Facebook CEO Mark Zuckerberg delivers his keynote address at Facebook Inc.'s annual F8 Developer Conference in San Jose, California, USA, on April 30, 2019.
Stephen Lam | Reuters
Wall Street analysts are eagerly waiting for Facebook to unveil Tuesday its long-awaited plan for cryptocurrency payments. According to various reports, the company is preparing to finally reveal what it calls Project Libra, with partners such as Visa and Mastercard.
Facebook is the best-performing stock of the so-called "FAANG" shares this year and has recorded an increase of more than 40% since the beginning of the year. "FAANG" refers to a group of technology and Internet stocks including Facebook, Amazon, Apple, Netflix and Google.
The social media giant has also been under tremendous pressure from government regulators due to various privacy issues and most analysts believe the cryptography project could give society a big boost to more 39, a title.
"We think this could prove to be one of the most important initiatives in the company's history aimed at unleashing new sources of commitment and revenue," Mark said. Mahaney, RBC analyst.
Other analysts have agreed.
"We believe that it is a major initiative for Facebook, which could potentially put the company at the forefront in other areas than advertising, including trade and services. and significantly expand its market potential and growth prospects, "said SunTrust analysts. . "This reduces the risks of controls and opposition from regulators for antitrust reasons (especially in the current environment), given the approach of the Facebook consortium and the the diversity of partners. "
According to analysts MoffettNathanson, Facebook is not only trying to play a role in social media.
"Facebook also aims to become the world's first e-commerce platform," they said.
Here's what analysts say about launching Facebook Cryptography:
SunTrust Evaluation- Buy
"We believe that it is a major initiative for Facebook, which could potentially place the company at the center of concerns beyond advertising, including trade and financial services, extending its growth potential, one of the key players at the heart of the development of cryptocurrency and one of the main architects of the future of this important and emerging trend, and if cryptocurrencies have existed for several years, no other company could not bring the combination of size support and balance sheet, what Facebook can in our opinion … This reduces the potential for regulatory control and opposition for antitrust reasons (especially in the current environment), given Facebook's approach as a consortium and the varied nature of the partners. "
MoffettNathanson- Buy Note
"We believe that a payment system based on Facebook's cryptocurrency could be particularly useful in countries with high inflation / unstable banking systems and for remittances from a country to the world. Thus, Facebook's commercial ambitions do not seem to be limited to developed markets, and their eyes are set to become the world's first e-commerce platform. "
RBC – Outperform
"We believe this could be one of the most important initiatives in the company's history to unlock new sources of commitment and revenue, and we plan to provide an analysis of the white paper to help investors to analyze the cryptoeconomy underlying the token. We believe that Facebook will use cryptography to create a platform for: 1) payments, 2) commerce and 3) apps and games. And we believe that this strategy is a multi-step process, which begins with a greater user engagement monetizing each new step, a similar strategy that has worked well for Facebook's core advertising industry. "
Bank of America – Call Number
"With more than 2.5 billion users, Facebook and its partners could represent a significant endorsement of cryptocurrency and a notable addition to the Facebook application ecosystem. questions remain on the ease of use and potential adoption, because there are very viable online payment alternatives, the consortium will probably get significant visibility / press and could be a medium-term catalyst for e-commerce activity on Facebook. We view this launch as an important initiative for the company as it creates a more private messaging ecosystem with e-commerce capabilities. "