FACEBOOK STOCK CRASH. will i buy?

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The Facebook stock crashed today like we have not seen in a big company in quite a while. We must ask what are the facts that came out of Facebook earnings. Also did Facebook stock deserve to crash as a result of their earnings. Also, will I buy Facebook Stock?

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Whew it is a tough day for Facebook investors out there Facebook stock is down nearly 20% today just a dramatic downfall down over $40 a share, which is unbelievable. Now I want to get into a lot of different things in this video I want to get into all the factual information.

Okay, I also want to get into the real reason Facebook stock is down so much today. Okay. And then lastly, I want to kind of get into Am I gonna buy Facebook stock? Am I gonna short Facebook stock.

Am I going to do anything with Facebook stock? Am I just like, Do I not care about that stock? I want to get into all of that here today. Okay, we got a lot to get into. First off like Facebook stock has come back very dramatically since the Cambridge analytic a situation the stock fell.

But like the 150 ish range, and then from there after that kind of got over, the stock just flew up like insane, okay, and the next thing you know, it was like $217. So although it is fallen a big deal today.

Down to 170 $875 range or so, we just got to remember that this was a stock at its 52 week high of its all time high. Okay, not just 52 weeks, and it literally it’s all time high going into this earnings.

So it’s really price to perfection. Okay, so let’s get into this guys. The first factor we got to acknowledge is Wall Street, if you’d ever didn’t understand what Wall Street is a bunch of old ass rich white mofos. Okay.

Those are the people who dictate whether stocks go up or down. Okay, go look at the list of the biggest hedge fund managers, mutual fund managers or whatnot. These are the guys that are controlling the money in the system and whether stocks will have a huge day.

Whether Facebook stock was up 20% today or down 20% based upon their buys and sells because they funnel a bunch of money here together, and they have tons of money to invest. Okay.

That’s who controls Wall Street, the sun, we got to understand I’ll bring it back to that point in just a second. Okay. So the first fact is Europe, daily active users fell 3 million on the Facebook platform. Okay, that’s not including Instagram.

That’s not including WhatsApp or any other Facebook products, just on the Facebook platform. Europe, daily active users fell 3 million. That’s a pretty big number there. Okay, the US and Canada was flat for daily active users. All right.

For the Facebook platform. So you had flat in the US in Canada, and then you had a drop of daily active users of 3 million in Europe. Okay. So these guys who have no clue about culture, and what is, you know, cool out there.

And what people actually want to use, these guys have no conception of it. All they know how to do is look at numbers and be good salespeople to get people to give them another 100 million for them to invest. Okay, that’s what they’re good at.

They just look at the numbers, they have no clue on what’s cool and what’s not. So this comes as like a shock to these guys. Okay? They’re like, Oh, my gosh, you mean to tell me that.

That Facebook is in cooling more and like Europeans are starting not to use a service as much and oh, my gosh, the US and Canada could fall soon. This is like, they just like popped out of their head.

Now. They actually see the concrete numbers, okay. Anybody with half a brain has understood this with the Facebook platform. For years. Facebook has been cool for five years now, guys, okay.

It’s been a long, long time in the EU, US and Europe, that Facebook has been cool. It’s been a long, long time. Okay. But these guys just have no clue about culture. They have no clue about the fact that young people dictate what’s cool, okay.

Unfortunately, or fortunately, whatever way you want to look at it. High schoolers and college kids, they did take the whole system. Okay. Apple understood this better than anybody.

And how did Apple Come on the huge comeback? Well, because they got the younger jet, a generation of love Apple products. They started buying iPods they started asking their parents for iPods, all that type of stuff.

And next thing you know, Apple’s now the biggest company in the world. Steve Jobs understood this a long time ago, okay. But these guys don’t understand anything. Okay? They don’t understand anything about what is cool and what is not there.

So out of touch, because they live in their little, super rich bubbles or billionaire bubbles, okay? They hardly ever talk to their kids, which I would highly suggest they actually talk to their kids.

But unfortunately, even their kids a lot of times are out of touch and aren’t in touch with the real world because they’re so freakin rich. Okay, so it’s a tough situation for them. Okay, so that’s how something like this can happen.

And this can shock these guys. Oh, my gosh, users have gone negative in Europe. What’s gonna happen to US and Canada next. Okay, that’s a big thing. Now, some more factual information revenue was up 42% year over year in the quarter 42%.

That’s a massive, massive increase, especially when talking about a company’s Facebook size. Its company with over half a trillion dollar market cap over half a trillion dollar market cap and their revenues are 42%.

That’s unbelievable growth. net income was up 31%. Okay. This is actually kind of a bad sign in the sense of you usually want net income to be rising faster and revenue revenue was up 42%.

But your net income was only a 31%. That’s because of a lot of things that we’ll get into. They now have cash of $42 billion on a balance sheet. And no debt. Okay. $42 billion, no debt by the end of the year.

There have way Over $50 billion, probably up to $60 billion in cash on the balance sheet and they’ll still have no debt. All right? employees are up 47% year over year the headcount is up 47% year over year, which explains why net income grew way less than revenue did okay.

In most situations you’re gonna see with a lot of companies net income is going to grow faster and revenue but with Facebook here, because they’ve added so many employees, it’s it’s killed a lot of their profit growth. Okay.

47% up year over year is that’s a lot of employees. Okay, that’s 10,000 plus more additional employees they have this year, then versus last year, guys, the dramatic amount, okay. Now also, here’s a second part on why the stock is down big today. Okay.

The first one is, oh my gosh, we’re starting to lose users in the most profitable markets. Okay, that was the first part. The second part is revenue growth is expected to slow down to 20 to 30%. That’s still unbelievably really good. Okay. 20 to 30% revenue growth is great.

But when you’re used to growing 42%, all of a sudden a lot of these growth investors these super high growth investors are like, wait a minute growth just slow down in a major way now talking about 20 to 30% revenue growth after you were on 40% plus clips.

Wait a minute, wait a minute, we don’t know if we want to be in the stock Okay, that’s where a lot of high growth investors look at it. All right, that you know, 20% that’s not sufficient for a lot of high growth investors.

They want companies that are grown 40 plus percent, and this stock just went from 40% to now they’re talking about to be in the 20s that’s a massive changer guys in margins are expected to fall why margins expected to fall because they’re spending so much money on a new employees on safety systems.

So many different things after the Cambridge analytic a situation, the lack of trust in Facebook platform across the board. Okay. So you have a lot of stuff going on there. Right, a lot of stuff going on.

Now, at this point in time, let’s get into what I plan on doing and kind of my view on Facebook stock my take on Facebook stock. Now that we have the facts understood now what am I going to do with Facebook stock.

Am I going to buy the stock? Am I going to short the stock? Am I going to buy call options, put options by going to trade options? What I plan on doing with Facebook stock, am I I’m gonna more than likely start buying Facebook shares, okay.

And buying them how I usually do in two to $5,000 increments and we’re going to go through right now why I’m going to start buying the shares. And by the way, this is jump all other positions I wanted to add even the three stocks I was talking about yesterday’s video three stocks.

I’m buying since Facebook has dropped so much. This is probably jumped all other companies in in terms of companies, I actually want to start adding shares and Okay, so everything.

I’ve ever said about Facebook is coming true. Okay, there’s two things. Basically, every time I bring up Facebook on the channel for the past year, there are two things I consistently bring up, including like the video I talked about top millennial stocks.

Like a week ago or whatever, two things that bring up. The first is Facebook will continue to be a profit machine for years to come. That is playing out now we’ll know the true and true and true.

The second part I always bring up is that I’ve always said that in 2018, it was going to be the year where the old guys on wall street that control the money start to figure out that Facebook growth is slowing and that’s going to freak them out.

I see that every single time I talk about Facebook stock on this channel, those two things, both those are absolutely coming through I understood like the philosophy of Wall Street, I understand who runs the money on Wall Street.

You understand that you’re going to understand that all sudden, these numbers are going to get to a point where also they’re going to be like Oh, these aren’t as impressive anymore, and they’re going to freak out.

Okay, so Facebook is a straight money printer, okay, and will continue to be a straight money printer for a long time to come. Okay? Although users are weakening, it’s still in a position where that company is going to make fabulous amounts of money, Facebook.

And we’re just talking about Facebook platform. I’m not even talking about Instagram. I’m not even talking about WhatsApp or anything. If we’re just looking at it from the Facebook perspective.

That was a standalone company, their profits will continue to explode for the next several years. Okay, that’s the first part. All right. Second part is Instagram is a hottest social platform out there by far and away.

Facebook owns Instagram, okay, Instagram now has over a billion people using that platform and will probably get to a place where it’s bigger than Facebook, maybe within a year or two. Okay.

I think there’s a great possibility of that so that they own the hottest platform out there and Instagram that is pretty dang good man when you own that so some people want to say Facebook is a new MySpace, which is totally not true.

And I totally don’t agree with that. Although Facebook you know, is in a place is a place where they can’t really grow much more. Or the next MySpace and my opinion No, they’re not my space.

Like they went out of business. I was a total different thing. My Space was never even that huge in the first place. Okay, and then it just completely fell apart. I don’t say that. But if you want to say Facebook’s the next my space.

Go ahead and say that well guess what’s the next Facebook? Its Instagram. Okay, so that’s pretty awesome. When you own the number two out there the platform where everybody’s out right now, in regards to Instagram.

Monetization is an early days on Instagram, okay, it’s still in the infancy of the monetization age of Instagram. That’s a plus. form that the revenues and profits from just Instagram, if that was a standalone company.

We can actually see everything behind that are going to continue to explode at 50 to 100%. clips for the next three to five years. All right, it’s very early days, and also WhatsApp which has over a billion people using another platform that Facebook owns, okay.

And their messenger, those, those platforms have hardly been touched in terms of monetization. So if you’re looking at it from monetization handles of what Facebook can pull, they have a lot more to pull with the Facebook platform, okay.

They have a dramatic amount took more to pull for Instagram over the coming years, and WhatsApp and messenger, they haven’t even been touched. They’re like just kind of reaching for the handle right now. Okay.

So which means there’s a huge potential for profit and revenue growth for this company over time, all right, that is pretty unbelievable. Also, ad rates are going to start to increase in a major way over the next three to five years.

Ad rates on every platform, I don’t care if we’re talking about here on YouTube, I don’t care if we’re talking, you know, Google AdWords, the lowest ones might kind of stay around where they’re at.

But Facebook ads, Instagram ads, Twitter, I don’t care with pretty much any platform you talk about out there. If it’s in relation to social and it can directly link people to a tool somewhere off of there.

It the ad rates are going to go up in a dramatic way. Okay, and I’m not the only one that feels like that. And there’s also a lot of people that feel like that on social Gary Vaynerchuk being one of them.

A lot of people feel like ad rates are going to explode over the next three to five years. All right. Also, this company has a forward p e right now, under 20. Let’s keep in mind, this is a company that still expects to grow revenue at a 20 or 30% clip, okay, which means net income.

Probably the same around a 20 or 30% clip. And we’re getting this company for a PE under 20 p under 20. Guys, like seriously, no doubt on that balance sheet, they’re gonna have well over $50 billion.

Likely unless they buy some huge company hits soon or something they have well a well over $50 billion by the end of this year in cash just sitting on that balance sheet. Holy smokes, guys.

I mean, think about the share buybacks they can do and whatnot with all the cash you’re gonna have coming in, they can start doing something like an apple, where they have all these profits coming in and they just start buying back shares like crazy or they can start issuing dividends or so many different things his company can do.

So when I look at this, it is now replaced apple in my opinion, this company has now replaced apple in terms of the easiest money an investor can make over the next five to 10 years.

When I look out over the next five or 10 years. Like I try to think about like what’s the least risk in a particular stock with the most reward it used to be Apple number one, I’ve had that number one for a while I’m replacing Apple now with Facebook.

Apple is going down to number two easiest money in the stock market. Facebook honestly right now is the easiest money someone can make in the stock market in my opinion over the next five to 10 years.

Which is while I’ll likely start buying at high high probability and I’ll just continue to add shares you know, two to 5000 at a time and if it goes down you know lower cost basis and whatnot.

I’m gonna it’s such easy money. It’s just disgusting guys. Anybody that understands anything about how how advertising is done, and how like, how much money is going to flow into this space, you know what television advertising overtime, like no one watches TV ads anymore.

There’s still somewhere between 60 and $90 billion like spend on TV ads a year and then from I understand that’s just in North America, nevermind around the world, like all that money is going to flow over to these guys. Okay.

It’s all going to flow over to Google, through the YouTube platform into Facebook and some of these platforms that have massive amounts of users on it guys. Easy money. So anyways.

I want to know your guy’s opinion on Facebook as a company. I would love to hear from you guys down there in that comment section. As always, make sure you follow me on Instagram if you have not already vache you for watching. Have a great today.

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