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2 Reasons Why Facebook Inc (FB) Fell Today Despite A Reasonable Earnings Report: Gene Munster

Facebook Inc (NASDAQ:FB) is currently down about 6.18% and is trading at $75.78. In an interview on CNBC, Gene Munster, who is a senior analyst at Piper Jaffray tried to add some sense to the numbers.

Facebook Inc (FB), JetBlue Airways Corporation (JBLU)

Essentially, it’s the news that Facebook Inc (NASDAQ:FB) is going to unload its spending guns, increasing its capital expenditures going into the future that has some investors worried. This is of course coupled by the amazing run that the social media platform has had recently, as Munster pointed out.

“[…] The stock has had a huge run over the last 6 months, you know, Facebook Inc (NASDAQ:FB), it’s up almost 15% and so I think that there is some natural kind of re-calibrating expectations around some of these expenses, given that the stock has had such a  big run […],” said Munster.

Another pertinent question relating to Facebook Inc (NASDAQ:FB)’s decision to invest in new products is that which products exactly are we going to see next. Is the company thinking about monetizing its other platforms such as Instagram or Whatsapp? Munster had a feeling that it is, despite Facebook’s reservations in confirming that.

“[…] They said that in the next year they are not going to be doing much in terms of monetization, but I think they will. They have shown some ads that are really discrete, they tend to be pictures, they tend to be pretty provocative and I think that advertisers will find ways to engage Instagram […],” said Munster.

Facebook Inc (NASDAQ:FB) might also be looking to tap revenues from other sources and not just Instagram and Whatsapp. There is a very real danger that introducing ads in either off these applications might hurt Facebook in terms of lost users. Just recently, Facebook released its new tool for advertisers called Atlas which can help them target a more specific audience and also using the user data on mobile. The company could be heading in a similar direction in future.

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