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Reasons Investors Should Not ‘Unfriend’ Facebook

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    Cantor Fitzgerald Managing Director Youssef Squali on the outlook for Facebook.

  • Duration 4:58
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Last night's earnings FaceBook analysts quickly hit the -- friend button on the stock.

Or in price targets in cutting ratings.

As we just talked about though the stock dropped at the open and then moved all the way back up to above the flat line around 1 PM eastern we've got somebody who went against the grain.

Raised his price target and reiterated his buy rating.

What did he see in the numbers of others didn't use -- -- is the managing director and global head.

Of the Internet and media group at Cantor Fitzgerald that it okay let's get right to it what do you see that did -- -- like the others -- Well so couple things first of all we thought the quarter was really really good I think it's.

Very easy to forget that this is a multi billion dollar company yet it's growing up 40% with a 60% margin you don't have too many companies of that -- now.

And in addition you look at the metrics they really be on every single metric.

If you wanna be a -- refused so compared with some whisper numbers that frankly were more buy side related -- sell side.

I think some of these whisper number's got exaggerated you have that.

Well senator what about -- stop operating expenses because a lot of people were spoke that they were too high why didn't that -- -- It didn't bother me because.

This is any seven year old company.

You want them to spend you want them to be aggressive you want them to take risks this is not a -- -- this is an Internet company competing -- Google competing with Linkedin -- Amazon.

Frankly we we think that so far there are -- either return on invested.

Capital has been very high and that will come to that mark and Sheryl continue to -- to to invest.

-- what does get -- slightly concerned about this company is there any FaceBook fatigue that you see where people.

The user numbers go down for the month.

Right that's something that we really monetary.

Very -- Very much lost my engagement continues to be very solid -- 60% of their monthly users coming back to the site every single day.

That hasn't really changed now.

Going forward.

If we notice that daily usage or younger crowd is starting to use the site less than that would be of concern to us we have not seen that yet.

-- -- what about -- the other -- go ahead quickly I was I was just gonna say and the other potential risk here is the privacy issue right we saw what happened when.

To instead Graham and to their user base when they decided to change there privacy settings so.

Something like this could also impact FaceBook but we have not seen anything to that effect just yet.

What about mobile ad sales it's not just affecting for FaceBook everybody's concerned about that whether they're topping off for not whether -- hit some kind of ceiling argue.

Concern or do you see that there is no ceiling that it -- the sky's the limit.

Look by our math they're generating about fifty cents fifty cents per member per month on mobile.

I think they can do better in that.

Certainly.

This is a business that they weren't even in about nine months ago last quarter he generated over 300 million dollars and frankly that number was slightly ahead of where we where.

There were some by insiders hoping for 350.

To 400 I think that was more wishful thinking than anything else and I think that's what.

Created to stock after after the print.

Are what impresses you most about this company lately I've been a very impressed by the fact that they started up a business -- what appeared to be the blink of an -- and that was their gift business where.

You can just press on some and then quickly ordered them a small bouquet of flowers at their face -- somebody.

That turned into -- 200 plus million dollar market within a couple of months that impresses me what impresses you.

Well I mean that's that's exactly yet so -- so many event.

Pictures of the growth of this company cut embark on frankly.

Some we've identified so e-commerce for instance is one search for social work sort social search is the other.

But there -- a number of others that they're gonna use that money that David was talking about before that -- that that investment.

To -- uncover some of these other opportunities but search is something that I think.

Could actually turn out to be -- multi billion dollar opportunity for FaceBook or over the long run.

Use -- we gotta we gotta go but I just -- -- or anything that Zuckerberg is thinking about now any big sort of out of the box saying because he's one of the few since Steve Jobs passed away he's one of the few.

Really big out of the box thinkers there.

I mean hard to figure that out I mean at this point but I would say really this is more of a mobile company than anybody realizes.

And I think five years from now.

It's gonna be a play on two things one mobile advertising in general and two e-commerce don't be surprised if half the business over time.

Over the next five to ten years out of this thing.

-- out of this company -- e-commerce which last quarter degenerated maybe less than five million.

-- Cisco Ali great to see -- use -- thanks so much from Cantor Fitzgerald appreciate and care if you set as I.

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