Meta Platforms, Inc. (META)

Not over the moon in terms of being expensive. We need to determine where it is going to go and how they transition into mobile. It is hard to determine if the advertising will work and earnings will be generated.

Thought the purchase of WhatsApp for $19 billion was insane. He’s been on the sidelines with this. Never bought into the fact that they were going to be a huge challenger to Google (GOOG-Q) in online advertising. Had a $1.83 of earnings, but that is against a $62 stock price. He can buy Google at under 20X earnings.

Doesn’t think people understand what this company is all about. This is not about posting Selfies or new puppies, etc. It is all about data analytics. Eventually we will be walking by a sporting goods store and will get a message on your phone that there is a sale on shoes in the store and you will go in.

Mobile is where everything is going. 50% of this company’s revenue is from mobile. Had $2.5 billion in revenue. The interesting thing about this is that management is actually showing some pretty good credibility in their core operations. The problem he is going to have with this is that the space is falling out of favour and it will be a bit of an upward climb. Be very careful. Will probably take a peek at this one over the summer months.

They are monetizing it now with ads. 60% of revenues from mobile. Growing at a tremendous rate and owns part of a growing market.

Technology is very fast moving. This is a very new company and already commands a fairly high market value.

Doesn’t follow this closely. It’s a great business but the 1^st number of quarters after their initial offering didn’t perform that well. Expectations today are probably a little bit higher because the last few quarters have seen better results. It is tough to go against a company that has built as much value as they have over the last 10 years.

(A Top Pick April 2/13. Up 138.08%.) Had avoided the IPO, but when it dropped below $20, he got into it. He could see that a lot more activity was going on in the advertising front. Has dramatically reduced his weighting after their 2 big acquisitions.

Has done incredibly well and is massively overpriced. Has made a lot of acquisitions over the last little while and paid a lot of money for them. Finds it very hard to understand this company as a business model because there is just not the need to buy things. Advertisers are there because they have a billion people, but not sure people are looking at that advertising. Doesn’t expect this will be would grow like Google (GOOG-Q) which has grown incredibly well.

Acquiring Oculus for $2 billion, a company that specializes in virtual reality. $400 million in cash and the rest in stock. This is concerning. “Drunken sailors going out and spending their months pay in one night.” Thinks this is illustrative of a very expensive stock and a CEO who has full reign and knows he has a currency and who has to compete against Microsoft Gaming, Google, Apple and everyone else. This is a gaming platform. This concerns him.

Fascinating company. Doesn’t own, but if he did he would probably Sell. They’ve had a bit of a miraculous recovery last year and their financials have come in better than what he had expected. One of the giants of social networking but he worries about this franchise longer-term and about the sustainability of what they are doing. Very, very expensive. There are safer places to play.

Put strategy. Risky only when you get put to. You have to watch it every day.

Social media stocks unfortunately have not been around long enough to have seasonality. In order to have seasonality, you have to have a security that has been trading for at least 10 years, preferably 20 and sometimes even more. Technicals are very, very positive. Trend is up and it is outperforming the market and probably trading very close to its 20 day moving average. Any kind of weakness would be a buying opportunity.

Clear theme of money working toward social media. They are successful in monetizing their mobile platform which has lots of legs in it. As long as group performs well and beats estimates you could see multiples continue to expand.

Earnings were fabulous. On past shows he has shied away waiting for greater certainty. That is starting to happen. They are executing well. The big question was whether they were going to be able to make the transformation from a social media juggernaut to an advertising model. Have been doing extremely well with it. Mobility now makes up 53% of their advertising revenues. Growing at a very fast pace. The caveat is their price, which is trading at 45X earnings. At some point, fundamentals are going to have to grow at a faster rate than their price to bring down that multiple to something more reasonable.