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Facebook: Taking Advantage Of A Crummy Situation

May 04, 2020 8:57 AM ETMeta Platforms, Inc. (META) Stock5 Comments
Graham Grieder profile picture
Graham Grieder


  • Facebook has seen activity explode. Over 3 billion people are using its apps.
  • The company beat on both EPS and revenue for Q1 2020.
  • After being unfairly hit, Facebook has recovered and is going to push for all-time highs.

Keeping people connected during times like these is extremely crucial. Companies like Facebook (FB) have seen massive growth in user activity and are taking advantage of the situation. Facebook has made it its core mission to help people stay in contact while not being able to meet in person. Q1 2020 results showed just that, as the company beat on both EPS and revenue. I believe the stock was unfairly punished with the rest of the market when it collapsed in early March, sending shares down 40%. The proof of harsh overreaction has been the V-shaped recovery we have seen in the stock since it bottomed on March 18th. FB stock is up 50% and counting since then.

(Source: Google Images)

COVID-19 Impact

Anyone who uses Facebook has probably seen the COVID-19 information center. This is loaded with authoritative information from health officials and governments with messages encouraging people to stay home. More than 2 billion people are using it. While doing this, the company has also been actively taking down "Fake News" with regard to potential cures such as chugging water. Facebook has used warning labels on questionable material and seen incredible success, stating that 95% of the time someone sees one of these labels, they do not click on the link. Some will disagree that this is effective and even question "free speech", but there is a lot of bad information out there, and Facebook is doing its best to protect people from potentially harmful information.

Thanks to COVID-19, there are now more than 3 billion people actively using Facebook, Instagram, WhatsApp, or Messenger each month. Messaging volume has blown up more than 50% in some of the COVID-19 hot spots as people stay connected as best as they can. The company noted that it has seen time in group video calling increase by more

This article was written by

Graham Grieder profile picture
A finance graduate from the University of Alberta. I have developed a trend-following strategy backed by solid fundamentals. Removing emotion from the situation is the hardest, yet most important lesson to learn.-"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffett

Analyst’s Disclosure: I am/we are long FB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

This author is really naive about Facebook's censorship. It is unwarranted, intrusive and one-sided with censorship of any comments protesting Lockdowns Which are a proven failure at this point (I am in medicine). I may still invest, as I have in Google, which also has a left wing slant that is annoying
Starr Trader profile picture
FB usaged increased but revenues dramatically dropped as most busi esses stop advertizing ... it ia going to stay that way for a while and hence valuation is unrealistic.
What? Business keep advertising, no doubt it, read the CC. Flat sales in April. If people don’t go to stores, don’t go to events, don’t go to shoppings, etc. How do people sale? Of course doing some promotion or marketing. What’s the easy and cheaper way to do this? It’s online. Then FB and Goog are a MUST. BtoC and BtoB. Take advantage of this times using Mr Market to your favor to buy it. Forget the price just add. There are so many lines of business growing on e-commerce at FB that long term the payback will be huge.
rabbi_kalkstein profile picture
ad spending is often negotiated well ahead of time, especially with bigger players
FB has to breakout $225 if the markets can recover to 28000
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