The stock could rise in the near term. But I don't think that meta is doing enough to move the middle needle in their digital advertising business. This is a large bet with an uncertain payoff over an uncertain time period. To look at this purely on a valuation basis may provide some shorter term traders with a gain because it is so oversold. Over the long term, I think that the capital allocation of this company is still heading to thwart any kinds of gains they could get from ad sales.
Just because a stock lost 98% of its value doesn’t mean it's cheap. Sometimes the market becomes efficient.
Asit Sharma joins Ricky Mulvey to look at some justifiable reasons why stocks dropped last year and which strong businesses that may have been swept up in the tide. They discuss:
- Carvana’s boom and bust, and the takeaways for investors - If Zoom has a sticky product - How Roku is addressing a tougher advertisement landscape - Meta’s valuation, and questions about its leadership - Mindset advice if you want to be a contrarian investor
Companies discussed: LULU, ZM, MSFT, CVNA, ROKU, NFLX, META
Aswath Damodaran’s blog on Meta: https://aswathdamodaran.blogspot.com/2022/11/meta-lesson-1-corporate-governance.html
Host: Ricky Mulvey Guest: Asit Sharma Engineer: Tim Sparks
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