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The European Union rose “only” 0,4 percent in Q1 of 2018

Last week I talked about America`s fantastic growth of 4,1 percent on quarter in Q2 of 2018, and this is only the beginning. It is no doubt; President Trump must be doing something right. But, what about the European Union?

GDP in the European Union rose «only» 0,4 percent on quarter in the first three months of 2018. Not much to write home about. But the growth have never been above 1 percent since the financial crisis in 2008.

The European Union reached an all time high of 1,30 percent in 1999 and that is right before the tech bubble burst. Since then it has been a dead fish, reaching an all time low of -2,60 percent in the first quarter of 2009.

At the same time we can see that the unemployment rate reached a record low of 6,80 percent in February of 2008, and that`s right before the financial crisis. It reached an all time high of 11 percent in February 2013, but in May this year it fall down to 7 percent again.

This isn`t good enough if we are living in a capitalistic world.

The European Union in Brussels are nothing more than unelected bureaucrats. Draghi and the ECB have, just like Japan and the U.S «printed» a lot of money, and will continue to do so. If they can`t turn around the ship, they need to consider a strong cheerleader.

European Commission President Jean-Claude Juncker had a meeting with President Trump last week. They were talking about trade, free trade and tariffs. Mr Trump`s goal is to make better deals so both the U.S and the EU can take more profit and prosper.

I think that the EU should be glad for that and they need to hurry up. The U.S is the world`s third biggest exporter, yet exports account «only» for 13 percent on GDP. Exports in the U.S reached an all time high of 215328 USD million in May this year, which is pretty impressive.

The EU has 28 member states and the biggest among them all is Germany (21 percent of total GDP), the United Kingdom (15 percent), and France (15 percent).

Exports of goods and services account for 46 percent of GDP while imports account for 42 percent, adding 4 percent of total GDP. But this is about to change. If the UK contribute with 15 percent of the total GDP in the EU, then what will happen to their growth after Brexit?

That being said; nor is the UK a success story. The British economy grew by 0,1 percent in the first three months of 2018 and well below 0,4 percent in the previous period. It is the lowest growth rate since a 0,1 percent contraction in Q4 2012.

The largest contribution to growth in the UK was from household spending at 0,2 percentage points. From the production side, the service industries made the largest contribution to GDP growth, followed by production.

Agriculture, the smallest component within the output approach of GDP made no contribution to growth to one decimal place, while construction deducted from GDP growth. The service industries increased by 0,3 percent.

Positive growth was recorded within all sub-sectors of the services industries; distribution, hotels and restaurants (0,1 percent vs -0,1 percent).

President Trump have repeatedly said that the EU have treated the US very bad. I have written many articles about that long before Mr Trump`s inauguration. The European Commission has fined Google €4,34 billion for breaching EU antitrust rules this month.

In May 2009, Intel was imposed with a 1,06 billion euro fined for abusing its market dominance on central processing units. Microsoft has been in trouble with the Commission on several occasions. In 2004, the Commission ruled that Microsoft had abused its market dominance.

In 208, the Commission fined Microsoft nearly 900 million euros for charging «unreasonable» royalty fees. In 2013, another fine of 561 million euros was imposed on Microsoft. This time for failing to comply with the Commission`s ruling that it had to allow users to more easily choose a prefered web browser.

The European Commission fined Facebook for 110 million euros in May this year in relation to its takeover of WhatsApp. Facebook acquired the messaging service in 2014 for $19 billion, but provided the Commission with misleading information about the acquisition.

In August 2016, the Commission ruled that tech giant Apple had received illegal tax benefits from Ireland worth up to 13 billion euros. Ireland was ordered to recover the unpaid tax from Apple, plus interest.

As early as 1966, British Politician Tony Benn said that «Communism run by commissars from Moscow did not work, and nor will capitalism run by commissioners in Brussels. Both deny people their right to develop in their own way.»

Now, under President Donald Trump, big companies like Apple are moving home to the United States with billions of dollars. Apple alone, are bringing in $230 billion. They will build new plants and a magnificent campus.

They will spend their money wisely and the money will be in the U.S. All this is possible because of Trump`s tax cuts and reforms. This is how you make growth.

 

 

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Instagram`s audience is growing much faster than Facebook`s and Instagram can be Facebook`s best growth engine

Mark Zuckerberg and Facebook started its business 13 years ago on February 4, 2004. Many things have happened since then, and Facebook are now among the biggest corporations with its 2016 Revenue of US$ 27,638 Billion. The success continues.

The social media giant are growing like never before. Ad revenue grew by 51% YoY in Q1 2017. It jumped from $5,2 Billion to $8,85 Billion. Total revenue climbed 49% and earnings went from $0,60 to $1,04.

 

 

It is a big surprise for many to see that Facebook is still adding DAUs and MAUs (active users). Monthly active users have jumped to over 2 billion and their revenue will follow. Many companies are trying to take Facebook`s throne, but the giant are very strong and knocks off all challengers.

Snapchat is the latest challenger, but Facebooks Instagram seems to be strong in this market and will also contribute to Facebooks revenue growth. Instagram has over 700 million MAUs and 400 million DAUs.

Instagram is integrated in the social media business model and they have been selling ads for four years now. Instagrams audience is growing much faster than Facebooks audience and Instagram can be Facebook`s best growth engine.

Instagram is not the only growth engine of Facebook. They also have Messenger, WhatsApp and Oculus VR, and their next step will be to compete with YouTube.

Investors love the social media giant. In January this year, Facebook`s shares were trading at $115 per share and on Monday their shares were trading at $166 per share. The giant have jumped over 40% so far in 2017. Compare that to the rise in the benchmark S&P 500 index during the same period and see for yourself.

Facebook Inc is expected to report earnings on Wednesday 26 after market close. The report will fe for the fiscal Quarter ending June 2017. Earnings forecast for the quarter is $1,13 which is a big jump from $0,76 in the same quarter last year.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Facebook will start to earn money on Oculus Rift

More reports from big blue-chips stocks this week, and the one and only social media darling Facebook is out with a new fourth quarter earnings report on Wednesday 27, after the close. Will Facebook continue to grow?

I think they will continue to impress. Last year they reported 1,55B monthly active users (MAU). Thats an impressive jump of 14% YoY and not bad compared to Twitters 320M MAU`s last quarter.

Facebook acquired WatsApp, Instagram and Oculus Rift, and their instant ads will give more value back to the advertisers. Only last two years, Facebooks revenue is up about 40% and it doesnt seem to slow down anytime soon.

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The Estimize consensus calls for EPS of $0,69, which is a penny higher than the Wall Street consensus and an increase of 11% over the past three months. Revenue expectations of $5,383B have also been lifted in that period by 6%, and are $27M ahead of the Street.

Its gonna be interesting to hear more about WhatsApp, Instagram and Oculus Rift on Wednesday. How are they contributing? Facebook acquired WhatsApp and if you ask me, they burned a huge amount of money on that deal. Thats good for Jan Koum of course, but what about Mark Zuckerberg and Facebook?

In my recent article about that deal, I asked the following question; why should people buy 99 cents for WhatsApp when they have Skype for free? Not only that. There are many others on the market too. One of them is Facebook`s messaging service which is very popular.

It`s not a surprise for me to see that Facebook recently dropped the front-door charge to make it available for free for anybody in the world who wants it. What they are doing is testing out a new B2C platform, but it remains to see if that can bring in some revenue for Facebook.

The photo-sharing app Instagram is another player, and have been in the Facebook-family since 2012. So far, Facebook has not revealed its revenue from Instagram, so It`s gonna be interesting to hear more about that on Wednesday.

I`m also exited to hear more about Oculus Rift. Facebook paid $400m in cash plus 23,1m Facebook-shares for the maker of the Oculus Rift headset, with a further $300m in incentives if they hit certain milestones in the future.

Oculus Rift will be launched on March 28, 2016, so its only two months left. Its interesting to see how much they are willing to pay for each company and what they give in return. Spending 0,11 WhatsApp (or two Instagrams) on Oculus Rift was a big surprise for many investors.

Facebook has been slumping so far in 2016, but most of the investors call Facebook for a «buy».

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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WhatsApp is bigger than Twitter and LinkedIn combined

WhatsApp is founded by Jan Koum who is now working as a Director in Facebook. Everybody was shocked when Mark Zuckerberg and Facebook acquired WhatsApp for $19 billion in February 2014, and that was just the service of the app.

WhatsApp is now bigger than Twitter and LinkedIn measured with MAU`s.

Jan Koum revealed on Facebook that WhatsApp has more than 900 million monthly active users. That`s up more than 200 million since the beginning of this year, which means that the messaging app could reach the magical number of 1 billion sooner than we know, and probably before the end of the year. What is that suppose to mean?

It means that Facebook have control over two of the biggest messenger apps in the world. In comparison; Tencent`s WeChat is coming in at third with 600 million MAU`s. Nr 4 is Viber (aquired by Rakuten) with about 240 million MAU`s.

 

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(Picture: WhatsApp`s Monthly Active Users in Millions)

 

But WhatsApp is a disaster if you measure their revenue with both Twitter and LinkedIn. 900 million users doesn`t automaticly mean a multi billion dollar business. Not so far. WhatsApp generated $15 million in revenue in the first half of 2014 and had a record loss of $232,5 million. As you may know; WhatsApp is charging $1 dollar per year for using it.

Facebook`s goal is 1 billion MAU`s and CEO Mark Zuckerberg has asked investors for more patience regarding their monetization. He said he ask for some patience on this to do this correctly. The fact is that Facebook`s messenger is bigger than WhatsApp, so I bet they will merge those two to make a megaplatform in the messenger world.

So far, they have been focusing on their user base and once they have reached their goal of 1 billion users, they will try to turn this into a new money-machine. It can be a B2C channel that can be one of Facebook`s main source of income in the future.

I personally often chat with many people from Asia, and all of them (100%) use Skype. Facebook`s messenger is more popular in the U.S than WhatsApp, but WhatsApp is more popular in Europe and Asia than Facebook`s messenger. Anyway, the number of similar App`s will not make it easy for Facebook in this market, but their strongest card is their user base.

Facebook offered Snapchat $3 billion but rejected. Now, Snapchat is trying to raise $500 million at a $20 billion valuation. The company has become a major competitor to Facebook`s News Feed. In comparison; Facebook acquired Instagram for $1 billion and have over 300 million users with a $35 billion valuation.

Snapchat is expanding rapidly, and its stories product for broadcasting photos and videos is a big hit for many teenagers. Snapcash is also very popular that lets friends transfer money to each other through their Square Cash. Snapschat`s new Discover portal is also very popular, which lets you collect snap-formatted content from CNN, Vice, ESPN and Comedy Central.

There aint no doubt; these apps lets you call a friend, a taxi, you can pay movie tickets, pay to your friend, shop with it, search and much more. Instead of using many different apps and many different passwords, these apps can make your life more easy by using one single chat. It`s a hit.

With Facebook`s massive user base, they can merge Facebook`s messenger App with WhatsApp and turn it into a multi billion dollar machine.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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Facebook is the KING of social media networks

Facebook is the KING!

The king of social media is without any doubt Facebook. The stock is up over 300% since 2013. Mobile ads helped Facebook`s revenue and stock price to skyrocket and their growth prospects comes from VR, Messenger and payment. Financial services are also coming.

Facebook has 1,5 Billion monthly active users, which is more than the world`s most populous country; China. Awesome!

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Of course I am impressed. Facebook has been very aggressive and proactive in their development of advertisement. This is not what you can say about Twitter. Facebook has differentiated their advertisement offerings within the News feed.

This is what Twitter needs. A product like Facebook’s News feed, and 1,5 billion active users, and about 1 Billion DAU`s. They have differentiated the News feed, and these differentiated News feed can help marketers with targeted ads. What marketer in this world would say no to that? Their online advertising growth is accelerating.

Facebook continue to offer services focused on people, marketers and developers and their MAU`s speaks for itself. People are engaged in their activities in all their various platforms which is Facebook, Instagram, messenger and Whatsapp.

Why are people so active on these platforms? People are active to share their opinions, ideas, photos and videos and to engage in other activities. They can also connect, discover and communicate with each other on mobile devices and personal computers.

Another innovation is Facebook’s e-commerce functionality where you can simply buy products direct from your own Facebook site. This comes on top of Facebook’s Instant Articles publishing platform. All this will increase their advertising revenue, which is expected to have increased 50% YoY, ex-FX.

In April 2014, Facebook acquired ProtoGeo Oy, which is a Helsinki-based developer of software for smartphones. In July 2014, they acquired Oculus VR Inc, which is an Irvine-based developer of virtual mobile gaming application software, and as you may know; they are the owner of WhatsApp.

What we see in these markets is only the beginning. An early stage. They have many opportunities as long as they have a massive user base. F or example, the online dating market generated $2,2 Billion in revenue in the U.S in 2014. Facebook can easily take a huge stake in this market if they want. That comes on top of travel, utilities, messenger and e-commerce to name a few.

Facebook will report earnings on Wednesday. Facebook`s earnigs per share forecast for the fiscal Quarter ending September 2015 is $0,35, which is up from last years $0,32. Revenue is expected to jump +37% YoY, to $4,176 million, which is a growth of over 40% since last year.

Facebook after the bell on Wednesday 4 November 2015.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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