FB (Update)

Facebook Inc.

TMT


Presented:04/16/2014
Price:$59.72
Cap:$153.00B
Current Price:$586.27
Cap:$1,483.16B

Presented

Date04/16/2014
Price$59.72
Market Cap$153.00B
Ent Value$142.14B
P/E Ratio71.95x
Book Value$12.99
Div YieldN/A
Shares O/S2,563.90M
Ave Daily Vol64,830,000
Short Int1.61%

Current

Price$586.27
Market Cap$1,483.16B
Facebook, Inc. operates as a social networking company worldwide. It provides a set of development tools and application programming interfaces that enable developers to integrate with Facebook to create mobile and Web applications. The company’s products include Facebook mobile app and Website that enable people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Messenger, a mobile-to-mobile messaging application available on iOS and Android phones; and Instagram, a mobile app and Website that enable people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends. As of December 31, 2013, it had 1.23 billion monthly active users. Facebook, Inc. was incorporated in 2004 and is headquartered in Menlo Park, California.

Please note, this is an update to LONG — Facebook, Inc. (FB), which was originally presented on 11/13/13.

Highlights

The presenter remains long shares of Facebook (FB) and sees the potential for shares to continue to rise as pricing benefits from an ad format mix shift. Advertisers continue to generate higher ROIs, starting from low base; and, while that piece of the thesis has played out and the market now realizes ROIs on FB are solid, the Street appears to be modeling a steep deceleration in pricing going from 2014 into 2015. This makes for an attractive set up, as the core drivers are still in place and the market thinks the mix shift has happened. Shares are up modestly year-to-date; however, the stock was in the low $70s in early March and is now in the high-$50s.

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Idea Discussion

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