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Sometimes I think that “Zuckerberg” is a Hebrew word that means “Fooled You”. Every time Mark comes up with an idea, he walks into a barrage of pessimism and opposition. He is the classic example of a one-eyed man in a world of the blind. By the way, that would make you and I – and all of his detractors – a part of the blind. Yet, every time, no matter what the cost, he eventually comes out a winner.
Zuckerberg’s only child, Facebook (NASDAQ:FB), issued it Q2 results yesterday. Its performance was so astounding that the FB share price gained as much as 20% in after-hours trading. At this very moment (14:32 UTC, 25 July 2013), FB’s share price has skyrocketed by 27.15% to 33.71.
This is so typical of Facebook. I never understand the stigma attached to it. I don’t care whether it’s some stodgy, old pontificant or an up-and-coming, wet-behind-the-ears, new guru, everyone likes to treat Zuckerberg’s royal baby like a punching bag. I agree that its inept public offering didn’t help Facebook’s image, but that wasn’t all Facebook’s fault, and, there IS life after an IPO.
Despite expectations that Zuckerberg’s foray into selling advertising on Facebook’s mobile app would prove to be futile, the company reported that mobile advertising revenue now represents 41% of its core advertising business. That is a 33% increase over Q1 2013. Plus total core advertising revenue climbed by 61% to $1.6 billion. Total revenue was up 53% to $1.81 billion.
Analysts had projected that FB would generate 14 cents EPS. They (the analysts) only missed by 36% as Facebook delivered at 19 cents per share.
Zuckerberg said that there are now 819 million Facebook mobile users numbered among the 1.15 billion total members. CFO, David Ebersman, said that “All the investments we’ve been making in the business have been paying off.” No kidding. Zuckerberg added that “The work we’ve done to make mobile the best Facebook experience is showing good results.” These guys are the masters of understatement.
Perhaps the difficulty that the market has with understanding Zuckerberg is that his thinking process is so visionary and so far ahead of the curve, it is simply impossible to comprehend what he and his colleagues can conceive and deliver. That is something that none of us ever want to admit about someone else. I think that puts Zuckerberg in the company of people like Columbus and Magellan.
Just because people say “It can’t be done” doesn’t mean that it really can’t.
Facebook almost became an investor’s joke (or nightmare) following its IPO price of $38.00 per share. Now, as one source put it, investors are hitting the “Like” button. These results may be the beginning of the original dream come true, with about a dozen brokerages now setting the IPO price as a minimum performance target for the full year. One analyst who has had the cobwebs brushed from his eyes said that “FB’s massive audience should be irresistible to brand advertisers as the company preps to launch 15-second video ads, which could be Facebook’s next billion-dollar business.” Another proclaimed that “Facebook has discovered the formula to begin significantly extracting value from its 1.16 billion global users.”
As I sit here and bring this article to a close, the thought occurs to me that it might be time that we start giving Mark Zuckerberg a little more respect and start calling him “Mr. Zuckerberg, Sir.”
And if you were there for the IPO, and you have stuck it out so far, things are looking pretty good for the return on your loyalty.
