THINKING OUT LOUD

Hunting for 10 baggers

Do you remember when Facebook IPO’d ?

It was mid May 2012 & the stock was priced at $38 per share, valuing the company at $104 billion.

Facebook’s 2011 financials said it had revenue of $3.7 billion and $1 billion net income & they boasted 847 million active users.

Within 3 months, the stock had halved to $19 and had a market cap of $54 billion.

Since those lows in September 2012, the stock has risen 10 fold in 7 years. Is the $600,000 house down the road whichwas bought back then, now valued at $6 million ? (I couldn’t help myself).

Whom are the next 10 baggers in the public market today?

Snapchat has a market cap of $24 billion (the same value as its IPO day) with 2019 revenues being $1.7 billion while losing $1 billion and having 360 million active users.

and then there’s Spotify, with a market cap of $28 billion (only 16% higher than its “IPO price” 22 months ago), it has 250 million active monthly users though importantly, it has 113 million paying subscribers. It with €6.8 billion sales and a net loss of €186 million.

In the next 7 or 8 years, can these stocks achieve market capitalisations of $280 billion, let alone match Facebook’s current $600 million?

This is not be considered advice and doesn’t constitute detailed analysis.