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Facebook Stock Price Drops 25% On Slower User Growth (5)

07-25-2018 10:18 PM #1 moneytrain (Member)
Facebook Stock Price Drops 25% On Slower User Growth

Thoughts on what this means for AM and eComm? Facebook's user growth is slowing but they are monetizing better (i.e. more revenue per user or charging more to advertise on their platform).

I personally think the stock will spike back up to its previous price very soon since Instagram ads are doing well and this disappointing earnings performance may have just been due to the problems earlier this year.

What do you guys think?

https://www.marketwatch.com/story/fa...iss-2018-07-25

07-25-2018 10:58 PM #2 cmdeal (Veteran Member)

Short term stock fluctuations don't mean much, to be honest ... I usually ignore them.

07-26-2018 09:00 AM #3 diamond (Member)

If anything, this should be a buy signal if you're into stock investments.

07-26-2018 09:52 AM #4 manu_adefy (Veteran Member)

Knee-jerk reactions to some stuff imo.

I mean, we also have to assume previous price before the drop was correct, which is hard to do. I only know enough about stock pricing to say that I have no idea what the correct price is for FB, or another company, at a given point in time.

What was interesting to me was the surprise that North American monthly active users didn't grow.

Quick maths:

Canada has a population of ~35.6 million. - https://www.indexmundi.com/canada/de...s_profile.html

The USA has a population of ~326.6 million. - https://www.indexmundi.com/united_st...s_profile.html

Both Canada and the US have only ~88.5% Internet penetration. - http://www.internetlivestats.com/int...rs-by-country/

USA + Canada will then be a possible reach of 320.54 million people for Facebook, and the platform has 241 million monthly active users here.

That’s 75.2% of the total possible population that uses Facebook at least once a month.

Doesn't sound like there's much space to grow user numbers, especially when you also think about the share of the population that's too young to have an account.

07-26-2018 01:26 PM #5 moneytrain (Member)

Quote Originally Posted by manu_adefy View Post
Knee-jerk reactions to some stuff imo.

I mean, we also have to assume previous price before the drop was correct, which is hard to do. I only know enough about stock pricing to say that I have no idea what the correct price is for FB, or another company, at a given point in time.

What was interesting to me was the surprise that North American monthly active users didn't grow.

Quick maths:

Canada has a population of ~35.6 million. - https://www.indexmundi.com/canada/de...s_profile.html

The USA has a population of ~326.6 million. - https://www.indexmundi.com/united_st...s_profile.html

Both Canada and the US have only ~88.5% Internet penetration. - http://www.internetlivestats.com/int...rs-by-country/

USA + Canada will then be a possible reach of 320.54 million people for Facebook, and the platform has 241 million monthly active users here.

That’s 75.2% of the total possible population that uses Facebook at least once a month.

Doesn't sound like there's much space to grow user numbers, especially when you also think about the share of the population that's too young to have an account.
Great points, Manu. Its core business aside, FB still has plenty of room to grow with its Instagram, WhatsApp, and Occulus divisions. While some think the stock's value is based purely on growth, I'm positive that the Zuck has some monetization plans up his sleeve. I'd buy the stock now while there is room for it to rebound soon on Wall Street once people figure out it still has lots of long term value.

Love how you wrote about this in this morning's WHAT THE AFF!

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