4 ms·

Meta is in the advertising business - why would we say they are they trailing Apple, Amazon and Microsoft? I don't really understand why we are comparing a com

by Closi 4y ago

Meta is in the advertising business - why would we say they are they trailing Apple, Amazon and Microsoft? I don't really understand why we are comparing a company who develops social media applications and generates advertising revenue against Apple who generates most of it's revenue from selling Hardware, or Microsoft who generates most of it's revenue from licencing software. If we are saying that Meta are trailing Apple, we might as well say that Microsoft are trailing Saudi Aramco.

lotsofpulp 4y ago
The market is not comparing their potentials now, but the market used to feel their potentials were similar in 2010s. Sorry for the terrible graph, it’s the quickest market cap with all of them except Microsoft on it that I found. http://www.innovationkm.com/wp-content/uploads/2019/05/image004.png http://www.innovationkm.com/wp-content/uploads/2019/05/image... http://www.innovationkm.com/the-market-cap-of-faang-changes-in-the-past-days/ http://www.innovationkm.com/the-market-cap-of-faang-changes-... Another way to think of it is in the 2010s, a potential employee may have ranked a job at any of those companies as having similar security, but there is probably a different feeling about that now.
- Closi 4y ago
  They aren't really in the same market though - so it's comparing apples and oranges. I get comparing Meta against Google, but why would we compare Meta against Apple? They are fundamentally different businesses.
  - lotsofpulp 4y ago
    The market compared their potential during the 2010s, because everyone was growing by leaps and bounds and the sky was the limit. There is clearly no reason to do that now.
    - Closi 4y ago
      Plot the graph again but instead of comparing them to Apple and Netflix try comparing them to Johnson & Johnson and Porche.
    - Closi 4y ago
      As a follow on point to my other reply comment on review, the comparable stock on that list is Google - and the graph probably shows that the market actually underestimated Meta's 'potential' compared to Google. 2010 Meta 'Potential' vs 2010 Google 'Potential' - c$50bn vs c$200bn 2022 Meta 'Potential' vs 2022 Google 'Potential' - c580bn vs c$800bn Meta grew >10x across the period, while Google grew c4x I don't personally buy that Market Cap = Potential, but you would be twice as rich if you invested in Meta according to that graph than if you invested in Google, and you would have also done better investing in Meta across that period than Apple according to the graph you sent across.
      - lotsofpulp 4y ago
        You would have to take into account stock splits and dividends. According to DQDYJ total return calculator: https://watch.dqydj.com/timeseries/stock-calculator/ https://watch.dqydj.com/timeseries/stock-calculator/ From May 21, 2012 (when META went public) to now, here are the annual returns: MSFT - 24.53% AAPL - 22.99% AMZN - 22.07% GOOGL - 18.09% META - 14.36%
        Closi 4y ago
        It wasn’t me who originally used market cap as a proxy for potential…
        deleted 4y ago
        [deleted]

by Closi 4y ago

lotsofpulp 4y ago

The market is not comparing their potentials now, but the market used to feel their potentials were similar in 2010s. Sorry for the terrible graph, it’s the quickest market cap with all of them except Microsoft on it that I found. http://www.innovationkm.com/wp-content/uploads/2019/05/image004.png http://www.innovationkm.com/wp-content/uploads/2019/05/image... http://www.innovationkm.com/the-market-cap-of-faang-changes-in-the-past-days/ http://www.innovationkm.com/the-market-cap-of-faang-changes-... Another way to think of it is in the 2010s, a potential employee may have ranked a job at any of those companies as having similar security, but there is probably a different feeling about that now.

Closi 4y ago
They aren't really in the same market though - so it's comparing apples and oranges. I get comparing Meta against Google, but why would we compare Meta against Apple? They are fundamentally different businesses.
- lotsofpulp 4y ago
  The market compared their potential during the 2010s, because everyone was growing by leaps and bounds and the sky was the limit. There is clearly no reason to do that now.
  - Closi 4y ago
    Plot the graph again but instead of comparing them to Apple and Netflix try comparing them to Johnson & Johnson and Porche.
  - Closi 4y ago
    As a follow on point to my other reply comment on review, the comparable stock on that list is Google - and the graph probably shows that the market actually underestimated Meta's 'potential' compared to Google. 2010 Meta 'Potential' vs 2010 Google 'Potential' - c$50bn vs c$200bn 2022 Meta 'Potential' vs 2022 Google 'Potential' - c580bn vs c$800bn Meta grew >10x across the period, while Google grew c4x I don't personally buy that Market Cap = Potential, but you would be twice as rich if you invested in Meta according to that graph than if you invested in Google, and you would have also done better investing in Meta across that period than Apple according to the graph you sent across.
    - lotsofpulp 4y ago
      You would have to take into account stock splits and dividends. According to DQDYJ total return calculator: https://watch.dqydj.com/timeseries/stock-calculator/ https://watch.dqydj.com/timeseries/stock-calculator/ From May 21, 2012 (when META went public) to now, here are the annual returns: MSFT - 24.53% AAPL - 22.99% AMZN - 22.07% GOOGL - 18.09% META - 14.36%
      - Closi 4y ago
        It wasn’t me who originally used market cap as a proxy for potential…
        deleted 4y ago
        [deleted]