Arjun Venkatesan's Contributor Page
Last Updated: July 26, 2020 (Prior to the 2Q2020 earnings release).
View: Bullish
Model Description: 2020 has by no means been easy to navigate through for many companies. The market is continuously being shaped by unusual factors and although it is easy to label Facebook (FB) as a bearish investment opportunity, it is worthwhile to take a second look at it. COVID-19 has put the world at a difficult place, pitting public and economic health against each other. As result quarantine measures and protocols have drastically increased the average time a typical user spends on social media. Therefore, it is safe to assume that Facebook should be expecting an unusual growth in Monthly Active Users which will be reflected positively in their earnings report. However, another obstacle that Facebook faces is the boycotts on running advertisements on their platform. Many large corporations have cut down on their advertising on Facebook as a response to the company’s “laissez-faire” approach to monitoring political and hate content on their platform. This “political awareness” image that companies are fostering is just a positive way for them to mask the cutting down on marketing expenditures to keep their business afloat during COVID-19. Although these boycotts seem like they would impact Facebook’s earnings, it is important to think of the situation in simple “supply and demand” terms. Due to the increase of active users, companies will still have incentives to push out their products through advertisements as it is the best way to advertise. Businesses need a way to enter your home to market their products as no one is willing to step outside, and Facebook just might have the right key for them to enter through social media...click here to continue reading
View: Bullish
Model Description: 2020 has by no means been easy to navigate through for many companies. The market is continuously being shaped by unusual factors and although it is easy to label Facebook (FB) as a bearish investment opportunity, it is worthwhile to take a second look at it. COVID-19 has put the world at a difficult place, pitting public and economic health against each other. As result quarantine measures and protocols have drastically increased the average time a typical user spends on social media. Therefore, it is safe to assume that Facebook should be expecting an unusual growth in Monthly Active Users which will be reflected positively in their earnings report. However, another obstacle that Facebook faces is the boycotts on running advertisements on their platform. Many large corporations have cut down on their advertising on Facebook as a response to the company’s “laissez-faire” approach to monitoring political and hate content on their platform. This “political awareness” image that companies are fostering is just a positive way for them to mask the cutting down on marketing expenditures to keep their business afloat during COVID-19. Although these boycotts seem like they would impact Facebook’s earnings, it is important to think of the situation in simple “supply and demand” terms. Due to the increase of active users, companies will still have incentives to push out their products through advertisements as it is the best way to advertise. Businesses need a way to enter your home to market their products as no one is willing to step outside, and Facebook just might have the right key for them to enter through social media...click here to continue reading
| FB Earnings Model (Arjun Venkatesan).xlsx |
Arjun Venkatesan is a rising sophomore at Rutgers University. He is double majoring in Mathematics and Finance with a core concentration in Real Estate. Arjun enjoys getting involved in competitive case and equity research competitions on campus. He is currently working with a startup on the road to acquire pre-seed funding from Venture Capitalists and Angel Investors. He is in charge of all financial aspects from creating detailed Financial Models (DCF, P&L Statements, etc.) to laying out capital structure. He has a keen interest in problem-solving and markets, driving him to pursue a career in financial analysis.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.