Track And Tracebook


Visit: Finimize

What’s going on?

Facebook announced better-than-expected quarterly earnings late on Wednesday, but investors – noticing that users seem weirdly uncool about being watched non-stop – sent its shares down 4%.

What does this mean?

Just as Snap Inc. and Twitter’s updates suggested last week, the digital ad market has been going from strength to strength. And given that Facebook now has 2.9 billion monthly active users – up from 2.7 billion this time last year – and makes virtually all its money by selling their eyeballs to advertisers, the company’s revenue jumped by a better-than-expected 56%.

Trouble was, that was only a 7% uptick in user numbers – the company’s slowest growth in years. What’s more, Facebook warned that sales growth will slow down significantly for the rest of the year too. That might have something to do with Apple’s recent privacy changes, which have made it harder for advertisers on Facebook to target iOS users – in turn denting one of its most lucrative sources of revenue.

Why should I care?

The bigger picture: Everything’s back to normal, right?

Facebook’s announcement comes just a day after positive updates from AppleMicrosoft, and Alphabet. These four companies have now posted a combined profit of around $67 billion in a record-busting quarter, as they ride a resurgence in consumer and business spending that suggests the worst of the pandemic-induced impact is a thing of the past.

For markets: If it’s good enough for hedge funds…

Facebook is one of hedge funds’ favorite stocks right now: 27% of them own shares in the social media giant – more than any other single stock – and 57% of those have it as a top ten holding. That could be an encouraging sign: over the last 18 years, the stocks that have seen the biggest increase in hedge fund ownership have usually gone on to outperform their sector rivals in the next few quarters.

Originally Posted on July 28, 2021 – Track And Tracebook

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Hedge Funds

Hedge Funds are highly speculative, and investors may lose their entire investment.