Building Engagement
"On the payment side is, it's just about building engagement. So, they announced this last week about being able to really, mostly it's going to be sending money to friends," Munster said.
"I am sure a lot of college kids will love it if their parents send them money, but I think the real core use case is: you had dinner; you are sharing a kind of tab. So that's the use case for it. They don't charge for that, and so really, what they want to do is build engagement."
He continued, "And I think that's kind of one of the big themes that's going to emerge this week is a shift in Facebook from being a platform of $1.4 billion users, they can do a lot of different things like payments, to more of a platform where they can find different ways to monetize it. So, initially on the payment side, they are not going to make a ton of money, but over time they'll just monetize the broader platform."
Valuation Is Reasonable
Munster was asked if Facebook's valuation seems reasonable to him. He replied, "It does. I mean, if you look at the growth rate last quarter, they grew at 55 percent. This year, the Street is looking for them to go around 30 percent. That number is probably a little bit low. The reason why market cap can be so big is that this story has some huge catalysts.
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