Facebook, Inc (NASDAQ:FB) Continues to Illustrate FB Stock’s Value With Events

- October 7, 2016

Days after Facebook, Inc (NASDAQ:FB) decided to take on eBay (NASDAQ:EBAY) with its Marketplace launch, Mark Zuckerberg & Co is spinning off another asset, Events. As Facebook’s vision becomes clearer with Marketplace, the Messenger Platform, and now Events among others, there is no question FB stock is worth its seemingly overvalued price.

Facebook: A combination of valuable networks

In technology, network size and ecosystems mean everything. In theory, you can find ways to monetize a large network, but turning an idea into a large network is a different story. That’s why Pinterest has an $11 billion valuation with over 100 million MAUs, or why Snapchat has a $25 billion valuation with 150 million people using it everyday. Hell, throw Facebook’s $20 billion plus purchase of WhatsApp into the mix.

Nevermind that none of these networks have great monetization practices in place. Investors know that monetization will come with a massive network that people use.

Yes, the $370 billion market capitalization that FB stock supports is on a different level, but that’s only because Facebook continues to prove it is not just one big network. Instead, it is a collection of enormous networks that can be spun off as individual properties. It’s this fact that creates enormous potential for creating long-term revenue and profits.

Facebook Events rolls out to iOS

With that said, Facebook Events can now be found on iOS, and will soon be available on Android. In a blog post, Facebook says “whether you’re looking for something to attend this weekend or just wondering what’s happening in your area, Events will help you get there.”

This is a service that has been around for years on Facebook, but it was always combined with the larger platform. Therefore, users did not notice they were using it. However, 100 million people use it everyday, and 650 million every month! That is incredible usage, and what’s remarkable is that Facebook will spinoff Events and never miss a beat on “Facebook”.

Instead, Events instantly becomes the most used and most popular local services and events App. It takes a bite out of Yelp, Google, and maybe even TripAdvisor. Furthermore, Events instantly creates value for Facebook and gives it even more ownership of your smartphone.

FB stock looks like a good bet

Keep in mind, Facebook already controls the majority of the time you spend on smartphones and tablets. Its Facebook, Messenger, Instagram, and WhatsApp apps are all among the most used on iOS and Android. Events has the potential to quickly join that list.

Lastly, it creates value by allowing event sponsors, local businesses, and organizations to reach people in local markets, to inform the public of coming events. It instantly becomes easier and more effective to promote concerts, county fairs, sports events, marathons, and everything in between.

All things considered, FB stock may seem overvalued at $129/share. However, with its explosive growth and the likelihood for accelerated ad growth as it spins off successful services, paying 25x next year’s earnings for FB stock does not seem like a bad idea long-term.

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  1. By Emagrecer Rapido on June 29, 2017 at 10:33 am

    Emagrecer Rapido

    Facebook, Inc (NASDAQ:FB) Continues to Illustrate FB Stock’s Value With Events

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