We Study Billionaires - The Investor’s Podcast Network TIP249: The Intrinsic Value of Facebook w/ John Huber (Business Podcast)
Jun 30, 2019
In this engaging conversation, John Huber, founder and portfolio manager at Sabre Capital Management, shares his expertise in Buffett-style value investing. He dissects Facebook's intrinsic value and predicts its future growth while pinpointing major threats to the platform. The discussion covers Facebook's innovative advertising model, competition with other tech giants, and the implications of digital versus traditional advertising. Huber also dives into the potential of Facebook's payment processing and the importance of valuation in crafting an investment portfolio.
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Facebook's Business Model
- Facebook's business model is similar to traditional media, showing content and selling ads.
- A key difference is Facebook's user-generated content, leading to high profitability.
Facebook's Growth
- Facebook has seen absurd growth rates, with 48% annual growth over the past five years.
- This raises questions about sustainable growth in the next 5-10 years.
Digital Ad Competition
- Facebook, Google, and Amazon are the main digital advertising players, with varying growth rates and sizes.
- All three benefit from the expanding digital ad market.