Facebook stock in freefall! (20% drop in 1-day)

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JakeyLee
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by JakeyLee » Thu Jul 26, 2018 10:13 pm

Wow!! We haven't seen this kind of cheap buying opportunity for Facebook since.. May?? Ha! I love a bunch of index investment guys passing out wisdom for individual stocks. I dunno... Another 20% and maybe I will jump into the fray. Okay, probably not... Now lets get back to arguing about the merits of paying your mortgage off early.

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whodidntante
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by whodidntante » Thu Jul 26, 2018 10:18 pm

JakeyLee wrote:
Thu Jul 26, 2018 10:13 pm
Now lets get back to arguing about the merits of paying your mortgage off early.
With these low rates? Are you crazy? :shock: :P

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willthrill81
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by willthrill81 » Thu Jul 26, 2018 10:19 pm

whodidntante wrote:
Thu Jul 26, 2018 10:18 pm
JakeyLee wrote:
Thu Jul 26, 2018 10:13 pm
Now lets get back to arguing about the merits of paying your mortgage off early.
With these low rates? Are you crazy? :shock: :P
With these low bond yields? Why not? :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

rudeboy
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by rudeboy » Thu Jul 26, 2018 10:45 pm

It's days like this that makes me glad 'I've got the whole world in my hands.'

WanderingDoc
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by WanderingDoc » Thu Jul 26, 2018 10:54 pm

Rick Rock wrote:
Thu Jul 26, 2018 7:37 pm
WanderingDoc wrote:
Thu Jul 26, 2018 5:41 pm
Totally agree. Quit and deactivated fb for the last time in Feb. '18. Nothing but happiness and productivity since. After I heard Zuckerberg speak to Congress, sounding like a toddler, no charisma/presence/confidence this just reaffirmed my decision.
cj2018 wrote:
Thu Jul 26, 2018 1:43 pm
Well, you know this one is coming :) so don't pretend you don't want to have this discussion :D

I personally started using FB around 07/08 in college but quit around 11/12. Never understood its hype and always knew if "the product is free, then you are the product". There's a lot more info out there regarding the impact of too much "social media" so i won't get into that here.

Basically If FB disappears tomorrow, i doubt it will have a huge impact to people's lives and it will be business as usual (advertisers will take a hit but they will find other channels to target consumers). Can't say the same with Apple/Amazon/Google/Microsoft.

From advertiser's perspective, FB certainly built such an addictive and personalized product that it's a dream come true for marketers and FB is raking in billions in ads revenue but the problem i see for them is younger generations' attention span is so short these days they can quickly dump 1 app for another in an instant!

From investor's perspective, what's happening with FB stock today also reminds me why diversification is key and why passive index investing is the way to go for retail investors :sharebeer. Stay the course and watch these market drama on the sideline is fun.
So many comments about FB that detail concerns with the core product without recognizing their successful diversification strategy.

While I agree that the core Facebook product is stale (it's basically devolving into Yahoo), Instagram was an incredible purchase at $1B and continues to thrive, while WhatsApp is now one of the linchpins of global communication (step outside of the domestic box for a bit).

Bullish on long term growth as the company has a hell of a lot of cash to deploy on future platform additions. Half expecting a name change, like Google did with Alphabet, in the near future.

That said, #tsm.
I have never bought an individual stock before. Is Robinhood a good app to start with? I think I started creating an account and stopped halfway through a few months ago.
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by KyleAAA » Thu Jul 26, 2018 10:57 pm

goodenyou wrote:
Thu Jul 26, 2018 9:55 pm
I told my 3 teen/young adult children that Facebook stock dropped considerably today. They all responded with "no surprise, I don't use it anymore and none of our friends do either. It is loaded with junk and ads. It's annoying". I am not a Facebooker, but I wonder if my social media-addicted children and their friends are on to something.
They aren't. FB owns most of the other apps they waste time on, too. FB is deeply embedded in the way people communicate and relate to each other globally in a way no other company can match, not even Google.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by fennewaldaj » Thu Jul 26, 2018 11:34 pm

willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.

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whodidntante
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by whodidntante » Fri Jul 27, 2018 12:27 am

WanderingDoc wrote:
Thu Jul 26, 2018 10:54 pm

I have never bought an individual stock before. Is Robinhood a good app to start with? I think I started creating an account and stopped halfway through a few months ago.
I used Robinhood and I believe I posted my impressions of it here. Overall, not impressed. I ended up transferring my shares to another broker. These days I would use Merrill Edge with Platinum Honors to get perpetual free trades, though a lot of brokers give out free trades like candy for new accounts, or just because you ask them to.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by inbox788 » Fri Jul 27, 2018 1:39 am

nisiprius wrote:
Thu Jul 26, 2018 9:38 pm
Individual stocks do stuff like that.

Now despite all of the alarmist talk about cap-weighting and the way the S&P 500 is dominated by FAANGs and we're putting 18% of our eggs in five baskets etc., let's do some mental math.

Facebook = less than 2% of the market by cap weight.

So a 20% drop in Facebook = less than 20% x 2% = less than an 0.4% drop in the market.

So, if Facebook's fall were the only thing happening, VTI would have dropped 0.4% due to Facebook.

The stock market's daily standard deviation is something like 1%. The stock market normally goes up or down by 1% or more per day. Often more than that.

Here's what it actually looked like. The brownish line is what happened to Facebook. The black line is what happened to my holding of the Vangard Total Stock Market Index fund. Oh, the humanity!

Image
I’m just amazed $120B market cap disappearing doesn’t make a splash in the indices. It’s barely see a blip. That’s like 120 $1B small caps wiped out in a nuclear blast.

Anyone recall Biogen (60-70B market cap) earlier this month gaining 20% on some good news? This is the other side of the same coin, and coincidently, it’s down 10% today.

Those are the risks you take with individual stocks, and you win some and you lose some. If you’re good enough or lucky enough to win most, then more power to you.

FWIW, I till have a few shares (very few) FB remaining from an old brokerage account that I’m keeping for tax reasons. It’s designated for future donation, so I hope they recover and more. Still, I’m not a user, but have a few accounts for limited purposes that I’ve wondered if I’m being counted as an active user. I don’t think I’m active daily, but if I play a game that signs on with facebook id, would that count as activity? If I’m counted as an active user, then I think they’re in big trouble.

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JoMoney
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by JoMoney » Fri Jul 27, 2018 1:54 am

The FB messenger is still a handy way to get a hold of some people and for arranging invites to a small group event. The best parts of FB seem to have migrated over to Instagram. More than a handful of people I was connected to have deleted their account or just abandoned using it. The novelty of Facebook has worn off. I don't post on it all, and when I think about checking up on the people who do use it, or what sort of dialogue I'll get into on it, I get a sense of apprehension.
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by cheapskate » Fri Jul 27, 2018 3:19 am

The fact that user engagement has completely stalled in US/Canada and is actually dropping in Europe is a serious concern for the company. The same network effects that propelled engagement (and therefore ad revenue) ever upward could work on the way down too. Anecdotally, among my friends, usage has dropped pretty significantly (I deleted my accounts a few years ago, and have never missed it). Investors are expecting (hoping) that falling engagement in the core facebook will be offset by Instagram and WhatsApp. Instagram seems mostly suited for the selfie-happy younger crowd, how much older users take to it remains to be seen.

There is significant regulatory risk facing the company too. The recent European privacy regulations can't help facebook at all. I expect other countries to follow suit with regulatory steps as well.

Yes, the company posted 13 Billion in revenues the last quarter and 20 Billion in profits the last year, but the valuation is based on high growth rates.

Elbukari
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Elbukari » Fri Jul 27, 2018 3:42 am

I was under the impression that they didn't meet their quarterly benchmarks? Add that to the recent Facebook scandal and investors start to lose some faith. It's all speculative in the short term though.

I can't image Facebook actually going away. What are you gonna replace it with? Myspace? Nothing?

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by cheapskate » Fri Jul 27, 2018 3:57 am

Elbukari wrote:
Fri Jul 27, 2018 3:42 am
I was under the impression that they didn't meet their quarterly benchmarks? Add that to the recent Facebook scandal and investors start to lose some faith. It's all speculative in the short term though.

I can't image Facebook actually going away. What are you gonna replace it with? Myspace? Nothing?
facebook won't actually go away (after all Yahoo! is still around, as a Verizon company), but if the growth rate stalls, then the stock will be in a heap of trouble. A company with a ~70B revenue stream (and profits of ~20B), growing at say 10% can't command a 500B market cap anymore.

For big tech, it's all about growth, investors are paying ever escalating prices assuming that current rates of growth can at least be sustained.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by z3r0c00l » Fri Jul 27, 2018 4:13 am

MotoTrojan wrote:
Thu Jul 26, 2018 8:45 pm
z3r0c00l wrote:
Thu Jul 26, 2018 7:45 pm
Rick Rock wrote:
Thu Jul 26, 2018 7:37 pm
Instagram was an incredible purchase at $1B and continues to thrive,
It is now valued at $100 billion.
Huh?
The company Instagram was purchased by FB for 1 billion and they turned a 10,000% profit because it is currently valued at 100 billion. That explains a full 20% of the FB market cap. And their core business is 5x more profitable than Amazon. At a PE ratio of about 20, FB is priced more like a blue chip than a tech stock. They also own WhatsApp which has 1.2 billion users making hundreds of millions of calls per day. This is not another Yahoo.

gotester2000
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by gotester2000 » Fri Jul 27, 2018 4:33 am

History tells us that empires rise and fall however strong they maybe - best strategy is diversification - companies live by their bottomline.

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stickman731
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by stickman731 » Fri Jul 27, 2018 4:50 am

jef wrote:
Thu Jul 26, 2018 6:15 pm
Facebook just reported 42% revenue growth to 13.2 billion. I'm not a fan but it certainly doesn't look like the end of the world.
I agree. I read a couple of the analyst reports and it just surprise me how little they know or understand about the math of large numbers.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by z3r0c00l » Fri Jul 27, 2018 5:47 am

One out of every five humans uses Facebook each day.

hightower
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by hightower » Fri Jul 27, 2018 7:13 am

FB's drop yesterday is a great example of why investing broadly is such a winning strategy. Despite FB being a large part of the index funds I invest in (VTSAX for instance), it had very minimal impact on my portfolio yesterday. In fact, mine went up slightly due to rises in REITs, Small Caps, and Mid Caps.
The headlines read that "120 billion in wealth was wiped out" yesterday. But, I kept thinking, "not boglehead wealth."

With regards to FB, they are a bubble IMO. They will disappear eventually. The only thing still keeping them alive is all the old folks who are just now learning to use it, lol.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by hightower » Fri Jul 27, 2018 7:15 am

JoMoney wrote:
Fri Jul 27, 2018 1:54 am
The FB messenger is still a handy way to get a hold of some people and for arranging invites to a small group event. The best parts of FB seem to have migrated over to Instagram. More than a handful of people I was connected to have deleted their account or just abandoned using it. The novelty of Facebook has worn off. I don't post on it all, and when I think about checking up on the people who do use it, or what sort of dialogue I'll get into on it, I get a sense of apprehension.
Exactly. I quit social media entirely 2 years ago (after the 16 election) because of the pure stupidity I had been seeing for years with regards to fake news being spread like wild fire. The election cemented those fears that stupidity would take over and I decided I wanted no part of it. Haven't been back since and I don't miss it one bit. I truly hope everyone else wakes up and gets off of it at some point too. But, there are a lot of hopelessly unaware people in the world unfortunately.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Cycle » Fri Jul 27, 2018 7:19 am

It's not free. My DW spends 30 dollars a month on mobile data for Instagram and Facebook. We're on project fi, so it's pay per MB used. Thats 360/yr. Equal to 50% of my annual transportation costs to work via bus.
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by bgf » Fri Jul 27, 2018 7:38 am

fennewaldaj wrote:
Thu Jul 26, 2018 11:34 pm
willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.
amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Cycle » Fri Jul 27, 2018 7:47 am

Elbukari wrote:
Fri Jul 27, 2018 3:42 am
I was under the impression that they didn't meet their quarterly benchmarks? Add that to the recent Facebook scandal and investors start to lose some faith. It's all speculative in the short term though.

I can't image Facebook actually going away. What are you gonna replace it with? Myspace? Nothing?
Instagram. Most people I know use Instagram primarily. Maybe everyone will just start using bogleheads to post pictures of their exotic food and cute fury friends.
Never look back unless you are planning to go that way

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by CyclingDuo » Fri Jul 27, 2018 8:07 am

Cycle wrote:
Fri Jul 27, 2018 7:47 am
Maybe everyone will just start using bogleheads to post pictures of their exotic food and cute fury friends.
I'm going to guess neither would play quite as well here as they would on FB...

Image

Image
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Cycle
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Cycle » Fri Jul 27, 2018 8:12 am

Im traveling right now and using pay as you go data, so please just describe your puppies and kale salads with text instead of images.
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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Mrmetalpole » Fri Jul 27, 2018 8:18 am

Cycle wrote:
Fri Jul 27, 2018 7:47 am
Elbukari wrote:
Fri Jul 27, 2018 3:42 am
I was under the impression that they didn't meet their quarterly benchmarks? Add that to the recent Facebook scandal and investors start to lose some faith. It's all speculative in the short term though.

I can't image Facebook actually going away. What are you gonna replace it with? Myspace? Nothing?
Instagram. Most people I know use Instagram primarily. Maybe everyone will just start using bogleheads to post pictures of their exotic food and cute fury friends.
The Instagram purchase was widely criticized at the time and it seems to be the hottest, must-use social platform - not sure if the growth rates were broken out or if they are monetizing it very much at this point. That could very much change to re-ignite those growth rates heading into '19/20 and/or off-set the higher Op-ex to help manage this juggernaut. Not saying its a slam dunk, or they don't have challenges, but what big successful company doesn't?

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by pennylane » Fri Jul 27, 2018 8:42 am

i picked more up at the 155 level when the scandal came out.. everyone thought i was crazy.. I picked more up yesterday as soon as the market opened. I'm an indexer but I do have some gambling money allocated and its a buy for me.. $250 price target :sharebeer

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by willthrill81 » Fri Jul 27, 2018 9:54 am

bgf wrote:
Fri Jul 27, 2018 7:38 am
fennewaldaj wrote:
Thu Jul 26, 2018 11:34 pm
willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.
amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
Again, the crazy thing about Amazon to me is their consistently, absurdly tiny profit margins, especially considering their size and reach, yet their sky-high valuation. A lot of people are making very big bets that that will change.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by bgf » Fri Jul 27, 2018 10:07 am

willthrill81 wrote:
Fri Jul 27, 2018 9:54 am
bgf wrote:
Fri Jul 27, 2018 7:38 am
fennewaldaj wrote:
Thu Jul 26, 2018 11:34 pm
willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.
amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
Again, the crazy thing about Amazon to me is their consistently, absurdly tiny profit margins, especially considering their size and reach, yet their sky-high valuation. A lot of people are making very big bets that that will change.
i think its valuation is driven by 1) its potential future pricing power, 2) subscription based model, 3) great ad platform, 4) incredible cloud computing division.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by jeffyscott » Fri Jul 27, 2018 10:34 am

hightower wrote:
Fri Jul 27, 2018 7:13 am
With regards to FB, they are a bubble IMO. They will disappear eventually. The only thing still keeping them alive is all the old folks who are just now learning to use it, lol.
As an old folk, I signed on about 5 years ago and now basically only use it to occasionally communicate with companies, as they sometimes do not have an easy way to contact them via email and I am phone-phobic. The 2016 election and aftermath led to my declining use.

The corporate communication thing was actually the reason I had signed up in the first place, had an issue with a product and had read that this small, new company was much more responsive when contacted via FB...and they were.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by MotoTrojan » Fri Jul 27, 2018 10:49 am

z3r0c00l wrote:
Fri Jul 27, 2018 4:13 am
MotoTrojan wrote:
Thu Jul 26, 2018 8:45 pm
z3r0c00l wrote:
Thu Jul 26, 2018 7:45 pm
Rick Rock wrote:
Thu Jul 26, 2018 7:37 pm
Instagram was an incredible purchase at $1B and continues to thrive,
It is now valued at $100 billion.
Huh?
The company Instagram was purchased by FB for 1 billion and they turned a 10,000% profit because it is currently valued at 100 billion. That explains a full 20% of the FB market cap. And their core business is 5x more profitable than Amazon. At a PE ratio of about 20, FB is priced more like a blue chip than a tech stock. They also own WhatsApp which has 1.2 billion users making hundreds of millions of calls per day. This is not another Yahoo.
Hmm as a casual user I’m shocked insta could be that much of the revenue generation.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by hoops777 » Fri Jul 27, 2018 11:02 am

nedsaid wrote:
Thu Jul 26, 2018 2:25 pm
This is why I didn't chase the high tech and the internet craze in the 1990's and why I don't chase the FAANG stocks today. When expectations for certain companies gets too high, these kinds of things happen.
So are you saying you are glad that you never invested in the FAANG stocks?I sure wish I had because I would have a lot more money....a lot more money :D
K.I.S.S........so easy to say so difficult to do.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by z3r0c00l » Fri Jul 27, 2018 11:43 am

MotoTrojan wrote:
Fri Jul 27, 2018 10:49 am

Hmm as a casual user I’m shocked insta could be that much of the revenue generation.
It isn't yet, but with 1 billion monthly active users, and steady growth, it has potential.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by willthrill81 » Fri Jul 27, 2018 11:48 am

bgf wrote:
Fri Jul 27, 2018 10:07 am
willthrill81 wrote:
Fri Jul 27, 2018 9:54 am
bgf wrote:
Fri Jul 27, 2018 7:38 am
fennewaldaj wrote:
Thu Jul 26, 2018 11:34 pm
willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.
amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
Again, the crazy thing about Amazon to me is their consistently, absurdly tiny profit margins, especially considering their size and reach, yet their sky-high valuation. A lot of people are making very big bets that that will change.
i think its valuation is driven by 1) its potential future pricing power, 2) subscription based model, 3) great ad platform, 4) incredible cloud computing division.
Their cloud computing division actually seems to hold more profit potential than their retail business. It's reported that growth in Prime memberships may decline significantly once the price increases. It's no good serving millions of customers if you can't make much of a profit by doing so. And I have serious doubts as to whether their power will ever increase to the point that they can meaningfully raise their prices. Brick-and-mortar is very far from dead, and Amazon knows this, which is why they bought Whole Foods.

"A bird in the hand..."
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by lukestuckenhymer » Fri Jul 27, 2018 11:53 am

z3r0c00l wrote:
Fri Jul 27, 2018 5:47 am
One out of every five humans uses Facebook each day.
And most of them are in India.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by JoMoney » Fri Jul 27, 2018 12:00 pm

lukestuckenhymer wrote:
Fri Jul 27, 2018 11:53 am
z3r0c00l wrote:
Fri Jul 27, 2018 5:47 am
One out of every five humans uses Facebook each day.
And most of them are in India.
Something close to one in five humans in the world are in India.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by KyleAAA » Fri Jul 27, 2018 12:03 pm

Elbukari wrote:
Fri Jul 27, 2018 3:42 am
I was under the impression that they didn't meet their quarterly benchmarks? Add that to the recent Facebook scandal and investors start to lose some faith. It's all speculative in the short term though.

I can't image Facebook actually going away. What are you gonna replace it with? Myspace? Nothing?
They beat their quarterly benchmarks. The drop is because they gave future guidance that they were basically intentionally going to do things that would probably reduce revenue growth for the sake of privacy. Note I said reduce revenue growth, not revenue. They will still grow, just more slowly. But when you have a high valuation, slower growth is a big deal.
Last edited by KyleAAA on Fri Jul 27, 2018 12:16 pm, edited 1 time in total.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by MotoTrojan » Fri Jul 27, 2018 12:03 pm

z3r0c00l wrote:
Fri Jul 27, 2018 11:43 am
MotoTrojan wrote:
Fri Jul 27, 2018 10:49 am

Hmm as a casual user I’m shocked insta could be that much of the revenue generation.
It isn't yet, but with 1 billion monthly active users, and steady growth, it has potential.
Hmm without it contributing revenue directly where did you get the $100B valuation? Not following but I didn't dig into the earnings.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by cheapskate » Fri Jul 27, 2018 12:06 pm

lukestuckenhymer wrote:
Fri Jul 27, 2018 11:53 am
z3r0c00l wrote:
Fri Jul 27, 2018 5:47 am
One out of every five humans uses Facebook each day.
And most of them are in India.
This !

WhatsApp is most popular in India. I, for one, am extremely skeptical that facebook can monetize WhatsApp users in India effectively. I think it is going to be a challenge monetizing WA users elsewhere too.

facebook's most lucrative users are in the US and Canada. Growth in both countries has flatlined (and users in Europe is declining). The hope is that Instagram will pick up the loss in users incurred by facebook. But that is hardly a given - 40, 50 and 60 year olds don't walk around with selfie sticks clicking every second and uploading to Instagram.

Add in the issues with - fake news/manipulation by bad actors/the selling or just handing over of user data/regulatory pressures - and significant risk emerges.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by jwaxjwax » Fri Jul 27, 2018 12:17 pm

Unlike many here, I do believe in allocating a small % (around 5-8%) to riskier investments such as individual stocks. So I did buy FB yesterday when it was down 20%. Only time will tell how that works out. I think the hardest part about individual stocks is knowing when to sell since it's unclear whether Facebook will even be around in 40 years, while VTSAX (or a similar index fund) will be.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Cycle » Fri Jul 27, 2018 12:28 pm

willthrill81 wrote:
Fri Jul 27, 2018 11:48 am
It's reported that growth in Prime memberships may decline significantly once the price increases.
We dropped Prime this year, after being long time subscribers. Simply not worth it with so many alternatives.
Never look back unless you are planning to go that way

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by garlandwhizzer » Fri Jul 27, 2018 12:32 pm

willthrill81 wrote:
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.
1+

Facebook has real and growing profits and considerable cash on hand in addition to having a good convincing story. The fundamental underpinning for Amazon and Tesla's sky high valuations is essentially nothing but a story, completely separate from traditional measures like profits, free cash flow, dividends, book value, etc.. If I had to consider buying high flyers I would consider Facebook, Apple, and Google than Amazon and Tesla, both of which I believe to be living on hype and extremely vulnerable. I don't do stock picking at all any more, having learned the hard way, and prefer broadly based low cost indexes. Facebook's recent problems underscore specific stock risk which is separate from and greater than total market risk. A lot of people have gotten rich loading up on concentrated portfolios of FANGS, MOM driven LCG. It's important to remember that a lot of people can get a lot poorer quickly with this strategy as Facebook demonstrates. The MOM express train runs both ways.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Cycle » Fri Jul 27, 2018 12:36 pm

Like many on here, I believe in allocating all funds (aside from short term espp) in the 3 fund. The returns are good enough. I was in target fund 2050 from 2007-2017. Now I mimick that AA in my 3-fund.

That target fund would obviously do worse than investing solely in FAANG stocks, but it still did rediculously well... Probably better than most hedge funds and stock pickers, and with lower risk. The next Facebook is not Facebook.
Never look back unless you are planning to go that way

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by nisiprius » Fri Jul 27, 2018 12:39 pm

At the moment, I'm hooked on Facebook. I wouldn't see a tenth as many pictures of my grandkids without it. A local Facebook group in my town is my go-to for advice on restaurants, etc. I dislike Facebook. I ought to delete it. I've been burned about six times now by Facebook constantly doing things that default me into having less privacy than I thought I had, until I find some obscure new setting buried six clicks deep on some obscure settings page.

But I use it and won't seriously consider deleting my account... yet.

One of the things that puzzles me the most about it is that from a software usability standpoint it is just so bad. It is practically impossible to find anything that's more than a day old, for example. And it doesn't seem to be possible to print out a single posting in some clean, simple, easy way. I can't figure out if this "by design" or just "bad design."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Maverick3320 » Fri Jul 27, 2018 12:44 pm

willthrill81 wrote:
Thu Jul 26, 2018 9:52 pm
I'm surprised people are downing Facebook. Their net income was $20.2 billion last year, more than triple what it was in 2015.

Amazon's net income last year was just $4.1 billion, yet their market cap is 72% higher than Facebook's.

A lot of people are banking a lot on the hopes that Amazon will eventually turn a significant profit. But more than 20 years in, it hasn't happened yet.
If I had to guess, it would be because Amazon is playing an extremely long game in a lot of different, very valuable, markets. Facebook was playing the long game, but their key metric would seem to be # of users. When that starts to plateau, what's the long game?

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by corpgator » Fri Jul 27, 2018 12:48 pm

willthrill81 wrote:
Fri Jul 27, 2018 11:48 am
bgf wrote:
Fri Jul 27, 2018 10:07 am
willthrill81 wrote:
Fri Jul 27, 2018 9:54 am
bgf wrote:
Fri Jul 27, 2018 7:38 am
fennewaldaj wrote:
Thu Jul 26, 2018 11:34 pm


Yeah facebooks valuation seems more or less reasonable. I just can't wrap my head around Amazons valuation.
amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
Again, the crazy thing about Amazon to me is their consistently, absurdly tiny profit margins, especially considering their size and reach, yet their sky-high valuation. A lot of people are making very big bets that that will change.
i think its valuation is driven by 1) its potential future pricing power, 2) subscription based model, 3) great ad platform, 4) incredible cloud computing division.
Their cloud computing division actually seems to hold more profit potential than their retail business. It's reported that growth in Prime memberships may decline significantly once the price increases. It's no good serving millions of customers if you can't make much of a profit by doing so. And I have serious doubts as to whether their power will ever increase to the point that they can meaningfully raise their prices. Brick-and-mortar is very far from dead, and Amazon knows this, which is why they bought Whole Foods.

"A bird in the hand..."
The AWS side bankrolls the retail side where they are trying to the tried and true walmart method of putting everyone out of business by undercutting prices, although they aren't often the cheapest anymore now that you have to pay sales tax. If they split off AWS by itself, it would be insanely profitable.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by willthrill81 » Fri Jul 27, 2018 1:57 pm

corpgator wrote:
Fri Jul 27, 2018 12:48 pm
willthrill81 wrote:
Fri Jul 27, 2018 11:48 am
bgf wrote:
Fri Jul 27, 2018 10:07 am
willthrill81 wrote:
Fri Jul 27, 2018 9:54 am
bgf wrote:
Fri Jul 27, 2018 7:38 am


amazon's scale is immense. it singlehandedly altered an entire generation of consumer expectations, wants, and needs. tiny tiny changes in inputs will have huge impact on earnings and cash flow. also, AWS. it isn't an easy company to analyze and value, and im certainly not capable of it. i have heard enough people who know what they are talking about discuss amazon in an intelligent manner, and i dont think its absurdly valued. and it is definitely not comparable to like a tesla.
Again, the crazy thing about Amazon to me is their consistently, absurdly tiny profit margins, especially considering their size and reach, yet their sky-high valuation. A lot of people are making very big bets that that will change.
i think its valuation is driven by 1) its potential future pricing power, 2) subscription based model, 3) great ad platform, 4) incredible cloud computing division.
Their cloud computing division actually seems to hold more profit potential than their retail business. It's reported that growth in Prime memberships may decline significantly once the price increases. It's no good serving millions of customers if you can't make much of a profit by doing so. And I have serious doubts as to whether their power will ever increase to the point that they can meaningfully raise their prices. Brick-and-mortar is very far from dead, and Amazon knows this, which is why they bought Whole Foods.

"A bird in the hand..."
The AWS side bankrolls the retail side where they are trying to the tried and true walmart method of putting everyone out of business by undercutting prices, although they aren't often the cheapest anymore now that you have to pay sales tax. If they split off AWS by itself, it would be insanely profitable.
But remember that Walmart's success was due to having an incredibly low cost, efficient supply chain, which enabled them to reduce their prices below that of their competitors. And now they have huge purchasing economies as well. I don't think that's what Amazon is trying to do.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Pajamas » Fri Jul 27, 2018 3:12 pm

Facebook was down much less than the NASDAQ today, on a percentage basis, confirming that it's not in free fall.
goodenyou wrote:
Thu Jul 26, 2018 9:55 pm
I told my 3 teen/young adult children that Facebook stock dropped considerably today. They all responded with "no surprise, I don't use it anymore and none of our friends do either. It is loaded with junk and ads. It's annoying". I am not a Facebooker, but I wonder if my social media-addicted children and their friends are on to something.
Ask them about Instagram and WhatsApp because Facebook owns those. Oculus, too.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by goodenyou » Fri Jul 27, 2018 4:48 pm

Pajamas wrote:
Fri Jul 27, 2018 3:12 pm
Facebook was down much less than the NASDAQ today, on a percentage basis, confirming that it's not in free fall.
goodenyou wrote:
Thu Jul 26, 2018 9:55 pm
I told my 3 teen/young adult children that Facebook stock dropped considerably today. They all responded with "no surprise, I don't use it anymore and none of our friends do either. It is loaded with junk and ads. It's annoying". I am not a Facebooker, but I wonder if my social media-addicted children and their friends are on to something.
Ask them about Instagram and WhatsApp because Facebook owns those. Oculus, too.
I will. I think they are addicted to those so the stock is safe, I believe. Just don’t know how much of the revenue from the parent company is from Facebook itself and how it will affect earnings. I only own because I own index funds.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by Engineer250 » Fri Jul 27, 2018 6:36 pm

Cycle wrote:
Fri Jul 27, 2018 8:12 am
Im traveling right now and using pay as you go data, so please just describe your puppies and kale salads with text instead of images.
This forum is my go to when I have bad cell reception. I know I can open a thread and just read a page without having to load a bunch of gifs, images, or ads.

That said, FB’s demographic already skews old. The young kids now never used it, and even millennials like myself often never got into it, or stopped using it. I know guys I work with in their 50s who use Instagram though, and plenty of younger folks.

I am old school and would rather invest in a company that “makes something”. Like rather invest in Tesla any day than an ad or service based company like Facebook. I remember ribbing colleagues who got in on FB their IPO and watched it drop from what they bought it at. I think it is up like 400% from that now. So probably my opinions shouldn’t be trusted.
Where the tides of fortune take us, no man can know.

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Re: Facebook stock in freefall! (20% drop in 1-day)

Post by pwill112 » Fri Jul 27, 2018 7:39 pm

Instagram has much less functionality than Facebook but Instagram is now where the kids are going? Just seems like a cycle of the way FB started.
Last edited by pwill112 on Fri Jul 27, 2018 11:24 pm, edited 1 time in total.

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