Buy 300 Shares Of Facebook (FB) On 10/15/2014

Facebook AtlasBoth the Dow and Nasdaq were down between 2% and 3% today and that came on the heals of substantial down days in the last four trading sessions. It was ugly and THAT was what panic looks like. The markets are now down for the year and I have no idea whether the selling will continue from here. But since I just wrote about buying stocks in a declining market, I decided to take this opportunity to buy 300 shares of Facebook at $71.52 per share.

Why I Bought Facebook Now: Atlas

I hate Facebook and other than the page for this blog, I’m not even on it. I’ve never bought the stock before because I was afraid people would get tired of it and move on to other social media sites. I’m still a little weary of that happening as there are continuous news stories of how teens are moving on to other platforms. But for the most part, I think it is clear that Facebook is here to stay. 

That being said, I think there is no doubt that FB can target ads better than anyone due to the immense data base it has containing personal information of all kinds willingly donated by users. If there is any company that can rival Google in selling ads I think it is Facebook. And that is basically why I bought the stock. Please push the play icon and watch the short video below about FB’s new ad selling platform Atlas:

You can also read this good article about how Atlas will allow Facebook to capture advertising revenue off-site much like Google Adsense does. Additionally, they will be able to capture more revenue from mobile users as they are tracked from device to device and shown ads that match what their interests are. 

Facebook is very serious about maximizing ad revenue and that is a danger if people start to get turned off by too many ads. But Google has built an empire around its ads business and any competitor that has a legitimate chance of taking away some of those profits may be worth a buying, at least I hope so. 

Facebook announces earnings at the end of this month and has a recent history of beating estimates handily. That is why it has a high P/E ratio as growth investors are willing to pay more for a company with accelerating earnings. It doesn’t pay a dividend few growth companies do. That earnings report will be important for the direction this stock takes.

Do I wish that I had bought Facebook stock earlier at a lower price? Absolutely. But this new Atlas ad serving platform really has my interest and shows that the company is focused on profits and effectively leveraging the very valuable treasure trove of personal information about its users that no other company has. The stock has come off its high of $79.71 and so I thought this might be a good time to buy. We will see!

6 Responses to “Buy 300 Shares Of Facebook (FB) On 10/15/2014”

  1. Brandon says:

    Hello Bruce,

    I share your general pessimism with all social media companies. Any organization which does not actually produce anything tangible is not something I want to invest in. I agree with your assessment of FB however because of their clear strategy to integrate their site through as many popular websites as possible. The revenue generator isn’t leaving anytime soon and the fact they have the edge in mobile (where more users are gravitating from desktops/laptops) is huge. Even if this was not the case, I still like FB long (5-7 years) after their purchase of Oculus Rift. Working in tech and seeing the potential of what could be with OR, I think FB is poised to take their site virtual in the future, where the entire experience (talking with friends, videos, and all other shared media) would be in a 3D environment. Already embedded everywhere, with a revenue ad stream, they could do whatever they wanted with the new tech (like Google Maps leasing their tech to other companies) and forever change how users experience the internet. Or not, but it should be interesting.

    • Bruce Alan says:

      Thanks for the comment Brandon. I agree with what you say and also think (hope) that Oculus Rift and virtual reality will become a big deal in the future. From everything I read, it is a very cool experience and might be where everything is headed in a year or two after they figure out how to do it right.

  2. Vinit says:

    Hi Bruce,
    Amazing analysis by you.FB stock happened to higher since you purchased. Can you point out the trends you look in a particular stock while you make the analysis whether a particular stock is a good buy?

  3. Marwan says:

    Hi Alan,
    What do you think about IBM stock, and are you welling to buy them?

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