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The core business may have peaked but it still has good economics. From a FCF perspective, FB is generating ~30-40bil FCF and based on last market cap of ~700bil, that is around 20-25x FCF.
It is "sort of" fairly valued for a business that has strong moats but unfortunately a few things go against it - (1) Mr Market treats FB as "growth", rather than "strong moats". (2) Putting on the lens of value investing...If FB halts its Metaverse progress and commits to pay out its FCF, then it may actually get interesting! But unfortunately, with the core business showing that it is closer to the peak (or past it) than not, Mark Zuckerberg will only double down from here.
The end of the metaverse hopefully
Nikita Bier, the founder of the tbh app, which was acquired by Facebook in 2017, had a good take on this, tweeting, “Facebook's hands are tied. 1—High ARPU coastal users have churned; TikTok is eating their lunch. 2—They can't acquire because of antitrust scrutiny. 3—They can't build because founders don't want to be there. 4—IDFA killed their ability to target ads. 5—The metaverse is 10yrs out. RIP.”
https://www.garbageday.email/p/the-end-o...-hopefully
It is "sort of" fairly valued for a business that has strong moats but unfortunately a few things go against it - (1) Mr Market treats FB as "growth", rather than "strong moats". (2) Putting on the lens of value investing...If FB halts its Metaverse progress and commits to pay out its FCF, then it may actually get interesting! But unfortunately, with the core business showing that it is closer to the peak (or past it) than not, Mark Zuckerberg will only double down from here.
The end of the metaverse hopefully
Nikita Bier, the founder of the tbh app, which was acquired by Facebook in 2017, had a good take on this, tweeting, “Facebook's hands are tied. 1—High ARPU coastal users have churned; TikTok is eating their lunch. 2—They can't acquire because of antitrust scrutiny. 3—They can't build because founders don't want to be there. 4—IDFA killed their ability to target ads. 5—The metaverse is 10yrs out. RIP.”
https://www.garbageday.email/p/the-end-o...-hopefully
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.