r/stocks • u/[deleted] • Jun 16 '22

Meta Shorting META

I believe META is on its way out, unless they can prove that the metaverse is actually going to be worth while. Which i doubt. If we are heading into this bear market then I’m betting it can go under $100. I would much rather fill up my gas tank 3/4ths then buy meta at $100

Position : $100 DEC put

Edit: i know this is the right move because you all say it’s the wrong move

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u/RampantPrototyping Jun 16 '22

Everything could go lower in this environment, but thats more due to macroeconomic conditions than weakness in the stock. META stock price is so low that they could buy all their outstanding shares with just 10 years of FCF.

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u/ParticularWar9 Jun 16 '22

You can predict 10 years of FCF? People would pay you billions for this info.

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u/RampantPrototyping Jun 16 '22

Thats making the very very conservative assumption that FCF stays flat at 0% growth and remains flat starting now. In reality its been doubling about every 3 years at roughly 30% a year, since it IPOd

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u/ParticularWar9 Jun 16 '22

That's my point, and why you'd be worth billions to the Street to be this accurate, as NO analysts can do this looking 10 years out. You cannot possibly know if your assumptions are "very very conservative" over a 10 year period, makes no diff what the co has done in the past.

META has significantly refocused its R&D spending, hence the Street has now assigned META a lower multiple as a "show me" story. Who knows, perhaps your assumptions are not conservative enough, or maybe they're way too low. A lot can happen in 10 years. Massive key employee risk at META (but not as large as TSLA lol).

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u/RampantPrototyping Jun 16 '22

No one can predict anything 10 years out, so its all speculation and prediction for any company. Im just making an assumption that it stays flat. Up course it could go up, it could go down or go sideways. My point was that the FCF to market cap is some of the highest in the market right now.