Facebook, Inc. (NASDAQ:FB) What if Facebook Buys Disney?
Simple. Facebook buys the Walt Disney Co. (NYSE:DIS). Disney has a market cap of $162 billion, and $55 billion in sales, with just $19 billion in long-term debt. An all-stock bid of, say $200 billion would be hard to resist.
In this case, Disney shareholders get nearly 40% of Facebook stock. Facebook would have to give Disney autonomy, but in theory this would also give Disney the stock market firepower to take out most of 21st Century Fox Inc. (NASDAQ:FOXA). Its current bid is $52.4 billion, all stock.
Initially analysts would love this. But it would establish a maximum value for Facebook’s assets, which is about twice those of Disney and Fox combined.
From there, watch out below.
The Bottom Line on Facebook Stock
Facebook’s stock market value is as an advertising company, but its real value is based on its network of cloud data centers, on which it will spend $14 billion this year.
Facebook needs cash flow to fill those data centers, Disney needs market power to achieve its media aims, and on the surface a deal looks magical.
But it also puts a maximum value on the Facebook network. By extension it puts a maximum value on the networks of the other Cloud Czars as well.
Once the maximum value of cloud assets is realized, watch out below.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 181.56.
The projected upper bound is: 207.26.
The projected lower bound is: 189.30.
The projected closing price is: 198.28.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 80.1821. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 68.25. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 109.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -0.820 at 197.490. Volume was 33% below average (neutral) and Bollinger Bands were 29% narrower than normal.
Open High Low Close Volume___
196.235 197.960 193.790 197.490 19,993,996
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 193.34 180.74 177.39
Volatility: 21 34 33
Volume: 17,488,638 22,634,346 23,392,660
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FACEBOOK INC A is currently 11.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into FB.O (mildly bullish). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 37 periods.
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