Facebook: Improved Price Control, Synergies, The Headline Effect, And High Alpha

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About: Facebook, Inc. (FB)
by: HedgeMix Limited
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HedgeMix Limited
Long/short equity, Deep Value, research analyst, macro
Summary

Facebook is an aggressive acquirer averaging 5+ acquisitions per year.

Being in the midst of a Value-Adding Acquisition Cycle, Facebook will increase its market dominance and price control and generate new synergies.

We use linear prediction and DCF modeling to reach a target price of $430.4.

Facebook has an asymmetric risk/reward profile with a positive alpha and non-systematic opportunities indicated at 18.38% annually.

Summary

Facebook (NASDAQ:FB) has acquired 5 companies per year on average. Each acquisition contributes to what we'd like to call a Value-Adding Acquisition Cycle, which improves the company's market dominance and price control,