THREAD $FB
I see a lot of flippant bearish FB tweets. Typically they are politically motivated or lack data. I love hearing the other side, but haven’t seen a thoughtful bear case so I thought I’d try build it myself.
Summary: 1) Users Fall; 2) Competition; 3) IDFA; 4) Opm% fall.
1) Despite the popular narrative I see of “I don’t use FB anymore and neither do my friends,” unless you think FB is flat out lying about their User #s, the data doesn’t support this. FB Blue DAUs have been going up every year World Wide and in the more mature NA market.
Note, FB reports MAUs/DAUs for Facebook blue app, and only recently started reporting the FB Family of apps in aggregate (Facebook, Instagram, Messenger, WhatsApp) which has ~2.54bn DAUs vs. FB Blue at 1.82bn.
But NA Users DID FALL sequentially in 3Q20 (after robust additions during the earlier periods of COVID) and have been fairly stagnant since 2018 when the Cambridge Analytica news hit (3Q17-1Q19, over 6 quarters FB only added 1mn net DAUs and the stock was down over this period).
NA is 10% of FB users but 50% of Revs so it is a key geo to watch for. Admittedly, at 195mn DAUs in NA and 255mn MAUs, there likely aren’t a lot of users left to acquire. If you’re not on FB now, you probably won’t be in the future (unless you’re a teenager and you “age up”).