The Upside for FB Stock
Despite being only 19 years old when he created Facebook, Inc. (NASDAQ:FB), Mark Zuckerberg has grown into one of the most competent and successful chief executive officers (CEOs) alive. His success is clear when you look at the value of Facebook stock, but also at what he has planned for the company. So long as Zuckerberg is with Facebook, I will remain bullish on FB stock.
Trust in the founder, that’s my motto. Think about what it takes to conceive companies like Facebook or Tesla Motors, Inc. We tend to mythologize founders/CEOs, as if their success was inevitable, but Zuckerberg and Elon Musk weren’t guaranteed success when they were dreaming up their companies; instead, they willed these firms into existence.
Both Zuckerberg and Musk spotted problems that needed solving or gaps that needed filling and acted to fulfill their vision. By using their passion as fuel and their intellect as a compass, they were able to gain enormous wealth, fame, and success.
And neither seems to be slowing down. That’s the beauty of Facebook; it is continuing to benefit from the vision and skill of Mark Zuckerberg. He has extended the idea of a social persona, of sharing your experiences, to the emerging realm of virtual reality.
Oculus Rift and Facebook Stock
Most of the market still perceives virtual reality (VR) technology as a niche item. Facebook stock rose 36% this year, but it was off the strength of its publishing business and advertising revenue. Investors still haven’t priced in the potential of “Oculus Rift,” Facebook’s VR headset, but they will.
There are two practicable business lines for Oculus Rift and both could spell enormous returns for FB stock. The first is entertainment.
As early as 2016, Facebook is releasing a version of its VR headset as a gaming console that will compete against Microsoft’s “Xbox One” and Sony’s “PlayStation 4.”
From movies to video games, Oculus Rift would provide users with an immersive experience that is unparalleled. For instance, Facebook just signed an exclusive deal with Harmonix Music Systems for Rock Band VR. That’s right, you could soon step onto a VR stage and rock out in front of thousands of people—or at least it’ll feel like you’re doing that. (Source: “Why ‘Rock Band VR’ Matters to Facebook and Oculus,” Fortune, December 8, 2015.)
Another potential entertainment use may be to watch a sporting event and walk around in the arena, seeing the play from multiple angles and pausing the action whenever you want.
To experience all of these entertainment options via virtual reality, consumers will have to buy the hardware, opening a huge and immediate revenue stream for Facebook.
Beyond the entertainment aspect, however, Oculus Rift has huge potential as a communication tool.
Social Sharing Could Keep Pushing FB Stock Higher
Mark Zuckerberg often says that Facebook is more than a company to him; it is a mission to foster unity in the world by connecting people. In that spirit, I can see him turning Oculus Rift into the ultimate tool for communication.
Technology to create immersive content is pivotal to the rise of virtual reality. By capturing 360-degree views in a video, Facebook would be able to recreate a moment that can be shared with family, friends, or the world at large. (Source: “Facebook – Press Release,” Facebook, Inc., March 25, 2014.)
Picture two people, on opposite sides of the globe, putting on VR headsets and launching a Skype-like app. The magic of Oculus Rift could virtually put them in the same room, giving a sense of intimacy that’s lost via two-dimensional screens.
That future could be closer than we imagine and Mark Zuckerberg could help us get there.