Now it seems I may lose $5, Is there any way to speed Facebook's demise? And, as a side note, now that Zuckerberg has pledged a lot of Facebook's value to the good of humanity should I still try to work towards this goal?
Pros/cons And strategies welcome
1. Facebook makes revenue from advertising. People are being increasingly turned off by advertising. As people close accounts, the management gets worried and pushes advertising even more. Advertisers buy eyeballs/clicks/impressions - whatever - it's all about the numbers. Less users, means less value, hence less revenue to FB.
2. The cool kids don't use what they parents and grandparents use. So as the "oldies" join, the youngsters drop off. But the oldies don't like advertising either ...
3. FB does NOT pay dividends. So why would you buy shares other than to sell at a profit? Which sooner or later ends up being a re-run of the Tulip Bulb craze. As soon as there are no buyers to be found at a particular price point, the prices collapse and increasing numbers of people try to offload which then pushes prices further down.
Caveat: I'm an engineer not a stock broker nor an accountant, the following is my back of the envelope calcs.
4. If FB responds to market pressure and decides to pay a dividend, then based on current revenues of $3b and 2.74b shares, you could expect a dividend around 50c which, looking WPP Holdings 2014 financials for comparison (eps 85, div 38, sp 1400), would have a FB share price approx $20 - compare this to currently at $105 ($38 at IPO).
Based on the above, the users and investors will bring about the demise you need to safeguard your bet.
BTW: Did you see the 1983 movie "Trading Places" with Eddie Murphy and Dan Aykroyd?
MySpace was started so the guys could spam users with Viagra ads and diet pills, seriously.
Facebook is keeping closer to its mission which is to let people find and view/share the lives of their dare I say friends.
I strangely would love you to win your five bucks. However Facebook's cash position and willingness to purchase everything that poses a threat isn't changing. It's bizarre to me the number of people I know who are done with facebook. Closed up account. I don't have facebook. I have instagram.