It’s amazing to think back to Facebook Inc‘s (FB) early days after its IPO. FB stock lost more than 50% of its launch price in about 3 months. And it remained an uphill climb.
Because bandwidth was limited on home and mobile networks, the vision Mark Zuckerberg had was running in to constraints that were straining the business side of the company.
As a startup, the venture capitalist will slap enormous numbers on a company just to hype it. But once they are actually publicly traded, it’s an entirely new game that is no longer about hopes and dreams, but revenue and earnings.
Simply put, having 1.6 billion monthly users is fine, but if they don’t spend any money, then it’s not a real business.
It wasn’t until the middle of 2013 when FB stock started to gain traction. And now that technology has caught up with FB’s vision, the future is getting brighter by the day.
In the early days, advertisers were pulling their accounts because the inconsistent distribution of bandwidth made ads clunky and uninspiring.
Now, not only are ads powerful growth engines, but mobile advertising is continuing to grow impressively.
And Zuckerberg has continued to stay in visionary mode, looking forward rather than resting on his laurels. This is good news for Facebook stock.
FB Stock: Growing a Future-Proof Arsenal
In 2014, FB acquired new messaging firm WhatsApp, which now has 1 billion active users. This addition to Facebook’s constantly growing arsenal will continue to grow its advertising base as well as add new, young users to its family of social media products.
FB also finally launched its Oculus Rift virtual reality headset. Initially built for the gaming community, this sector is just a gateway to much bigger opportunities in everything from VR phone calls to healthcare applications and educational tools.
According to US News & World Report, the VR market can easily approach $30 billion by 2020. Having the first dedicated VR entertainment system on the market could put FB is a very good strategic position to grab a good-sized chunk of that market.
Facebook stock has been pushing near its 52-week high but has backed off a couple times in recent months. But, hitting new all-time highs is just a matter of time, so right now is a very good entry point to FB stock.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
