- Antitrust charges were filed against Facebook for anticompetitive behaviour relating to acquisitions that stifled competition, and providing selective access to its APIs.
- In a worst-case scenario, WhatsApp and Instagram could be divested, which would be negative for total shareholder value in my opinion.
- However, I think the worst-case scenario is unlikely, and Facebook has various factors working for it in its case against the government.
- Facebook comes out tops in a 'Rule of 40' comparison, due to sector-leading margins combined with strong sales growth. Valuation at 10x P/S is compelling when compared to peers.
- Any selloff should be a dip buying opportunity of a quality company with core competitive advantages in the social media space. Buy Facebook.
For further details see:
Facebook: Why I'm Not Too Worried About The Antitrust Suits