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Analysts are bullish on Facebook's Tuesday crypto launch



Facebook CEO Mark Zuckerberg makes his keynote speech at Facebook Inc's annual F8 developer conference in San Jose, California, USA, April 30, 2019.

Stephen Lam | Reuters

Wall Street analysts eagerly expect Facebook's possible disclosure of its long-awaited cryptocurrency payment plan on Tuesday. According to various reports, the company is preparing to finally reveal what it calls Project Libra with partners, including companies such as Visa and Mastercard.

Facebook is the best result of the so-called "FAANG" stocks this year and is over 40% year to date. "FAANG" refers to a group of tech and internet stocks that include Facebook, Amazon, Apple, Netflix and Google.

The social media giant has also been under tremendous pressure from government authorities due to various privacy issues and most analysts believe the crypto project can give the company a large lift in more ways than one.

"We believe this can prove to be one of the most important initiatives in company history to unlock new engagement and revenue streams," said RBC analyst Mark Mahaney.

Other analysts agreed.

"We believe this is an important initiative for Facebook and one that has the potential to put the company ahead and center in non-advertising areas, including trade and financial services that significantly expand its overall addressable market and growth prospects. "SunTrust analysts say. . "It reduces the possibility of regulatory control and resistance to antitrust grounds (especially in the current environment), given Facebook's consortium approach and the diverse nature of the partnership."

Facebook sees not only being a player in social media space either, according to analysts at moffett nathanson.

"Facebook has its eyes set on becoming the world's leading e-commerce platform," they said.

Here's what other analysts say about Facebook's crypto launch:

SunTrust- Buy rating

"We believe this is a great initiative for Facebook and one that has the potential to put the company ahead and center In areas outside of advertising, including commerce and financial services, expanding its TAM and growth prospects significantly … It positions the company as one of the key players at the heart of cryptographic development and a future architect for the future of this emerging and important trend. currencies have existed for several years now, no other company could bring the combination of the user's scale, fire support and balance, which in our opinion … can reduce the potential for regulatory control and resistance to antitrust grounds (especially in the current environment) , given Facebook's consortium approach and th We have a varied collaboration between partners. "

MoffettNathanson- K b rating

"We believe that an encryption-based payment system based on Facebook can be especially useful in countries with high inflation / unstable banking systems and land transport. Thus, Facebook's trading ambitions do not seem to be limited to developed markets. Facebook is keen to become the world's leading e-commerce platform. "

RBC-Outperform rating

" "We believe this may prove to be one of the most important initiatives in the company's history to unlock new engagement and revenue streams and we plan to provide an analysis of White Paper to help investors analyze the underlying crypto economy in the token. We believe that Facebook will use crypto to facilitate a platform for: 1

) Payments; 2) trade; and 3) applications and games. And we believe that this strategy is a multi-step process that starts focusing on user input via messaging and leads to additional earnings with each subsequent, deeper step – a similar strategy that has worked well for Facebook's Core Advertising business. "

Bank of America- Buy rating

" With more than 2.5 billion users, Facebook and its partners can be a significant acceptance of crypto competition and a remarkable addition to the Facebook App ecosystem. Although many issues remain on ease of use and potential adoption, as there are highly viable online payment options in place, the consortium is likely to have significant pressure / visibility and could be a medium-term e-commerce activity catalyst on Facebook. We see the launch as an important initiative for the company as it expands a more private messaging ecosystem with eCommerce capabilities. "


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