
Facebook earnings beat; shares jump nearly 20% - codegeek
http://www.cnbc.com/id/100903640
======
jonmc12
Mobile push notifications? I suspect at least one technique that is helping
with mobile engagement is the aggressive push notification strategy they have
deployed in last 3 months. Its not just when someone mentions you, but even
random wall posts from friends will send me an alert 1-2 times per week
([http://forums.androidcentral.com/samsung-
galaxy-s4/293018-fa...](http://forums.androidcentral.com/samsung-
galaxy-s4/293018-facebook-app-notifications-about-friends-status-updates-
friends-not-close-friends-list.html))

At first I tapped on every one of these and landed in FB. After a few weeks, I
realized something was off (or FB was just trying to trick me into thinking a
wall post was relevant).

Anyhow, its a interesting/shady tactic to re-engage passive FB users, possibly
one of several strategies that are getting them results on mobile. Here is how
to turn off push notifications -
[https://www.facebook.com/help/103859036372845](https://www.facebook.com/help/103859036372845)
\- I'm sure most FB users can not figure this out.

~~~
chipsy
Joking with friends last night: "Facebook Liked your status."

I've held the opinion that FB is poised for major user erosion, as a
consequence I took a short position in the stock some months ago. However,
since they've entered a phase where they're aggressively monetizing, I'm
probably going to get out on the next pullback. I still think the conditions
are right, but there's also no catalyst event on the horizon.

~~~
analyst74
"Markets can remain irrational longer than you can remain solvent." \- John
Keynes

That's especially true with shorting positions.

------
andrewla
Financial reporting is the absolute worst. Why say something like "estimates
called for the social media giant to post earnings of 14 cents per share on
revenue of $1.62 billion". Comparing the per-share number to the total revenue
tells us next to nothing. Interpretation of the facts aside, they should at
least report the relevant facts.

Going to the primary source tells us that the numbers are $333M income on
$1.813B of revenue, and the same quarter last year was a ($157M) loss on
$1.184B of revenue. So revenue increased by ~$629M, and income increased by
~$490M.

~~~
minimax
There is a lot of bad financial reporting out there, but this isn't it. They
aren't "comparing the per-share number to the total revenue." They are
comparing the current quarter's EPS to the EPS for the same quarter a year ago
and to the consensus expected EPS. The difference between the expected EPS and
the actual EPS accounts for the jump in share price. EPS is just a way of
normalizing earnings on a per share basis, kind of like how we quote the price
per share (about $31 right now) rather than the total market cap.

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tokenadult
"Facebook's earnings excluding items came in at 19 cents per share versus 12
cents per share a year earlier."

What were the excluded items?

[http://www.investopedia.com/terms/e/excludingitems.asp](http://www.investopedia.com/terms/e/excludingitems.asp)

~~~
JumpCrisscross
"Share-based compensation and related payroll tax expenses and income tax
adjustments" are excluded from Facebook's non-GAAP income (loss) from
operations measure.

Facebook believes "varying available valuation methodologies, subjective
assumptions and the variety of award types that companies can use under FASB
ASC Topic 718" make it difficult for investors to gauge the "underlying
performance" of "business operations" across time periods and companies.
Excluded payroll tax expenses "are tied to the exercise or vesting of
underlying equity awards," and to Facebook's stock price "at the time of
vesting or exercise", which again may obfuscate "the operating performance".

[https://www.sec.gov/Archives/edgar/data/1326801/000132680113...](https://www.sec.gov/Archives/edgar/data/1326801/000132680113000016/ex991.htm)
_FB 's Q2 2013 Reported Results_

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sharkweek
Those five shares I bought to be a part of internet history at the IPO are
finally making a comeback

~~~
Afforess
If you had instead invested that money in a ETF that follows the S&P 500, you
could have $2.109 in profits today. (Assuming $190 initial investment and S&P
growth of 1.11% since May 20th)

~~~
minimax
I think you fat fingered the calculation. The S&P is up something like 30%
since the FB IPO (5/18/2012).

~~~
Afforess
Yep you are right! I calculated from May 2013, not May 2012! The total profit
would be $46.68

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fear91
I am waiting for Facebook to start their own AdSense alternative. There is a
lot of money there.

~~~
chatmasta
Seriously. This is the one reason I invested in Facebook stock. They are
sitting on immense profit potential in the form of contextual advertising.

~~~
Zimahl
I would guess it's because the context is relatively obscure whereas with
Google it's not.

Yes, they can uniquely identify you by your profile more than Google can, but
for many who don't 'like' everything left and right (or like everything they
come across) how would you determine what ads to show them? Just because my
friends like something doesn't mean I will. And that's a wasted impression.

Google on the other hand knows what you want - you're actively searching for
it. It's pretty straightforward for those who want to serve ads to target what
they want to target.

~~~
sharkweek
I think you're confusing Adsense with Adwords -- Adsense is the offsite
platform Google runs; if Facebook told websites using their non-existent off
site platform what to advertise to you, that would very quickly turn into a
fountain of money

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faramarz
Amazing! So they simply turn ads on for mobile and it makes over $200 million
in a quarter. Jaw dropping!

~~~
GoNB
As someone who has clicked less than maybe 20 Internet/mobile ads in their
life, thus clearly not party of the demographic companies target, I wonder
what is wrong with my brain if the majority of people click on ads. (And
probably spam mail too)

~~~
nuclear_eclipse
Disclosure: I'm a Facebook employee working on something completely unrelated
to ads, and I always use AdBlock on my desktop machines, but I will say this
for our mobile advertisements: they can be genuinely useful. Just last week, I
got an "offer" on my phone, from The Gap, for 25% off my next purchase.
Claiming the offer didn't send any of my information to the gap, but it
prompted me to shop there for pants when I normally would have gone elsewhere,
and I actually ended up buying something. At 25% off, it cost less than or
comparable to my normal shopping locations, so it was a win for me, and I
bought something from The Gap that I otherwise wouldn't have, so it was a win
for the advertiser. A far cry from the bad taste that online advertising
usually leaves in my mouth.

~~~
arkades
That sounds to me like the argument people always provide in favor of targeted
advertising. What distinction do you see between desktop and mobile that made
the latter more useful for you?

~~~
nuclear_eclipse
Desktop advertising has never before offered me a discount for having seen the
advertisement; it's usually along the lines of "go look at this". By having a
more tangible "carrot", if you will, I was much more receptive to the request
for attention.

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crapshoot101
I bought at ~21 blended; I'm feeling good right now, but see this as a real
long term bet. FB's position is so stratospheric that the opportunities to
monetize are nearly endless; the rub is going to be in picking the right
paths, not the lack of paths.

~~~
loganfrederick
It really should be noted that no company with Facebook's P/E ratio has
maintained that level for a long term. Facebook is still so overvalued that it
will certainly come down from where it is now. If it doesn't, it would be the
first company to do so. Even if it were to increase it's earnings, just a
quick glance at Google Finance shows it's P/E 2,231. Regardless of other
financials, that ratio is so off the wall that it could not be justified
without an unprecedented amount of earnings growth. Making the claim that
Facebook is the greatest company in the history of public companies is a
stretch.

[1] Cliff Asness of AQR's "Bubble Logic":
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=240371](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=240371)

~~~
tanzam75
> _Even if it were to increase it 's earnings, just a quick glance at Google
> Finance shows it's P/E 2,231._

Google Finance has not recalculated the ratios yet. At present, Facebook is
trading around 100x earnings.

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junto
This is slightly off topic, but can someone explain this to me.

I'm looking at the Google Fiance page for FB:
[https://www.google.com/finance?q=NASDAQ%3AFB](https://www.google.com/finance?q=NASDAQ%3AFB)

There I can see that the price is indeed up, but this is "pre-market":

Pre-market: 31.10 +4.59 (17.31%) Jul 25, 5:29AM EDT

Can someone explain to me how this pre-market works in the background? Is is
an summation of an actual work queue of orders that are waiting to be placed
once the market opens?

I'm really interested how this works from the general technical perspective.

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dbg31415
Hooray for annoying stupid fuckign ads all over Facebook.

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psbp
Facebook is not going away. They can turn on as many revenue streams as they
want, and people will not leave.

~~~
1O0101ll100O
"AOL is here to stay." "Myspace is here to stay." "Facebook is not going
away." "640K should be enough for anyone."

The only certainty is change.

~~~
freshfunk
Arbitrary list? Why not use Google, Apple, Intel?

~~~
cryowaffle
Not arbitrary... list to support his opinion of Facebook.

~~~
psbp
It's arbitrary because if we're going to assume that facebook is going away,
we can just as easily assume that google, intel, etc will.

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icedchai
Wow. I'm at break even. Almost.

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chatmasta
I made my first stock investment yesterday when I bought 20 shares! I must be
a savant.

