FIN 534 week 9 assignment 1 financial research report(Financial Investment Opportunity) latest update

A Financial Investment Opportunity-(Facebook, Incorporated) By Financial Management-FIN 534 June 6, 2016 Instructor-DR Sean A. Stanley Campus-North Charlotte Campus Strayer University-Spring 2016 Introduction Facebook Inc. is a mobile application and website that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers. The company has 1.04 billion active daily users (DAUs) on average as of December 2015, an increase of 17 percent compared to the previous year. The company was founded on February 4, 2004, in Cambridge, Massachusetts and was later incorporated in Delaware in July 2004. Facebook, Inc. is headquartered at 1601 Willow Road, Menlo Park, California. Facebook first went public on May 8, 2012 with a class A common stock listed on the NASDAQ Global Select Market under the symbol “FB.” Mark Zuckerberg is the current CEO of the company with Dustin Moskovitz, Eduardo Savarin, Andrew McCollum, and Chris Hughes as co-founders. As of December 31, 2015, the company has 12,691 employees. The company share price closed at $118.47 as of June 3, 2016 at 4:36 PM Eastern Time. Facebook serves as a channel through which people discover and learn about what is going on in the world around them, enables people to shares their opinions, ideas, photos and videos, and other activities with audiences ranging from closest friends to the public at large. With the growing public interest in modern technology, and Facebook being one of the leading platforms, I believe that investing in such a lucrative company will be the best decision investors would take to gain more returns on their investments. 1. Provide a rationale for the stock that you selected, indicating the significant economic, financial, and other factors that led you to consider this stock. This paper will focus on the rationale for choosing Facebook as a potential company for investment; suggests the primary reasons why Facebook stock should be considered by investor and conduct ratio analysis of the company’s financial performance over the past three years. I will further assess the risk level of the company’s stock, stock price analysis; and make recommendations to my client as to why I believe that this stock is an investment opportunity for him. The economic, financial and social impacts of Facebook on people in the 21st Century can never be underestimated. People around the world are engaged daily with one another through sharing of opinions, ideas, advertising products, sharing photos from long distances, making calls etc., etc. With this trend of marketing and communicating with one another, Facebook stands to be one of the lucrative companies that one may invest in. Facebook market analysis reveals that it is the most prominent social networking website in most English speaking countries like the US, Canada and United Kingdom. Facebook competitors are Renren in China, Orkut in Brazil (which finally shut down in Sept 2014), Mixi in Japan, to name a few. Most people doing Facebook industry analysis often compare it with MySpace. But I think it would be an unfair comparison with Facebook 1.65 billion monthly active users as of April 27, 2016 compare to the 50.6 million active users on MySpace as of August 14, 2015 (Craig Smith 2015). Even on the revenue front Facebook is way ahead compared with say MySpace or Twitter. This is why I think Facebook stock would be a suitable investment for my client, Mr. Ben Alfa Ali. 2. Suggest the primary reasons why the selected stock is a suitable investment for your client. Include a description of your client profile. The company business is characterized by innovation, rapid change, and disruptive technology. The company generates substantially all of its revenue from selling advertising placements to marketers. The ads let marketers reach people based on a variety of factors including age, gender, location, interests, and behaviors. For the past three years, the company research and development expenses were $1.82 billion, $2.67 billion, and $1.42 billion in 2015, 2014, and 2013, respectively. This shows that Facebook product development philosophy is centered on continuous innovation in creating and improving products that are social by design, which means that their products are designed to place people and their social and economic interactions at the core of the product experience. My client is Ben Alfa Ali, a multi-millionaire from United Arab Emirate longing to invest in a U.S.-based company. Ben and his family owned multiple businesses in Middle Eastern countries but he has decided to invest some portion of his wealth into US to enable him diversify his investments. Ben believes that with the rising political tensi