Buy Call on FB

I made a buy call on FB 2 months ago at $27 – My basis for the buy call are pointed out below were:

 

Fundamentally, the asset base, now a huge $15b as against $6b last year, and the new debt of $2b more than offset by liquid cash & short term securities. The goodwill was increasing at a rapid pace too. Also, notice that amongst the peers, this company stood at a massive EBITDA of $1.1b, 24%.

On the business side, then, one has to realize that the real value of a network increases exponentially with the number of people on the network (Reed’s law/Metcalfe’s law). Although the marginal increase is slower than before, but look at the size of the network, it’s already huge. 

Practically, I saw a trend of many other leading, potential technology and related businesses allowing log-in through Facebook login, and several other features intertwined with the Social networking website. I, therefore, foresaw growth in RPU after a bit. 

Just looking at relative valuation through P/E only in this industry isn’t of course the best way to assess the potential. Just look at so many loss-making entities there, so you can’t compare well across peers anyway.

Here’s the today’s rate:

 

 

 

 

 

 

 

 

 

 

 

 

 

Pakistan Education Fund Drive

Less than two months ago, I set out to raise funds for an education fund drive with the purpose of raising enough money to support education for at least 1 child in perpetuity. Good education should give people the ability to think through situations, reason out things, and ask the right questions; these three things together can open up a range of opportunities for the educated mind. My idea was based on the simple premise that an endowment fund be formed that could invest the raised money and support the child’s education through the profits earned. The initial capital was supposed to be kept in tact, and the funds could keep on supporting a child’s education every month.

Since I’m a firm believer in the power of education and wanted to convey why it was so important for Pakistan, I had discussions with The Citizens Foundation, an NGO working in supporting education for the under-privileged sector, and prepared a video slide documentary, and uploaded that on Vimeo. You can find that link here:

The Story of Life – A 20-minute video presentation

I started to share the video around, most amongst friends and family to raise some funds. My personal benchmark for success of the project was raising funds for educating a child for at least a year. With the grace of Almighty, only within a few weeks, I managed to raise a sum of Rs. 110,500/- enough to support education for over 9 children for an entire year. This was a great thing to have happened, although the goal of raising enough funds for sustainable educational support remained partially complete. I submitted the funds forward to The Citizens Foundation, and started working on other pursuits.

Soon thereafter, I had someone wanting to contribute to the cause and the person sent the funds too. So, I am just reopening the collection drive for a second round, hoping to raise some more money for these children. If you are interested, or know someone who might be, please feel free to share this post around.

Also, if you have any questions, or comments, or some feedback, feel free to write to me about that.

Thanks for your support!

“Education is the most powerful weapon which you can use to change the world.” – Nelson Mandela

On Cats and Humans

Cats are generally very calm, always bent on doing their own thing and usually take the path of least resistance, and move around doing what they want, but these creatures turn voracious and attack back at you if you corner them on 3 sides.

Moral of the story: Don’t push the seemingly calm ones just about too much that they’re left with nothing but to attack back on you.

Alternative moral of the story: Most of the people, like cats, behave very relaxed until they are left with no other alternative. Often when boats are burned, and no other alternative is left, people perform their best.