The Most Relevant Items In Facebook's Q4: 'It's Clear They're Killing It'
"I don't really know how to explain the accounting guidance,” Pachter said. “It's more complicated than it's worth to explain. Instead of paying equity and taking a tax deduction, Facebook is paying out less in stock and covering the taxes for the recipients. That reduces the number of shares granted (by the value of the tax deduction) and flows through the tax rate."
Regarding the VR lawsuit judgment, Pachter commented, "The verdict isn't all against Facebook. Half is Facebook, $50 million is against Oculus, $50 million Palmer Luckey and $150 million against Brendan Iribe. It is unlikely that Facebook will indemnify the two Oculus founders, but they might have to pay the Oculus portion, so FB’s liability is either $250 million or $300 million.”
"Of course, they can appeal, and likely will do so," he added. "Also, Facebook has $29.5 billion in cash, so this is not a huge line item for them. The $300 million (maximum) judgment is around $0.10 per share."
Pachter, who spoke by phone before the Q1 conference call, concluded, "Advertising was impressive. I haven't gone through the slides to figure out where it came from, but it's clear they're killing it. Same on MAU/DAU. Will have a better idea after the earnings call."
Facebook's stock was trading up more than 3 percent after closing the regular session at $133.23.
Latest Ratings for FB
|Apr 2017||Credit Suisse||Maintains||Outperform|
|Mar 2017||Barclays||Initiates Coverage On||Overweight|
|Mar 2017||BTIG Research||Upgrades||Neutral||Buy|
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