Tag: facebook

Extreme Bearishness

Facebook, recently rebranded as Meta Platforms Inc. (FB), is down 52% from its September 2021 high and now sits at a 52-week low. The recent downturn came after the company reported its quarterly earnings back in February. The stock downturn was related to capital investment in its metaverse initiatives, concerns from growing competition via Snap and Tik Tok, and the ongoing privacy changes by Apple.

Meta is placing the future of the company’s growth and end markets in the metaverse space. Meta’s collective platforms via Facebook, Instagram, WhatsApp, and Oculus will continue to drive growth while the metaverse is built out and overlaid across these platforms. The recent 50% reduction in the company’s valuation places Meta in very inexpensive valuation territory and, relative to its technology peers, one of the cheapest high-growth stocks. With a firm pivot towards future end markets via the metaverse along with its social media prowess, its valuation is very appealing at this juncture.

Wall Street’s Bullish Sentiment

Analysts across the board are seeing the current levels as a very attractive point to accumulate Meta shares for long-term appreciation. KeyBanc Capital Market’s Justin Patterson, “Meta still offers attractive returns right now to investors, and there isn’t much downside from these levels,” “payoff potential for Meta is really good provided they can execute its plans to grow the Metaverse.” “Meta has historically managed these transitions before and come out stronger,” Patterson wrote. Continue reading "Reconciling Meta's 50% Sell-Off" →

The legacy Facebook branding has been officially decommissioned as the company looks to the future with the metaverse in its sights. As such, the newly branded company is conveniently called Meta Platforms Inc. (FB), thus firmly placing the company's future in the metaverse space. Albeit its social media properties will still be vital to the company, Meta believes that its future will be in the metaverse. This rebranding comes at a pivotal time after a string of public relations debacles stretching over several years. The underlying stock has been beaten up over the past month, falling from $384 to $312 or 19% from its 52-week high. This double-digit decline places Meta in very inexpensive valuation territory relative to its technology peers, and it's one of the cheapest high-growth stocks. With a firm pivot towards future end markets via the metaverse along with its social media prowess, its valuation is very appealing at this juncture.

Figure 1 – Facebook’s rebranding and new Meta logo that reflects the company’s new direction into the metaverse

The Metaverse

Meta strives to be a leader in the nascent metaverse, the intersection of virtual reality, augmented reality, three-dimensional video environment, and an all-encompassing virtual environment. It's a combination of multiple elements of technology, including virtual reality, augmented reality, and video, where users "live" within a digital universe. Supporters of the metaverse envision its users working, playing, and staying connected with friends through everything from concerts and conferences to virtual trips around the world. Mark Zuckerberg estimates it could take five to ten years before the key features of the metaverse become mainstream. But aspects of the metaverse currently exist. Ultra-fast broadband speeds, virtual reality headsets, and persistent always-on online worlds are already up and running, even though they may not be accessible to all. Continue reading "Facebook's Evolution - The Metaverse" →