For those doing conventional or online stock trading, there is a worthy opportunity worth checking out in the social networking sector.
2016 Is a Great Year for Facebook
Facebook’s (NASDAQ: FB) stock has been up thus far in 2016, by 9%, and by 8 percentage points is surpassing the broader market, according to S&P Global Market Intelligence. This year has seen the social networking giant’s stock rally to bring about great gains for its long-term shareholders. Facebook is worth more than $300 billion now, and is S&P 500’s eighth largest market capitalization.
Facebook began cultivating the bullish outlook for its investors since late January 2016 after it revealed a sales spike of 57% in the fourth quarter with its daily user base surpassing 1 billion. With its average revenue per user increasing in every region, Facebook’s profitability rose from 29% to 44% of its sales.
Facebook’s second quarterly report also revealed that revenue has grown by 52% while net income has tripled to $1.5 billion. The monthly user growth figure of Facebook has decimated other social media networks, particularly Twitter. In Q1, Facebook’s monthly users rose 15% while Twitter’s rose just 3%.
Improving Profitability through Monetization
To add to the optimism, Facebook has successfully devised ways to monetize its customer base while Twitter has not. Twitter has actually lost $400 million in the past 12 months while the profit pace of Facebook has improved to nearly $5 billion from $3 billion in these 12 months.
In April 2016, a few important growth areas were outlined by Facebook co-founder and CEO Mark Zuckerberg which could prove critical for boosting the user base well beyond the existing 1.1 billion people using Facebook daily for close to an hour, on average. These growth areas include video features such as 360-degree interactive content and live broadcasting. Other areas including virtual reality and artificial intelligence are also thought of.
Zuckerberg in Full Control
In terms of administration, a new structure has been given to Facebook shares, which keeps Zuckerberg in total control of the new initiatives being developed. So big decisions can be expected to be made, and Zuckerberg himself has revealed to investors in April that he is expecting “bold moves”.
If you are a stock trader, you should know that the Brexit meltdown had lowered much of Facebook’s stock. Though it has recovered nearly all of it, you’ll find the shares still trading lower than their all-time high. And with the aforementioned big and bold moves ahead, stock is sure to get soaring again for the globally popular social network. With 1.5 billion active users each month, this is probably the right time to pick up FB stock.
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