FB's business model will eventually clash with its value proposition to users.
The hedge fund and institutional investing world has fallen in love with facebook because it obviously is growing like crazy and scale and in a profitable manner, but also because it is viewed by many as a modern-day "value investment" (strange as that sounds), in the sense it has a powerful competitive moat and compounding returns on investment. but ultimately this thesis comes down to placing more paid ads in front of users. facebook will have to choose between cramming more and increasingly intrusive ads into its platform or dealing with a falling stock price. when it happens who knows, but it will at some point
the regulatory risk is real but vague. out of curiousity, i wonder how many people thought the regulatory risk for microsoft in the late 90s was real
The hedge fund and institutional investing world has fallen in love with facebook because it obviously is growing like crazy and scale and in a profitable manner, but also because it is viewed by many as a modern-day "value investment" (strange as that sounds), in the sense it has a powerful competitive moat and compounding returns on investment. but ultimately this thesis comes down to placing more paid ads in front of users. facebook will have to choose between cramming more and increasingly intrusive ads into its platform or dealing with a falling stock price. when it happens who knows, but it will at some point
the regulatory risk is real but vague. out of curiousity, i wonder how many people thought the regulatory risk for microsoft in the late 90s was real