30. July 2021 | 12:54 CET
Facebook, NSJ Gold Corp, PayPal - Disappointment despite record figures?
Many market exaggerations in the past can be traced back to expected paradigm shifts, which in the end rarely or never materialized. Growth expectations shot into the stratosphere during the dot-com period in anticipation of a completely new age thanks to the Internet and mobile communications. However, the estimates of the impact of the Internet at that time were still complete fantasy. Today, however, the dot-com business models dominate the online world, and the relevance of most platforms can neither be explained away nor is their existence threatened. On the contrary, the so-called FAANG shares have a stock market value of USD 8.5 trillion. We do the math again...
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ISIN: FACEBOOK INC.A DL-_000006 | US30303M1027 , NSJ Gold | CA62973P1071 , PAYPAL HDGS INC.DL-_0001 | US70450Y1038
"[...] The transaction offers benefits to all parties: Shareholders now have three promising projects in their portfolio. [...]" Bradley Rourke, President, CEO and Director, Scottie Resources Corp.
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Facebook - Social Media at its best
All the lights are still green for Facebook. In the past quarter, the social media group benefited massively because advertising spending internationally is increasingly going online. The world's largest online network sales jumped by 56% year-on-year to a good USD 29 billion. At USD 10.4 billion, profits were twice as high as a year ago. The main reason for this growth was a 47% increase in the average price per ad.
The kicker: Facebook's ad slots are now allocated in an auction process. In the Corona pandemic, more and more advertisers are trying to reach their consumers on the web - competition for ad space on the Facebook platform is correspondingly tougher. The number of users active on Facebook every day rose by around 30 million to 1.91 billion within three months. Currently, 2.9 billion users access the platform, 50 million more than in the first quarter of 2021. If those are not good numbers?
Advertising revenues jumped high even though Apple activated its privacy innovations in the middle of last quarter, which Facebook sharply criticizes. It requires app developers to get explicit permission to monitor an iPhone user's behavior across different services and apps for advertising purposes. Since many object to this, Facebook is already warning that ads can no longer be displayed precisely for specific user groups. So far, however, the effect seems to be minor. Because in addition to the revenue from advertising, the number of ads displayed also grew - but only by 6%.
The stock market had probably expected a little more because the price of Facebook shares first lost 4% after the announcement. Nevertheless, the value has only recently overcome the USD 1 trillion mark in capitalization. Facebook is thus one of the ten most valuable companies in the world.
NSJ Gold Corp - Searching for gold in Arizona
Far from the internet world, gold explorer NSJ Gold from Canada is preparing to move its property to a new valuation. To do this, it needs catchy drill results and these are expected to be on track come September.
NSJ Gold Corp. has already begun searching for drill targets for the new drill campaign at its Golden Hills project. Future assays are expected to include fence-like drill holes across the hematite bodies, allowing for a better definition of the gold and copper zones. All results from the previous drill program and geophysical surveys will be used to plan the next phase. Metallurgical testing of the hematite is also planned to determine the extent to which the iron content can be upgraded. An airborne geophysical survey is being conducted in parallel.
NSJ holds an option to acquire a 100% interest in the Golden Project in Arizona, USA, subject to a 3% net smelter returns royalty. The property is located 100 miles west of Arizona Metals' Kay Mine and 80 miles south of Northern Vertex Mining's Moss Mine. The entire property comprises 9.6 square miles and includes 7 patented mining claims and 114 unpatented mining claims.
There is much to suggest success. NSJ's team has extensive experience in financing, exploration, development and mining. Historically, the Walker Lane District has produced 50 million ounces of gold and 400 million ounces of silver. It is the best mining location in Arizona, and the infrastructure is excellent because of the surrounding mining companies.
At the moment, there are only 23.2 million shares at a price of CAD 0.16. As soon as the first results are known, the CAD 3.7 million market valuation days are probably numbered. Get in!
PayPal - Somewhat of a disappointment
The markets expected much more. The payment service provider PayPal has reported revenues of USD 6.24 billion for the second quarter. That corresponds to a plus of 19% compared to the previous year but does not quite meet analysts' expectations, who had expected an average of USD 6.27 billion. The whisper estimate may even have been above USD 6.4 billion. Higher expenses also caused net income to fall 23% to USD 1.18 billion. A surprising quarter in PayPal's boastful streak after all.
However, the platform continues to grow. The number of active accounts increased by another 11.4 million to a total of 403 million accounts. And the volume transacted via PayPal grew by 40% year-on-year to USD 311 billion. Many a bank would be happy if only a fifth of that flowed through its books. Expectations for the future have also been scaled back somewhat. For the third quarter, PayPal expects revenue of between USD 6.15 billion and USD 6.25 billion, down from a current consensus estimate of USD 6.44 billion.
In yesterday's trading, there was then the receipt. The share lost 6.4% to EUR 239 by the afternoon; at the beginning of the week, the value was still around 10% higher at EUR 264.8. In our opinion, the cost side will ease in the coming year and the sales base will continue to rise as usual. After a minor correction, one should, therefore, definitely take a fresh look at the stock.
The shares from the dot-com group presented here will have to adjust to the current number framework in a very volatile manner, as the price highs are considerable. NSJ Gold is more likely to jump up with good drilling results because the current valuation is still 50% cash.