Facebook Stock Investment Thesis With Libra Coin | Summary and Q&A

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June 20, 2019
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Value Investing with Sven Carlin, Ph.D.
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Facebook Stock Investment Thesis With Libra Coin

TL;DR

Facebook's launch of its cryptocurrency, Libra, has the potential to significantly increase the company's value and revenue through easier and faster transactions. However, its success hinges on factors such as networking effect, scale, and regulatory challenges.

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Questions & Answers

Q: What makes Facebook's Libra different from other cryptocurrencies?

The difference lies in Facebook's scale, power, and user base, making Libra a potentially powerful and widely used cryptocurrency. Additionally, Libra aims to be a stable coin backed by real assets, allowing for greater stability in transactions.

Q: How might Libra impact Facebook's revenue and market capitalization?

If Libra succeeds and transacts reach significant levels, Facebook's net profit from the project in ten years could be around $20 billion. This could potentially add 75% of Facebook's value to its market capitalization.

Q: What are the regulatory challenges faced by Libra?

Libra is expected to face regulatory scrutiny from banks, national banks, Congress, and regulatory bodies like the SEC. These challenges could potentially impact its adoption and success.

Q: How does Libra compare to Bitcoin?

Unlike Bitcoin, Libra is a stable coin backed by real assets, making it more suitable for transactions. Bitcoin, on the other hand, has been primarily driven by speculation and investment.

Summary & Key Takeaways

  • Facebook has launched its cryptocurrency, Libra, with the aim of creating faster and easier transactions to cater to billions of non-bank users worldwide.

  • Libra's success could potentially boost Facebook's revenue, with estimates suggesting a $19 billion cryptocurrency revenue by 2021.

  • The scale and power of Facebook's user base, along with partnerships with major companies, make Libra a powerful and potentially profitable coin.

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