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I think an important thing to point out in the comparison to Walmart is that Facebook have actively said to the market "We don't think this revenue stream is go

I think an important thing to point out in the comparison to Walmart is that Facebook have actively said to the market "We don't think this revenue stream is going to last, and we're going to plough billions into a completely new area". We all know fundamentally what Walmart does as a business is going to be here 50 years from now. That's why the P/E is so low - because people are discounting future earnings by a lot because over the next 5 years there are about 3 big threats that are going to eat away at that revenue stream. (1: High value users leaving, 2: Regulatory pressure, 3: Massive spending on a new unproven business)

blagie 4y ago
I'm bearish on Facebook in the long-term: 1) The market seems saturated, and users are starting to slip away. If it ever loses critical mass, it collapses. 2) Facebook can't execute complex technical plans anymore. It's investing billions into a risky new area -- the metaversa -- with nothing to show for it. 3) The internal culture focuses on politics and pet projects. It's not a bad backstabbing politics -- it's a great place to work -- but it's just not aligned to business success. Most Metamates want to do fun, interesting things, with little connection to business success. 4) Costs are out-of-control, and decoupled from revenue. Revenue is high, so it's not a pain point right now, but that decoupling will lead to massive pain once things go south. I would short Facebook, but I don't know how long the "long term" is. I don't think it's at a risk of becoming MySpace, but I suspect it will go the way of AOL at some point. I still know older people with @aol.com emails, but it's not worth a lot and no longer relevant. It feels brittle -- once things start to unravel, they'll continue to do so very quickly. It needs a good tipping point, whether that's a scandal, a new regulation, or whatever.
- TenJack 4y ago
  Have you tried their Oculus 2 VR headset?

blagie 4y ago

I'm bearish on Facebook in the long-term: 1) The market seems saturated, and users are starting to slip away. If it ever loses critical mass, it collapses. 2) Facebook can't execute complex technical plans anymore. It's investing billions into a risky new area -- the metaversa -- with nothing to show for it. 3) The internal culture focuses on politics and pet projects. It's not a bad backstabbing politics -- it's a great place to work -- but it's just not aligned to business success. Most Metamates want to do fun, interesting things, with little connection to business success. 4) Costs are out-of-control, and decoupled from revenue. Revenue is high, so it's not a pain point right now, but that decoupling will lead to massive pain once things go south. I would short Facebook, but I don't know how long the "long term" is. I don't think it's at a risk of becoming MySpace, but I suspect it will go the way of AOL at some point. I still know older people with @aol.com emails, but it's not worth a lot and no longer relevant. It feels brittle -- once things start to unravel, they'll continue to do so very quickly. It needs a good tipping point, whether that's a scandal, a new regulation, or whatever.

TenJack 4y ago
Have you tried their Oculus 2 VR headset?