Facebook Shares Have Grown 227% in Four Years - Time to short?

Facebook Inc (Symbol: FB) was founded in 2004 and has connected 1.7 billion people across the globe to date. The social media king has launched a new app for teens to draw in more youngsters and ward off threat from the competition. FB has recorded remarkable growth since it held its IPO four years ago.

Facebook launches a new app for teens, Lifestage

Facebook has rolled out a new stand-alone social media app for teens, named Lifestage. The app has been developed by Michael Sayman, a Facebook employee who is 19 years old. The app is exclusive for users below 21 years of age.

The app uses video profiles unlike the current one that uses text profiles. Users won't need to create Facebook accounts but will be required to share details like their phone numbers and their school's name to make a start on Lifestage.

This is a measure by Facebook to ward off threat from Snapchat's increasing popularity. The new app also emphasizes Facebook's tune up to online videos which is the most profitable part of digital advertising.

Former manager of Facebook Live starts his own live-streaming business, Alively

The former head of Facebook Live, Mr. Vadim Lavrusick, has decided to strike out on his own by launching a live-streaming app, Alively. The app serves users who wish to share live videos with few people as opposed to the whole social network. Alively was launched in USA on Apple mobile devices on August 23.

Mr. Vadim played a key role in Facebook's live-streaming strategy beginning last year when he introduced Mentions, a feature for public figures.

Facebook faces tight competition in live-video business with dozens of companies trying to tap into this new and big thing in social media. They include Live.ly, Periscope and the latest one, Alively.

Facebook stock has grown 227% in four years

Facebook made its IPO on May 18, 2012 offering 421,233,615 shares at a price of $38. It was the biggest IPO in the history of Internet and technology. As can be seen, the stock has performed tremendously by growing steadily up to the price of $124.37 at the date of this report. That is a remarkable growth rate of 227% in about four years.

Facebook's 12-months rolling EPS has been growing: $1.29 (12/2015), $1.63 (3/2016) and $2.09 (6/2016). P/E ratio has also grown during the same time: from 81.13 to 70.00 to 54.68 respectively.

Facebook's total revenues, all of which it generates from sell of advertising places to advertisers, grew from $5.4 billion in Q1 2016 to $6.4 billion in Q2.

As recently reported by Barron's, FB has the capacity to grow 20 percent in the next year.

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