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Cutting Through the Fog of War on Facebook, Inc. Common Stock (NASDAQ:FB) Shares

Facebook, Inc. Common Stock (NASDAQ:FB) has been a tough story to pin down in terms of narrative. The company has been so widely covered from an “ethics” standpoint or a political standpoint that its difficult to wrap your arms around the narrative of its fundamentals as a publicly traded stock.

Certainly, the sense of a negative light from Cambridge Analytica and Definers permeates the story to some extent. But, quite frankly, the stock’s chart is going to evolve on the basis of future estimates of its growth in users and time spent on the platform. And people do all sorts of things they say they don’t like. Perhaps FB is evolving into something like a tobacco company on the world stage of the stock market.

Facebook, Inc. Common Stock (NASDAQ:FB) doesn’t grow tobacco or market cigarettes. We are not implying as such. But it may be something people increasingly see as a vice — and yet, do it anyways.

It’s no longer “cool” to say you spent a lot of time on FB yesterday, or that you have 5000+ FB “friends”.

Those things used to be cool. Now, they suffer from both a sense of laziness or social ineptness and a recently added sense of political incorrectness. This latter quality is something like littering or having a brutal carbon footprint. The former sense is something like binge-drinking or willful obesity through donut-addiction.

So, to tell your friends you spent all day yesterday on FB may be a bit like saying you spent all day yesterday polluting your local waterways, binge-drinking box wine, devouring two-dozen Boston Cream Pies, and single-handedly bringing about the extinction of the blue-bellied sandpiper. But people will still spend that same time on FB.

All that said, here are the facts: The company is still growing at almost 35% AFTER getting over a quarter of the world’s population on board. That’s ridiculous.

And they still don’t have a single viable competitor.

The time spent on FB may be sliding from a second-derivative point of view. But they still have an enormous platform from which to make new and remarkable things happen.

They control one of the biggest microphones in the world. The value of that type of podium is far more than its current market cap if the folks at the helm are able to take a deep breath and creatively make use of it to the benefit of the company’s shareholders.

The sky is probably still the limit, and we currently have an exceptional trough in terms of sentiment on FB shares. The next step is likely going to be quite interesting.

 

Satellite View

Facebook, Inc. Common Stock (NASDAQ:FB) bills itself as a company that provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide.

Its products include Facebook Website and mobile application that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing visual stories through photos, videos, and direct messages; Messenger, a messaging application to communicate with other people, groups, and businesses across various platforms and devices; and WhatsApp, a mobile messaging application.

The company also offers Oculus virtual reality technology and content platform, which allows people to enter an immersive and an interactive environment to train, learn, play games, consume content, and connect with others. As of December 31, 2017, it had approximately 1.40 billion daily active users.

While Facebook has lost some of its luster, Instagram has made up for it, becoming the most popular social media service in the US. What’s more, WhatsApp has essentially replaced SMS in most of the world. At the same time, the Messenger app has higher daily messaging volume than SMS did at its peak. So it seems that investors are looking past the near-term headwinds given the company’s dominant market position in messaging and social media.

Facebook, Inc. Common Stock (NASDAQ:FB) generated sales of $13.7B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 3.7% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($41.2B against $5.5B).

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