nickenumbers Posted May 21, 2018 Share Posted May 21, 2018 I took a long term position in Facebook [FB] stock and a medium term position with options in FB, today. Over the last couple of weeks I have been reviewing, Facebook, Amazon, Apple, Netflix, Google, Microsoft and Oracle. Twitter and Snap. Revenue, Rev Growth Rates, Net Income, NI Growth Rates and Margins, with Margin Growth rates. The story that that data tells is pretty interesting. I have also been thinking about the intangibles of the products. Facebook based on current prices and current product offerings is a high probability treasure, I believe. Plus they still have room to grow. FB is not so large that there is no more room to grow. [Apple and Google have his problem of being too big, little room left.] Not only does it own the FB platform, but it has Instagram, WhatsApp, and the messenger products. It has the Story component of Insta, and its products are very very sticky. There are not real substitutes for what it does. And when everyone is using a platform, FB, Insta, it forces everyone to use it even more. Becomes a self fulfilling prophecy. Network Effect. Zucker is young and fanatical for what he does... almost maniacal.. That is actually a good combination. FB should not be priced as low as it is with the growth rates that it has. I think the political risk and Zucker testifying in front of congress is freaking everyone out. So, there is some political and regulatory risk. [Event Driven opportunity for us.] I think it has a couple of years to continue to grow and I feel pretty good about it over the next 12-18 months.. Link to comment Share on other sites More sharing options...
LongTermView Posted May 21, 2018 Share Posted May 21, 2018 FB should not be priced as low as it is with the growth rates that it has. Agreed. Link to comment Share on other sites More sharing options...
walkie518 Posted May 22, 2018 Share Posted May 22, 2018 Wrote a new article: https://seekingalpha.com/article/4167059-facebook-alphabet-bright-prospects If anyone knows the specifics on growth vs maintenance in their capex then I'd like to hear about the details. Someone like Baidu spends only 5% of revenue on capex. They have capex heavy moonshots like Google and Facebook, but much less. Facebook generates revenue in a similar model (ads on websites) and 39 billion out of 41 billion comes from adds. So you can attribute 2 billion to maintenance on the website (idk how much to attribute to other businesses like Oculus), which may even be conservative. Thanks, cameronfen. After talking with folks over the weekend, it sounds like the Depreciation and amortization line is pretty close to maintenance/replacement capex for FB. D&A cannot be capex. I would have to dig into the statements, but equipment like switches and data center equipment can be put on a 3 year schedule. A smart CFO would likely try to squeeze every dollar out of the taxable box, and considering the company's tax efficiency, I don't see that as an unlikely scenario. The income statement shows $622m for the last Q of provision for income taxes and the cash flow statement shows $47m. FB is on a run-rate close to $11B of property and equipment spending which will translate into an additional $3.67B of D&A next year. Some of that figure will replace the current d&a of $1B/quarter but as FB buys more switches etc to accommodate demand, and it seems as though spending is going up for p&e rather than buying securities, d&a increases but spending to maintain the data centers is very different from discretionary growth spending. My guess is FB pays for 3 new data centers a quarter... Link to comment Share on other sites More sharing options...
LongTermView Posted May 24, 2018 Share Posted May 24, 2018 D&A cannot be capex. I would have to dig into the statements walkie518, I'm curious to know your thoughts on the percent of capex that is maintenance/replacement vs growth if you dig into the statements. On another note, here are follow-up questions from EP: https://www.facebook.com/facebookbrussels/posts/1769490786430772 This part caught my eye: 5. European courts have demanded the separation of users' data between Facebook and WhatsApp. Will you promise there won't be any exchange of users' personal data between the two services? No, because we will share data between Facebook and WhatsApp in order for Facebook to provide services like tools and analytics to WhatsApp and to help fight abuse on our services. For example, when we receive reports of a bad actor sending unwanted messages — like spam or abusive content — on either WhatsApp or Facebook, we can share information and can take action including blocking them across both services. We are not currently sharing European users' WhatsApp account information to improve people's product and ads experience on Facebook. If we do choose to do this in the future, we will do so in accordance with GDPR, working with the Irish Data Protection Commissioner and in a way that is transparent to people. More information is available here. Link to comment Share on other sites More sharing options...
walkie518 Posted May 24, 2018 Share Posted May 24, 2018 D&A cannot be capex. I would have to dig into the statements walkie518, I'm curious to know your thoughts on the percent of capex that is maintenance/replacement vs growth if you dig into the statements. On another note, here are follow-up questions from EP: https://www.facebook.com/facebookbrussels/posts/1769490786430772 This part caught my eye: 5. European courts have demanded the separation of users' data between Facebook and WhatsApp. Will you promise there won't be any exchange of users' personal data between the two services? No, because we will share data between Facebook and WhatsApp in order for Facebook to provide services like tools and analytics to WhatsApp and to help fight abuse on our services. For example, when we receive reports of a bad actor sending unwanted messages — like spam or abusive content — on either WhatsApp or Facebook, we can share information and can take action including blocking them across both services. We are not currently sharing European users' WhatsApp account information to improve people's product and ads experience on Facebook. If we do choose to do this in the future, we will do so in accordance with GDPR, working with the Irish Data Protection Commissioner and in a way that is transparent to people. More information is available here. LTV, Unfortunately, that link doesn't work. I should note that I'm basing my views on knowledge of other cloud providers. It could be that the life of a Facebook's data center is different from Amazon, Azure, Google, etc which can be based on factors that don't show up in the statements. If I were on Facebook's data center team, and I had incentive to make decisions in the best interest of the company, I would be thinking about overall cost, longevity of parts, and performance. Increasing the amount of hosted video content, for example, would likely bring up the question of how and where to source the right acceleration solutions. Typically FPGAs are more cost-effective to implement than buying from graphics cards providers because they can be tailored to suit client demand. If/when buying or even designing switches, for example, a simple decision of using more durable materials would yield better returns on investment over time and the switch would depreciate on the statements no different from a wholesale, out-of-the-box solution. In both of these examples, Facebook might get away with equipment depreciation, but the parts far outlast. Link to comment Share on other sites More sharing options...
Liberty Posted May 29, 2018 Share Posted May 29, 2018 Whatsapp payment service may launch in India soon: https://www.livemint.com/Industry/46X6nJ5X47gWryYKVGCLTO/WhatsApp-payment-service-may-launch-in-India-next-week.html (via @Bluegrasscap) Link to comment Share on other sites More sharing options...
Spekulatius Posted May 29, 2018 Share Posted May 29, 2018 Payment is a huge market for any large untapped social network company and I expect FB to get into this in a significant way. I think Visa and MC will be competition eventually. Link to comment Share on other sites More sharing options...
nickenumbers Posted May 29, 2018 Share Posted May 29, 2018 FB is smart, well capitalized, and it is run by a great owner/operator, who happens to be very young and competitive. They have cash coming out of their ears. To hear that they are going to grow an Indian Payment revenue stream just makes me smile.!! I wonder if purchasing Twitter or Snap is in the cards or some other such acquisition. Else, they could just buy or create a competing product and use their cash cow to take over. Something like an Amazon model of assault. I get so excited I want to take of my shoes and wiggle my toes... Link to comment Share on other sites More sharing options...
cameronfen Posted May 29, 2018 Share Posted May 29, 2018 Payment is a huge market for any large untapped social network company and I expect FB to get into this in a significant way. I think Visa and MC will be competition eventually. The big competition is native apps like paytm backed by softbank and alibaba, payU backed by Naspers, Tez by google as well a host of homegrown apps. I think right now visa and mastercard is the least of facebooks worries. This is by no means necassarily low hanging fruit. Although they do have the advantage of being the dominant ott messaging app. Link to comment Share on other sites More sharing options...
LongTermView Posted May 29, 2018 Share Posted May 29, 2018 The March 2018 https://www.bloomberg.com/news/articles/2018-03-13/whatsapp-stirs-up-india-market-with-push-into-digital-payments article says the pilot WhatsApp Pay opened to rave reviews in India. It shows the December 2017 UPI transaction volumes: 52% Google Tez 23% Paytm 15% PhonePe 10% Others Like Liberty and @Bluegrasscap said, the https://www.bloomberg.com/news/articles/2018-05-29/whatsapp-is-said-to-hasten-payments-push-for-200-million-indians article from today is noteworthy: Facebook Inc. is set to offer its WhatsApp payment services to the whole of India as early as next week in an attempt to win market share, even though its partners aren’t all ready, said people familiar with the matter. The messaging app will partner HDFC Bank Ltd., ICICI Bank Ltd. and Axis Bank Ltd. to process the transfers, and State Bank of India will join once it has the necessary systems in place, the people said. Link to comment Share on other sites More sharing options...
cameronfen Posted May 29, 2018 Share Posted May 29, 2018 The March 2018 https://www.bloomberg.com/news/articles/2018-03-13/whatsapp-stirs-up-india-market-with-push-into-digital-payments article says the pilot WhatsApp Pay opened to rave reviews in India. It shows the December 2017 UPI transaction volumes: 52% Google Tez 23% Paytm 15% PhonePe 10% Others Like Liberty and @Bluegrasscap said, the https://www.bloomberg.com/news/articles/2018-05-29/whatsapp-is-said-to-hasten-payments-push-for-200-million-indians article from today is noteworthy: Facebook Inc. is set to offer its WhatsApp payment services to the whole of India as early as next week in an attempt to win market share, even though its partners aren’t all ready, said people familiar with the matter. The messaging app will partner HDFC Bank Ltd., ICICI Bank Ltd. and Axis Bank Ltd. to process the transfers, and State Bank of India will join once it has the necessary systems in place, the people said. I think the big money is in B2P and not P2P. I think it will be relatively easy for FB to win the P2P market with the inborn advantage of whatsapp. But anyone who uses venmo knows Paypal makes no money with venmo basically. The real prize is the B2P which P2P is the natural moat for and that will be much more difficult because having the largest messaging platform is less of an advantage when paying merchants. Link to comment Share on other sites More sharing options...
Liberty Posted May 30, 2018 Share Posted May 30, 2018 Interview with Mike Schroepfer and Sheryl Sandberg (47min at Code conference): Link to comment Share on other sites More sharing options...
Liberty Posted June 4, 2018 Share Posted June 4, 2018 You've probably heard about this: https://www.nytimes.com/interactive/2018/06/03/technology/facebook-device-partners-users-friends-data.html I think there's an interesting nuance to be added: https://newsroom.fb.com/news/2018/06/why-we-disagree-with-the-nyt/ Link to comment Share on other sites More sharing options...
wisowis Posted June 5, 2018 Share Posted June 5, 2018 Apple deploying ITP2 (https://webkit.org/blog/8311/intelligent-tracking-prevention-2-0/) on the iPhone: https://www.theguardian.com/technology/2018/jun/05/apple-escalates-war-against-facebook-but-doesnt-mention-it-at-wwdc This might materially hurt Facebook's revenues (>90% of which is mobile)? Link to comment Share on other sites More sharing options...
wisowis Posted June 6, 2018 Share Posted June 6, 2018 The tension between WhatsApp and Facebook on how to monetize WhatsApp: https://www.wsj.com/articles/behind-the-messy-expensive-split-between-facebook-and-whatsapps-founders-1528208641 Link to comment Share on other sites More sharing options...
Liberty Posted June 6, 2018 Share Posted June 6, 2018 Apple deploying ITP2 (https://webkit.org/blog/8311/intelligent-tracking-prevention-2-0/) on the iPhone: https://www.theguardian.com/technology/2018/jun/05/apple-escalates-war-against-facebook-but-doesnt-mention-it-at-wwdc This might materially hurt Facebook's revenues (>90% of which is mobile)? This will affect all adtech companies. Those that will benefit are those that are relatively stronger than the others and have their own sources of info rather than only third-party tracking. ie. Google and Facebook. Link to comment Share on other sites More sharing options...
cameronfen Posted June 6, 2018 Share Posted June 6, 2018 Apple deploying ITP2 (https://webkit.org/blog/8311/intelligent-tracking-prevention-2-0/) on the iPhone: https://www.theguardian.com/technology/2018/jun/05/apple-escalates-war-against-facebook-but-doesnt-mention-it-at-wwdc This might materially hurt Facebook's revenues (>90% of which is mobile)? This will affect all adtech companies. Those that will benefit are those that are relatively stronger than the others and have their own sources of info rather than only third-party tracking. ie. Google and Facebook. Even if it might benefit Google and Facebook relative to the competition (which I agree with: if you visit a site every 30 days it doesn't effect you as much), it might shrink the entire pie. I don't think this in itself is a huge problem especially for FB at this point. This could be much more damaging to Youtube (Google) as much of their content is embedded in other websites. Also perhaps customers would be fed up by the continuous pop ups which may force Apple to roll back this update (although I assume they have performed some sort of A/B testing). Link to comment Share on other sites More sharing options...
Liberty Posted June 7, 2018 Share Posted June 7, 2018 10-min mini documentary about how FB is thinking about content filtering and the tools it's using. Some interesting stuff on a very difficult problem they have to deal with: https://newsroom.fb.com/news/category/inside-feed/ Link to comment Share on other sites More sharing options...
Jurgis Posted June 14, 2018 Share Posted June 14, 2018 Not directly about FB, but related and I did not want to start a new thread: https://www.theverge.com/2018/6/13/17446660/mozilla-firefox-pocket-recommendations-ceo-nate-weiner-interview-converge-podcast I use Firefox Pocket recos and it's pretty good and interesting. (Some links I posted came from there). Not perfect, but not bad so far. How it works: https://help.getpocket.com/article/1142-firefox-new-tab-recommendations-faq Link to comment Share on other sites More sharing options...
Liberty Posted June 20, 2018 Share Posted June 20, 2018 Instagram hit 1billion users: https://www.cnbc.com/2018/06/20/instagram-is-taking-on-youtube-with-long-form-video.html They hit 800m MAU on September 25, 2017. That’s 25% growth in about 9 months… https://techcrunch.com/2017/09/25/instagram-now-has-800-million-monthly-and-500-million-daily-active-users/ Link to comment Share on other sites More sharing options...
DTEJD1997 Posted July 4, 2018 Share Posted July 4, 2018 Hey all: I wonder if it is my lifestyle or the groups I associate with....but is anybody else noticing an INSANE amount of advertising for Facebook? This has been going on for a few weeks. Before this barrage of advertising, I don't recall EVER seeing advertising for Facebook. All this advertising can't be cheap... Link to comment Share on other sites More sharing options...
wisowis Posted July 16, 2018 Share Posted July 16, 2018 The path to 1000$/share? Courtesy of @hardcorevalue https://www.youtube.com/watch?v=8VnFVs1I8Ik Link to comment Share on other sites More sharing options...
BG2008 Posted July 25, 2018 Share Posted July 25, 2018 Anyone watching the price action and listening to the call? FB is down 25% and trading at $164.7 Link to comment Share on other sites More sharing options...
winjitsu Posted July 25, 2018 Share Posted July 25, 2018 Anyone watching the price action and listening to the call? FB is down 25% and trading at $164.7 Insane. Link to comment Share on other sites More sharing options...
Spekulatius Posted July 25, 2018 Share Posted July 25, 2018 Added some more at $165 and change. Looks like a few people need to change their underwear all of a sudden. Link to comment Share on other sites More sharing options...
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