FB Stock: Secret Facility a Game Changer for Facebook Inc?

FB Stock: Secret Facility a Game Changer for Facebook Inc?

FB Stock: Secret Facility a Game Changer for Facebook Inc?

  • Buz Social Traders Game Changer for Facebook Several months ago, I wrote about a new top-secret facility at Facebook Inc (NASDAQ:FB) called “Building 8,” but its impact was still unknown. At the time
  • I wasn’t sure how Facebook stock (FB) would be affected by this new division. A recent acquisition put everything into perspective.
  • The social media giant has bought a little startup known as Nascent Objects. It is a hardware electronics maker, but with a twist. Nascent uses 3D printing to create “modular electronics,” meaning you get to customize your devices by putting the various pieces together

Game Changer for Facebook A New Tailwind for Facebook

FB Stock: Secret Facility a Game Changer for Facebook Inc?

Game Changer for Facebook  FB stock is also a hardware electronics play now. “Building 8” is ground zero for this transformation. It is where Facebook will innovate on the hardware front, designing and building products that we haven’t yet dreamed of.

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In many ways, we’ve been converging toward this point for a long time. Facebook has quietly amassed a ton of products to layer over its social media apparatus. Many could become cash cows. For instance, they’ve made it possible to send money through “Facebook Messenger.” You can order (and pay for) a pizza through Messenger, or even call for an Uber car. And that’s only the beginning.

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No one was trying to build a virtual reality device; no one except Palmer Luckey. He was a 17-year old kid in California who wanted to fulfill his childhood dream of putting on a headset and falling into another world. Miraculously, he succeeded. After getting his company off the ground through a Kickstarter campaign, Luckey followed it up with investments from two major venture capital firms.

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One of the capital firms, Andreessen Horowitz, was an early investor in FB stock. The firm showed the VR device to Facebook CEO Mark Zuckerberg and he was simply blown away. Zuckerberg understood the immense potential of Oculus VR, so he flew to Irvine, California where the company was headquartered. The story of that meeting has become the stuff of legend in Silicon Valley. (Source: “Why Facebook’s $2 Billion Bet on Oculus Rift Might One Day Connect Everyone on Earth,” Vanity Fair, last accessed September 20, 2016.)

At the moment, Facebook stock relies too much on advertising revenues. More than 96% of its top line was made up of advertising dollars, with the remainder coming from payment fees. I expect the payment fees portion to increase, but Facebook needs to spread its eggs into even more baskets.

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Copyright 2016 Investors Buz

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