell advertising. It is about FB handing over your personal data and the data for all your friends (including individual data) to 3rd party developers with nothing more than a "policy" restricting how that data can be used.

 

KCLarkin- I agree that the focus of the issue is FB letting third party developers obtain user data in 2013 (5 years ago). My previous comment (probably too ambiguous in hindsight) is that the media has really sensationalize and extrapolate the Cambridge event into something that's much more horrifying- everyone can invade your privacy via FB. I mean, that's why people are downloading their profile data and panicking. The reality is that FB (allegedly) has not been sharing individual user data with advertiser/developer for years and probably won't after this event. If regulation begins to heavily restrict user data mobility, then a FB challenger will have to build the social network organically- and that is hard...

 

Liberty- Thanks for sharing the twitter thread- he explains it better than I.