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Facebooks linking with Apple-the implications
Facebook on the Nasdaq stream chart
Apple trading green
Reaction on the news of the link up
The market reacted very well to news over the weekend that Apple intends to fully integrate Facebook into its operating system as it has done with Twitter.
Many technology stocks reacted to this news, with Facebook being on top of the list. Will this reaction by the market hold? What are the long term implications of this?
Long term implications-My perspective.
This is not to be taken as investment advice,it is just an outsiders personal point of view.
Facebook getting into a relationship with Apple means :
1. There will be more confidence in the company from an investors point of view.This is based on the fact that,if a successful company like Apple has the confidence to work with Facebook,then Facebook might be worth investing in.
2. On a practical level,if Facebook is integrated into the Apple Software,then its position in business gets a major boost in that its client base grows due to the facilitated accessibility.
3. If point number 2 is correct, then this automatically translates to greater revenue. The more revenue Facebook earns, estimated to be $500,000,000 per every $1 the Facebook shares go up, then Facebook will have more funds to develop its business model.
Would I invest in Facebook?
Given the above facts and seeing how the market reacted to the news of its intergration into Apple's software, I would put Facebook on my watch list. It is still in my opinion a very risky investment in that, seeing as it is a social network based chiefly on Fad and development in technology,there is no telling whether Facebook is the be all and end all of social networks or whether it will become history like Myspace or face stunted growth like 4 Square. Note must be taken that there are still strong contenders in the social networks arena like Linkdin,Google+ and many other smaller networks. History has proven that these companies could tank with out notice depending on social trends which are near impossible to predict.
My verdict is therefor,trade with caution,do your due diligence by studying the company closely,watch trends and make wise informed decisions before jumping in to invest in the company.