Thu, Feb. 19, 2:00 PM
- Two months after Citi valued Instagram at $35B, Cowen's John Blackledge has assigned a $33B valuation to the photo/video-sharing platform.
- Blackledge: "Instagram is a valuable asset for FB given its large, fast-growing and highly engaged user base that's drawing significant advertiser interest per our recent social user and ad buyer surveys." He sees Instagram's MAU count (recently topped 300M) rising to 680M by 2020, and notes 72% of its users are aged 18-44.
- With Blackledge valuing Facebook Messenger at $10.5B and taking WhatsApp's $22B acquisition price at face value, he sees 23%-36% upside for Facebook's valuation on a sum-of-the-parts basis. For now, his target remains at $91.
- The note comes in a week that has seen Bloomberg report Snapchat could be valued at $19B in a new funding round, and the WSJ report Pinterest is seeking an $11B valuation in a new round.
- Separately, during a recent conference talk, Facebook product chief Chris Cox stated his company is working on virtual reality apps (presumably for Oculus' platform) and that Facebook is talking with publishers about getting them to fully publish (rather than just excerpt/link to) their content on Facebook, in exchange for a revenue cut.
- Shares are closing in on $80, a level they haven't seen since December.
Dec. 22, 2014, 10:47 AM
- Facebook (FB +2.4%) has surpassed its Oct. 28 all-time high of $81.16, made shortly before the company sold off in response to the conservative Q4 guidance and aggressive 2015 spending forecast provided with its Q3 beat.
- Shares are up 49% YTD vs. a 14% gain for the Nasdaq. They now go for 43x 2015E EPS and 13x 2015E sales.
- Last Friday: Citi values Instagram at $35B
Dec. 16, 2014, 3:59 PM
- Internet stocks have posted substantial losses after a morning market rally proved short-lived. The Nasdaq is down 1.2%.
- In addition to Google, which has made new 52-week lows, Facebook (FB -3%), Twitter (TWTR -4.7%), Amazon (AMZN -3.5%), and Netflix (NFLX -3.2%) are among the underperforming names. Other decliners: Z -5.5%. TRLA -5.4%. MELI -5.4%. ZNGA -4.9%. ZU -3.2%. ANGI -3.4%.
- The selloff comes even though Goldman upgraded its rating for the sector to Attractive from Neutral today. The firm noted Internet stocks are collectively down 16% over the last 12 months (maybe 18%-19% after today), and that forward EV/EBITDA multiples have contracted significantly.
- Internet/social media ETFs: FDN, PNQI, SOCL
Nov. 26, 2014, 12:58 PM
- Facebook (FB +2.1%) and Twitter (TWTR +2.6%) are rallying on a sleepy pre-Thanksgiving trading day. The companies have respectively seen 21.9M and 16.1M shares traded thus far vs. 3-month averages of 38.3M and 28.1M.
- Several other Internet stocks (both U.S. and Chinese) are also moving higher. Z +2.3%. TRLA +3%. BITA +5.1%. EJ +6.7%. SFUN +2.6%. VIPS +3.3%. SOHU +2.9%.
- Facebook is at its highest levels since selling off in late October due to its Q4 revenue and 2015 spending guidance.
Nov. 17, 2014, 11:09 AM
- LinkedIn (LNKD -4%) is seeing profit-taking after the FT reported Facebook (FB -0.7%) is planning to launch a business-focused version of its core service that will support separate work accounts and feature collaboration tools. Enterprise social networking software vendor Jive (JIVE -5.9%) is also selling of.
- Salesforce (CRM -1.5%), whose Chatter business social networking platform has seen strong growth, is off moderately. The Nasdaq is down 0.4%.
- Facebook's service will be able to lean on the company's 1.35B-strong active user base, as well as its very high Web and mobile app engagement rates (much higher than LinkedIn's).
- At the same time, the offering will have to contend with corporate wariness towards Facebook (due to Facebook's historical consumer focus and reputation as a productivity-killer), as well as LinkedIn's established base of professional accounts (332M at the end of Q3) and the popularity of business social networking tools from the likes of Jive, Salesforce, Microsoft, and IBM.
Oct. 29, 2014, 9:15 AM
Oct. 29, 2014, 7:56 AM
- Buy the dip, says Needham's Laura Martin, noting the company's focus on the long-term on the earnings call is giving investors the jitters about the short-term. The upped expenses guidance for FY2015, she says, suggests Facebook (NASDAQ:FB) will be reinvesting profits in longer-term opportunities.
- "Facebook’s execution continues to be strong and we believe very few companies in the world have the reach, the audience engagement and the monetization opportunity that Facebook has in front of it today," says Sterne Agee's Arvind Bhatia, reiterating a Buy rating and $85 price target.
- Similar sentiments are voiced by Goldman, Cowen, Susquehanna, Evercore, and SunTrust.
- Shares -7.7% premarket
- Last night's earnings coverage
Oct. 28, 2014, 5:35 PM
- Facebook (NASDAQ:FB) guides on its Q3 CC for Q4 revenue to be up 40%-47% Y/Y; that's in-line with a consensus of 44.7% growth, and slightly below at the midpoint.
- The company now expects 2014 GAAP costs/expenses to rise 45%-50% (boosted by WhatsApp stock compensation expenses), up from a prior outlook of 30%-35%. It also forecasts non-GAAP spending will rise 50%-70% Y/Y in 2015 - CFO Dave Wehner calls 2015 a "significant expense" year.
- Live blogs: I, II
- Q3 results, details
Oct. 15, 2014, 4:45 PM
- Internet stocks are selling off in AH trading as Netflix craters in response to its light Q3 subscriber adds and disappointing Q4 guidance, and eBay slumps after providing weak Q4 guidance and reporting only 6% Y/Y Q3 Marketplaces growth.
- Google (NASDAQ:GOOG) -1.6% AH. Facebook (NASDAQ:FB) -1.5%. Amazon (AMZN - taking share from eBay) -2.8%. Twitter (NYSE:TWTR) -1.9%. LinkedIn (NYSE:LNKD) -4.2%. YELP -1.4%.
- Internet ETFs: FDN, PNQI, SOCL
Jul. 29, 2014, 4:37 PM
- Facebook (NASDAQ:FB) +0.9% AH, LinkedIn (NYSE:LNKD) +2.1% AH, YELP +2.7%, and Twitter shareholder GSV Capital (NASDAQ:GSVC) +4.8% after Twitter skyrockets AH thanks to a big Q2 beat (moreso on revenue than EPS), strong Q3 guidance, and better-than-expected MAU growth.
- Yelp is due tomorrow, LinkedIn on Thursday, and GSV on Aug. 7. Facebook posted strong Q2 numbers of its own last week.
Jul. 24, 2014, 10:37 AM
- "We think 2Q represents further validation that Facebook (FB +5.5%) can continue to drive mobile ad revenue growth through better ad targeting, relevancy and quality, and through continued growth in advertiser demand in its ad auction," writes JPMorgan, bullish as ever following Facebook's Q2 beat.
- Needham estimates Facebook now "accounts for $1 of every $5 ad dollars spent on mobile devices." SunTrust observes the Q2 growth came in spite of little or no revenue from a slew of long-term initiatives, including video ads, Instagram, Buy button ads, WhatsApp/Oculus, and the mobile ad network.
- Jefferies makes a similar point. It adds Facebook's "ever-deepening ties" to e-commerce leave it well-positioned to "capitalize on strong holiday shopping trends." Others are encouraged by Mark Zuckerberg's CC remarks (transcript) about future payments integration for Messenger, and his claim that the average U.S. user spends 40 minutes/day on Facebook.
- Shares are making new highs, and now trade at a steep 12x 2015E sales. Revenue estimates should rise some in response to the Q2 numbers.
- Prior Facebook earnings coverage
Jul. 24, 2014, 9:18 AM
Jul. 23, 2014, 6:30 PM
- Facebook (NASDAQ:FB) will make efforts to accept more payments on its platform, says Mark Zuckerberg on the Q2 CC following a question about Facebook's Buy button and related payments tools (still in testing). However, he adds advertising (92% of Q2 revenue) will remain the company's main business.
- Zuck also reiterates (in spite of Facebook's efforts to grow public sharing) creating private spaces for users remains a core objective. He states Messenger (now run by ex-PayPal chief David Marcus) will play a pivotal role in furthering this goal. WhatsApp presumably will also play a role.
- New CFO David Wehner states Facebook's ad prices effectively more than doubled Y/Y due to a shift towards more costly news feed/mobile ads (improved targeting also didn't hurt). This enabled ad sales to rise 67% in spite of a 25% drop in ad impressions.
- Sheryl Sandberg notes the acquisition of video ad tech platform LiveRail will further Facebook's ad network ambitions; the company just recently launched its mobile ad network. She also declares marketers are getting more creative with Facebook campaigns, comparing them to TV campaigns in the process.
- Facebook now has 399M mobile-only MAUs (30% of all MAUs). North America made up 44% of Q2 revenue, down from 47% in Q1. North American ARPU ($6.44) still dwarfs Facebook's global ARPU ($2.24).
- Live blogs: I, II, III.
- Prior Facebook earnings coverage
Jul. 23, 2014, 4:19 PM
- Facebook's (NASDAQ:FB) ad revenue rose 67% Y/Y in Q2 to $2.68B; Q1 growth was 82%. Mobile ad sales made up 62% of ad revenue, up from 59% in Q1 and 41% a year ago. Payments/other fees revenue rose 9% Y/Y to $234M.
- Monthly active users (MAUs) +3% Q/Q and +14% Y/Y to 1.32B. Daily active users +3% Q/Q and +19% Y/Y to 829M. Mobile MAUs +6% Q/Q and +31% Y/Y to 1.07B (81% of total MAUs).
- GAAP costs/expenses +22% Y/Y to $1.52B, a slowdown from Q1's 26% and Q4's 37%. R&D spend +43% to $492M, sales/marketing +33% to $358M.
- Free cash flow was $872M, below net income of $1.09B. $469M was spent on capex.
- FB +0.1% AH. Q2 results, PR, slides (.pdf).
May. 1, 2014, 12:26 PM
- Yelp's Q1 report, which was accompanied by a full-year guidance hike and followed by a slew of upgrades, is helping fuel a major rally in high-beta Internet stocks that were pummeled over much of March and April.
- LinkedIn (LNKD +5.5%), which reports after the close and entered trading down 40% from a high of $257.56, is among the notable gainers. As are Twitter (TWTR +3.5%), crushed yesterday in response to its Q1 numbers and guidance, and Pandora (P +6.5%), hit hard last Friday due to the light Q2 guidance provided with a Q1 beat.
- Facebook (FB +3.5%), less damaged by the selloff than some peers, is posting solid gains as the Street gives a thumbs-up to yesterday's mobile ad network launch. "Facebook is essentially bringing the high advertising ROI and targeting precision it has perfected on its own app to the rest of the mobile web," proclaims Goldman, albeit while cautioning near-term sales will be limited.
- Netlifx (NFLX +5.5%), off 30% from its high going into trading in spite of a positive response to last week's Q1 beat and price hike announcement, is bouncing strongly.
- Other gainers: ZU +5.9%. TRLA +5.6% (rallied yesterday following earnings). PCLN +2.8%. EXPE +3.7%. MEET +4.3%. LIVE +9.9%. ANGI +3%.
Apr. 25, 2014, 1:31 PM
- Today's selloff is following the pattern of most in the past few weeks, with the small caps (IWM -1.9%) and tech (QQQ -1.5%) leading the way. Pacing declines in the Nasdaq are a 8.8% dive in Amazon post-earnings and a 4.6% fall in Facebook. Setting tongues wagging in FB - but hardly a huge deal - is the sale of another 283K shares by Sheryl Sandberg, bringing her holdings down to 8.7M shares.
- The liquidation in biotech has previously been a convenient excuse for small cap selloffs, but the IBB is off just 1.4% today, outperforming the Russell 2000.
- What's working? Utilities again. The XLU +0.8% today and +13% this year, outperforming the Russell 2000 by about 1.6K basis points.
- Small cap ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, SAA, DWAS, VTWO, SDD, VIOO, JKJ, RSCO, SBB, FYX, XSLV, EWRS, TWOK, SMLV, PXSC
- Utility ETFs: XLU, IDU, VPU, NLR, GRID, JXI, NUCL, DBU, IPU, UPW, RYU, PUI, FUTY, FXU, SDP, PSCU, UTLT
- Biotech ETFs: IBB, XBI, BIB, BBH, FBT, PBE, BIS
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