Quick thoughts on FB Meta platforms

3 févr. 2022

I did not have a position in FB and I am not considering a position in FB at this time.

I wanted to jot down some thoughts as I had been thinking about FB all day. The question was, is it a good opportunity now, or is there more trouble coming.

When you invest into FB now, you have to understand what you are investing into: This can be divided into two separate businesses:

The Core FB business:

The core business itself, including FB, Instagram, and whatsapp.

Growth has stalled. The core business did not grow over the last 2 years, and 2021 has seen a reduction in the overall daily users of FB.
Revenue did grow, however, revenue grew from increased sales using existing customers, and not from growing daily users.

I do not personally see the core business ever 'going away.' FB, Instagram and Whatsapp are never gona disappear. However, I belive that it will go down over time. That is, it will go down significantly over the next 10-15 years. Young people are not getting on these platforms the way they used to.

Facebook knows this, and as such, you can say they are "spinning off" the core business into the new business "meta"



The meta platform:

Meta is a brand new business being built from scratch. Can it be built? Will it work out?
FB is talking about losses going 10 to 15 years out in the future to spin the core business into the new platform.

In my opinion, and in order for investors to really get multiples of their investments, the time horizon for investing into FB at these levels has to be in excess of the time Meta platform is built (a holding period of 10-15 years if you want to see 5x or 6x for an example.)

Earnings are going to suck (in my opinion) for FB over the next few years.

The question is, will Meta really succeed in the end?

If YOU think that Meta will succeed AND if you are willing to own a part of FB and deal with the up's and downs and hold for a long time. This could be a good place to start a small position, and consider that you may have to price average a lot in the future.

In my case

I absoloutely love Instagram. I will propably always own it because I have a photography 'hobby' and I like Instagram quiet a lot. I will always be on it. Instagram is unrivalled as a photo sharing buisness. But I think for most people who are on it as a social platform, it WILL be dying out over time. And one day, Instagram will be like Facebook the social platform itself.

New generations are not getting on Facebook. Period.

And where as The core buisness will be declining over time. I have to have faith in Meta.

While meta may turn out to be a success for others, I do not personally believe in it. I do not personally see it being sucessful.

I do not see buisnesses or employers allowing people to go to work from a VR headset on a fake map on a computer. I do not see people buying from the meta universe "stores" when they can buy online. I do not see it.

And I also think it is not good for humanity that people are getting even more and more entangled with their computers. Finally, I am not in a position where I am willing to invest for 10-15 years for a ROI that I belive can be found in other stocks that are more predictable and easy to understand.

Simply put, I really don't understand the Meta universe or why someone may think it will be a thing. What am I missing?!