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Reports Of Facebook's Death Are Greatly Exaggerated

Aug. 03, 2018 4:53 PM ETMeta Platforms, Inc. (META)52 Comments
Adam Hartung profile picture
Adam Hartung


  • Facebook may be under attack, but it's barely wounded.
  • And it's not in the throes of demise.
  • The long-term trends all favor social media's ongoing growth and higher values in the future.

On July 26, 2018 Facebook (FB) set a record for the most value lost in one day by a single company. An astonishing $119B of market value was destroyed as the shares sank more than $40. For many investors, it was the sky falling.

As most of you know, I've followed Facebook closely since it went public in 2012. And, I've long been an admirer. I said buy it at the IPO, and I'm saying buy it now. Click on the title of any of the posts to read the full content.

To summarize, Facebook may be under attack, but it's barely wounded. And it's not in the throes of demise. The long-term trends all favor social media's ongoing growth and higher values in the future. Below I'll offer some of my previous blogs that are well worth revisiting amidst the current Facebook angst.

FANG (Facebook, Amazon (AMZN), Netflix (NFLX) and Google(GOOG (GOOGL)) investing is still the best bet in the market. They have outperformed for years, and will continue to do so. Why? Because they are growing revenues and profits faster than any other major companies in the market. And "Growth is Good" (paraphrasing Gordon Gekko.) If you have any doubts about the importance of growth, go talk to Immelt of GE (GE) or Lampert of Sears (SHLD).

Don't forget, for years now Facebook is more than Facebook.com. It's smart acquisition programs have dramatically increased the platform's reach with video, messaging, texting and eventually peer-to-peer video. Facebook's leadership has built a very adaptable company, able to change the product to

This article was written by

Adam Hartung profile picture
Grab my newest book "Facebook - The Making of a Great Company" on Amazon.com - you'll read in under an hour why you want to own the stock.https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Ddigital-text&field-keywords=FAcebook+the+making+of+a+great+companyAdam Hartung has more than 30 years of practical experience developing and implementing successful strategies to take advantage of emerging technologies and new business models. He is currently CEO of Spark Partners, Content Laboratory, Inc. and Soparfilm Energy Corporation. Additionally, Adam Chairs the Audit Committee on the Board of Directors for Six Dimensions Global (SIXD,) and has been on the Board at several privately held companies. Adam provides board advisory services via the National Association of Corporate Directors (NACD) where he is a Fellow and regular speaker on risk management across multiple industries. Adam is the No. 1 Leadership columnist for Forbes.com with over 60million readers, and quarterly Leadership columnist for CIO Magazine. He has been featured in dozens of journals, including Adweek, Washington Times and BBC television. Adam received his MBA from the Harvard Business School with Distinction and continues to travel the globe leading risk management workshops as well as conference and management meeting keynotes.

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Comments (52)

Adam Hartung profile picture
For followers of Facebook - be sure to pick up my new ebook "Facebook - The Making of a Great Company." Since the price crashed in August, 2018 Facebook has been a screaming buy, and this ebook clearly explains why it is a stock you want to own long-term
FB will and is satisfying regulators and will continue
the climb.
Boilermaker_KK profile picture
Q. How many years did it take for Intel and Microsoft to recover from their #1 and #3 inflation-adjusted one day record drops? And the answer is ...
Good question. Looks like msft took about 16 years and Intel is still waiting to match their all-time high. what was Microsoft and intels p/e ratios at their all time high?
Nothing to do with this. This an Social Media Internet Company monopolizing the Digital MKT at a worldwide level, not a software nor a hardware company (this one a commodity), and growing at 32% earnings. So growing at this level it’s a doble in 2.5 years. Investors are not stupid when they see something cheap they go into.
MSFT/ INTEL had PEs well in excess of 50. FB is around 20 (note FB’s fourth quarter had one time tax charge that distorts their trailing PE).
mikes425 profile picture
Thanks for the article! I wanted in on the IPO and missed it...
am sorry I didn't buy more along the way up... Established
tiny position in my fund based PF at about 158 earlier this
year and held since then. Would like to add more.
Is this still the time to do that...177-78 this week... or wait
for another dip? Thanks!
jfedericobarreto profile picture
Thank you. Very well written. Great perspective.
Did the world forget about 99% of Facebook shares worth Billions are going to humanity?
Very long Facebook! Looking for at least $220 this quarter.
Great article and nice summary too. Thanks 👍👍 Long FB

One thing I like FB is they don’t monetize their assets for short term but pave the way for sustainable long run. We still have long way to go!

Folks in FB...Keep changing the world please
villainy profile picture
I'm long let's be clear. I don't think FB is about to retest the highs of two weeks ago. I think this quarter many will ponder whether to be in or be out. I think advertisers have an easier decision....am I making outsized returns or should I look elsewhere. Advertisers are not going to worry if the DAU or MAU is better or worse...they have a simpler metric. Do those clicks make for more sales and am I doing better on FB than I was with my other advertising.

I think there will be a lot of 'wait and see' and so I expect a trading range I'm guessing 170-185 and up and down until the next earnings report. If they kick it as I'm strongly suspect they will, we're back in business. If it is weaker than expected, down to a new range of 150-160. I'm holding because I think the profits will smooth over all the previous ailments.
If you think long term the questions you have to make to yourself are:
Is FB useful to advertisers?
Will FB be here with us leading social media for the next 5 years or more?
Does its porffolio (WA, etc) have monetization potential?
Will FB and Its portfolio be a fundamental MKT vehicle for SMS business and Corporations for the next 5 years?

If so, forget Mr. Market in the next q3 CC. You are long, so you should not be worried, you undestand FB and Its fundamentals. Don’t forget FB is for about 12 years doing this and growing like crazy. It’s the leader, it It’s a monopoly, monopolies has pricing power, so ARPU will keep growing q after q. A no brainer. I think WA will be the next super star.
Dr. Piz profile picture
FB is a juggernaut in Ad revenue! So not worried. These last few weeks just shook out the loser shorts and will bring only more explosive earnings with the bar coming down. It’s like FB did it on purpose so the next several earning quarters will be blow outs?😜 Watch and see friends. Long FB!!!
Bought a bunch of ‘at the money’ FB call options just after the drop. 🤞🏻
TomasViewPoint profile picture
FB is a cash machine. I like owning cash machines. Other cash machines are GOOG and Apple.

Anyone owning these 3 stocks for the last 10 years are too rich to bother being on this board.
Boilermaker_KK profile picture
Thomas, your both wrong and right. I’m here on this board. But so are you.
TomasViewPoint profile picture
Well I don't own all 3 for 10 years. If you did then I congratulate you.
Clauser1960 profile picture
Reports of FB's death simply do not exist.
ackleykid profile picture
Great article. Your 2012 article was even better. Bought on the IPO day and have steadily added since then including on two pull backs this year. Second largest holding behind BRKB.
Livegood3 profile picture
Added more shares today to make it an even 100. I think it will retest its highs possibly before the end of this year
I’ll bet FB will have a VR PHONE WITHIN 8 years disrupting all of technology.
paraisorefuge profile picture
Sold at 209.99 on 7/17 ,bought it back for 168 a week ago . I will continue to sell high and buy low ,as long as the opportunity presents itself. T was a nice buy at 31 also . Great markets giving us great opportunities. Just be patient and wait for those moments .
So why did I sell before the crash and buy after the crash. Because I suspected that EU new subscription numbers would soft because of FIFA. In post FIFA Europeans will recover quickly as they will be bored after FIFA.
@modaddy786 Fake news. FB is a bargain. Bought some...I will see it back to 210.
I never listed to doom sayers, shorts or bears.
Boilermaker_KK profile picture
That will not take you far in life. Never listen to differing opinions. At least provide them consideration. You’ll likely strengthen your thesis when you do ... and possibly, once in awhile, have a change of heart. I’ve yet to meet anyone who is right all the time ... well, until possibly right now.

I hope you have a change in heart in the near future. Best of luck. Stay balanced.
soloram profile picture
Facebook is in trouble. I think Trump doesn't like it. Trump Trade Forever.
Yes, sell everything that Trump doesn't like, good strategy....Too bad I can't go back and sell amzn 6 months ago, cause you know Trump just destroyed that stock....
‫ארז לוי‬‎ profile picture
very good article...fb have a few more 🐇 in the hat..
whatsapp start to make monet..
the china government approve fb to open a subsidiary..
what about the dating application that mark talk about (and already have a 2.5B users)..
and believe me i can keep going on and on....
very very long fb!
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