Facebook Makes a Fan Out of Citron Research


 
 
02:03 12/27/2018

Notable short seller Citron Research is now feeling bullish on social media giant Facebook. The newsletter has called the company the "2019 S&P Stock of the Year" in a report issued this week.

The editor of Citron Research, Andrew Left, had said Facebook was a long-term short over two years ago. He even

believed that engagement levels would top out.

Left has changed a tune and has said it is now time to "back up the sleigh" as the stock is down a little over 40% since it hit a record high of $218.62 this past July.

"In the past 30 months (Facebook) has more than doubled its quarterly revenue and concerns of engagement have shifted to concerns of addiction," said Citron.

Citron tweeted, "$FB Backing up the sleigh. $160 tgt. Citron presents the only information that counts on $FB looking past the rhetoric. Would you rather have your kids addicted to Nicotine or Instagram? Wall St answer will amaze you https://citronresearch.com/citron-research"

"The Facebook platform has advanced a long way and has turned this research firm from a one-time skeptic to a major bull," Left wrote.

According to left, despite the negative publicity the company has received regarding its data privacy issues mostly, the company has still seen its quarterly revenue grow at a double-digit rate. Left also said that its Instagram app is becoming a stronger platform for e-commerce as well.

"Instagram is going to become a bigger platform for brands to offer product deals through stories, creating a sense of urgency and scarcity, and video-friendly formats," Left explained.

Investors will be rewarded by the shift of user behavior to Instagram shopping and the personalization of the commerce process," he said.

"Books have been written and movies have been made on the Facebook is evil topic, but never before has Facebook been this compelling of an investment opportunity," Left also wrote.

"As investors have become overly concerned about the short-term noise of privacy and propaganda, they have forgotten to look at the earnings power and potential of the most advanced advertising tool with global reach in messaging, networking, and the future of shopping."

The newsletter noted that Facebook has 2.2 billion active users and has grown revenues 33% quarter over quarter during this year when Facebook dealt with issues "ranging from digital addiction, genocide in Myanmar, failure to adequately monitor or curtail propaganda from sources outside the country, and multiple abuses of user privacy."


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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