1/ Thread: $FB long-term bull thesis
It's Zuck.
Of course, there are other reasons as well. But Zuck is at the center of my bull thesis. Here's why.
It's Zuck.
Of course, there are other reasons as well. But Zuck is at the center of my bull thesis. Here's why.
2/ At the age of 19, Zuck founded $FB in 2004.
From 2004 to 2007, here are the list of companies that made an attempt to buy FB:
Friendster, Google (3x), The Washington Post, Viacom (3x), MySpace, News Corp, NBC, Yahoo (2x), AOL, Microsoft (was able to invest $240 mn in ‘07)
From 2004 to 2007, here are the list of companies that made an attempt to buy FB:
Friendster, Google (3x), The Washington Post, Viacom (3x), MySpace, News Corp, NBC, Yahoo (2x), AOL, Microsoft (was able to invest $240 mn in ‘07)
3/ Yahoo was the first to offer $1B (50x sales) for $FB in 2006.
Zuck's response?
“This is kind of a formality. Just a quick board meeting, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here.”
Zuck's response?
“This is kind of a formality. Just a quick board meeting, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here.”
4/ Why?
“Yahoo had no definite idea about the future. They did not properly value things that did not yet exist. They were, therefore, undervaluing the business.”
Zuck would have received $250M by selling $FB. Think about the belief one needs to say NO to that for a 22-yr old!
“Yahoo had no definite idea about the future. They did not properly value things that did not yet exist. They were, therefore, undervaluing the business.”
Zuck would have received $250M by selling $FB. Think about the belief one needs to say NO to that for a 22-yr old!
5/ Was it just financial? Yahoo just didn't pay enough?
Nah.
“I would only use the money to start another social network and I like the one I have”
Nah.
“I would only use the money to start another social network and I like the one I have”
6/ Zuck did show a moment of "doubt" after Yahoo's offer. He reluctantly agreed to sell.
But Yahoo had a bad quarter and they reduced the offer by $200M. Zuck said NO.
After Zuck declined the offer, almost the whole senior management left.
But Yahoo had a bad quarter and they reduced the offer by $200M. Zuck said NO.
After Zuck declined the offer, almost the whole senior management left.
7/ Again, think about all the social media sites that failed before $FB, and you have slightly <$1B offer on the table, and most of your colleagues are threatening to leave!
Who would say NO to that? Zuck did.
"For me it’s not really about fun though. It’s about mission.”
Who would say NO to that? Zuck did.
"For me it’s not really about fun though. It’s about mission.”
8/ 1 year before $FB's IPO, $GOOG launched Google+. It was a David and Goliath battle.
GOOG's profit was 4x FB's revenues.
Just like history, David again beat Goliath!
GOOG's profit was 4x FB's revenues.
Just like history, David again beat Goliath!
9/ 1 month before $FB IPO, Zuck bought IG.
Sequoia injected $50 mn at $500 mn valuation on April 04, 2012.
Zuck invited IG guys, negotiated the deal in 48 hours, and acquired IG for $1B on April 09, 2012.
Sequoia doubled the money in 5 days.
FB 100x the money in 6 years.
Sequoia injected $50 mn at $500 mn valuation on April 04, 2012.
Zuck invited IG guys, negotiated the deal in 48 hours, and acquired IG for $1B on April 09, 2012.
Sequoia doubled the money in 5 days.
FB 100x the money in 6 years.
10/ Acquiring IG was no-brainer, right?
Jack Dorsey allegedly made a pass at IG in March 2012.
IG had 13 employees and literally ZERO revenue.
Hindsight is 20-20. But nothing's easy.
Think about the ruthlessness needed to make $1B offer 1 month before IPO! Zuck's the man!
Jack Dorsey allegedly made a pass at IG in March 2012.
IG had 13 employees and literally ZERO revenue.
Hindsight is 20-20. But nothing's easy.
Think about the ruthlessness needed to make $1B offer 1 month before IPO! Zuck's the man!
11/ Then came $FB IPO disaster! Stock dropped 50% from its IPO price.
There was real doubt whether FB can transform its business from desktop to mobile!
There was real doubt whether FB can transform its business from desktop to mobile!
12/ $FB Ad revenue from mobile
2012: $0
2015: $10B
$2019: $60B
Zuck. Zuck. Zuck.
2012: $0
2015: $10B
$2019: $60B
Zuck. Zuck. Zuck.
13/ $FB now owns four of the five most used social apps!
Facebook
Instagram
WhatsApp
Messenger
Messenger
14/ The best part? Zuck is only 35 years old!
Bezos is 55, the same age Gates handed over CEO role at $MSFT.
Zuck is the best owner-operator in the "Big tech" space set to remain CEO for at least 20 years!
The likes of Jobs/Bezos/Gates/Zuck will always be ONLY a handful!
Bezos is 55, the same age Gates handed over CEO role at $MSFT.
Zuck is the best owner-operator in the "Big tech" space set to remain CEO for at least 20 years!
The likes of Jobs/Bezos/Gates/Zuck will always be ONLY a handful!
End/ My long-term $FB bull thesis, hence, is the opportunity to invest alongside Zuck for next 20 years!
At the same time, I believe $FB has the least impenetrable moat among the big tech now! Like I said, nothing is easy. But my bet will be on Zuck.
At the same time, I believe $FB has the least impenetrable moat among the big tech now! Like I said, nothing is easy. But my bet will be on Zuck.
