As the social-networking giant cranks up its acquisitions engine, some traders are left wondering if the company is walking in Google (GOOG)’s footsteps.
After two major deals this week, including the acquisition of virtual-reality tech company Oculus VR for $400 million in cash and $1.6B in Facebook (FB) stock, and word that the company plans to explore technology that uses satellites and drones to spread Internet to third world, Facebook is moving beyond its social media roots.
Brian Kelly of global macro investment firm ‘Brian Kelly Capital’, and who currently holds a long FB position, said on CNBC on Friday that based on the future-looking investments that Facebook has been making he sees the company “as a mini Google at this point.” Kelly also said that Facebook is “no longer just the social network stock. There’s more to this company.”
As Colin Sebastian, an analyst with R.W. Baird Equity Research mentioned in a note to investors couple of days ago, Facebook’s Oculus acquisition, when compared to Google’s merger with video sharing service YouTube in October 2006 and Motorola Mobility in May of the same year, is indeed “reminiscent of Google’s strategy to focus years ahead of the curve, with a willingness to take some risks along the way.”
Earlier this year, Facebook also bought messaging service giant WhatsApp for $19 billion in cash and stock.
Trading at a multiple of 36X next year’s estimated earnings, FB shares have been on a tear, rising to a high of $72.59 a share this year, way up from a 52-week low of $22.67.