Facebook is a social networking platform that operates all over the world. It offers a variety of tools that allow the user to connect, share and discover information from other users using technological devices such as mobile phones and computers. Since its introduction in 2004, it has seen a remarkable growth that has left most investors with the urge to have a critical look on the Facebook company profile.
The company has in the recent managed to display a stratospheric high of 121.16 per share index. This shows how the management is doing a good job in leading the digital advertising platform. In 2013 generally, it has managed to achieve a YTD growth of 117.73 which is great as compared to other companies. Due to these great achievements, there are no doubts that nothing is likely to come along the way in the success of the company.
The performance of facebook in the mobile advertising industry displays a potential appreciation of the stock market. This is occasioned by the explosive growth mobile advertising has experienced in the recent. Facebook’s performance even managed to beat its top competitors such as Nasdaq, Dow Jones and Google. The performance of the company in the global mobile advertising sales in 2013 is a more compelling reason for investors to acquire more shares from the company.
The IPO of Facebook experienced in 2012 was a major letdown and the upside turn around this year has been a surprise to many. Investors who purchased shares during that time have managed to be greatly rewarded with the boost. The IPO price on May 17, 2012 was at $38 but currently it stands at a higher rate with a 65.56% rise.
In less than a month ago, Facebook offered Snapchat a $3 billion offer in order to merge and make it a wonderful online video/photo messaging platform. Snapchat turned down this offer and surprisingly Facebook has been able to achieve this on its own. It has been able to introduce a new service with the help of Instagram which is a popular platform for photo sharing. The platform was acquired by Facebook for $1 billion. This new service offers Facebook users an experience similar to that offered by Snapchat.
85% of their revenue is generated from advertising accounts. An additional of 12% revenues comes from transactions related to Zynga. Payment processing and sale of virtual goods is considered a small part of the company but keeps growing into the overall business model. The Washington Post Company and Netflix are among the largest clients attached to Facebook. Between 2011 and 2009, Washington Post managed to spent, $4.2 million, $4.8 million and o.6 million while Netflix spent $3.8 million, $1.6 million and 1.9 million on advertising needs.
In the coming years, Facebook targets to expand greatly with the aim of diversifying their geographic coverage. This will facilitate their engagement with other popular businesses that will serve as a vital source of their growth. The company plans to continue expanding internationally in their business operations. There translation services have been enhanced and Facebook is now available in over 70 different languages. They also have data centers in over 20 different countries.
The company does not carry any debt but has approximately $ 400 million capital lease obligations. By the end of 2010, the company had accumulated a long term debt of $250 million but it managed to pay it off in 2011. It holds a clean balance sheet of $1.5 billion with remarkable securities of $2.4 billion. It has a strong balance sheet with working capital of about $4.03. The operation of the company over the years has displayed a remarkable and stable cash flow that any investor should take a keen interest in.
Facebook is a social media giant which supports very healthy financial statements over the years. Despite a few loopholes along its growth circle, the company still deserves the high valuation it experienced in 2013. Its valuation is set to rise over the coming years. Facebook’s IPO in 2014 will most likely be a bigger financial event as compared to what the company has experienced in 2013. Those who are lucky to own early shares will benefit more than those who are still having a critical decision to make whether or not to invest. Facebook, one of the greatest stock pickers in the world is set to make all interested parties in the world rich.