Blogs -Knox Ridley on Why Meta Platforms (FB) Tumbled After Earnings

Knox Ridley on Why Meta Platforms (FB) Tumbled After Earnings

February 15, 2022


Knox Ridley

Portfolio Manager

I/O Fund’s Portfolio Manager Knox Ridley spoke to Nicole Petallides from the TD Ameritrade Network. He rightly predicted that Meta Platforms (Facebook) would be under significant pressure and Snap would be a winner. Here’s an overview of the discussion.

Why did Meta Platforms shares fall?

I/O Fund has followed Facebook’s business model for the past 3-4 years. We had warned our readers that the company’s business depends on Apple. Most people think that Facebook is an ad company with about 2 billion daily active users (DAUs). They monetize that data and do ads which is accurate. However, most people do not realize that the growth that has made them the powerhouse was because of the third-party data from Apple. Our stance is that Apple owns the real estate on iOS, and everyone else is renting.

“The reality is that Apple built the ecosystem and it’s theirs to monetize as they see fit. In this equation, consumers matter too, and data should not have been collected without permission in the first place.”

Apple changed the landscape by altering IDFA, a unique id within your iPhone that allows advertisers to track your behavior. So, Facebook combined this data and their data and sold the most valuable consumer data. We knew that Apple would take away this data and the Wall Street Analysts ignored this critical risk. I/O Fund's research process, which gives importance to the company's technical aspects like the products, is the clear winner in the long term.

Will you buy Meta stock?

The story of Facebook has materially changed. Everyone likes to focus on the financials like the cash flow and the balance sheet. However, to identify the winners in tech investing, you need to understand the product very well.

In the case of Facebook, the product that has helped to get the cash has been changed materially. They have mentioned in their earnings call that the impact of the iOS changes will be around $10 billion. This is a significant chunk of revenue. Few investors are buying the dip due to the Metaverse. We believe that it will take a few years before Metaverse can be effectively monetized and also Facebook’s history of entering new businesses is not that great. So, we will not be buying the dip.

Often, Wall Street Analysts find it difficult to differentiate companies that will outperform as they don’t have the technical knowledge to understand the products. This distinguishes our company from the competitors as we successfully manage a tech-focused portfolio.

Sign up for I/O Fund's free newsletter with gains of up to 1100% - Click here

Will Snap be a winner?

We started to cover Snap on our premium website in July 2019. We noticed the strong app sessions for Snap and the company's plans to monetize the millennials' data that was less known to the broader market, particularly the launch of Audience Networks in 2019. We had also pointed out that Snap is the best platform for Millennials and Gen Z audiences.

We believe that Snap will become one of our bigger positions. What differentiates the company from Facebook is that they don’t monetize third-party data. So they will not be affected much by IDFA. When Facebook got hit, we tried to determine if the problem was with the company or the Ad-Tech industry. We tried to study various earnings reports like Google and Microsoft and then we realized that it was the Facebook problem. The market mispriced Snap. It has an affluent customer base of Millennials and Gen Z that the company can easily monetize in the long term. They also reiterated that the company could grow by 50% year-over-year going forward.

To conclude, Wall Street’s confusion over the tech that runs each company, primarily Facebook and Snap, led to a buying opportunity for I/O Fund members as Portfolio Manager Knox Ridley issued a buy alert on Thursday, February 3rd at $24.95, leading to a 58% gain in one day.

The I/O Fund can make big calls in the face of market confusion for two reasons. The first is our lead tech analyst Beth Kindig’s direct experience in tech unrivaled in the markets. She can confidently make calls the market disagrees with because she understands the tech driving the revenue. Secondly, I/O Fund Portfolio Manager, Knox Ridley, is one of the best portfolio managers in a tech-focused fund, who guides the entry and exits, and previous audits prove this.

The I/O Fund is a team of analysts who share their research publicly as they build a portfolio of 20 stocks. Our team has record results for a retail Fund and we also have four-digit gains on some of our free newsletter coverage. You can learn more about our premium service by clicking here or sign up for our free newsletter here.

Disclaimer: This is not financial advice. Please consult with your financial advisor in regards to any stocks you buy.

Gains of up to 403% from our Free Newsletter.

Here are sample stock gains from the I/O Fund’s newsletter --- produced weekly and all for free!

+344% on Nvidia

+403% on Bitcoin

+218% on Roku

*as of March 15, 2022

Our newsletter provides an edge in the world’s most valuable industry – technology. Due to the enormous gains from this particular industry, we think it’s essential that every stock investor have a credible source who specializes in tech. Subscribe for Free Weekly Analysis on the Best Tech Stocks.

If you are a more serious investor, we have a premium service that offers lower entries and real-time trade alerts. Sample returns on the premium site include 324% on Zoom, 601% on Nvidia, 445% on Bitcoin, and 4-digits on an alt-coin. The I/O Fund is audited annually to prove it’s one of the best performing Funds on the market with returns that beat Wall Street funds. 


More To Explore


Nvidia's Fiscal Q3 Earnings Preview: The Pressure Is On

Nvidia’s Fiscal Q3 Earnings Preview: The Pressure Is On

Nvidia has surged this year with 241% gains YTD, which has more than doubled the returns of the FAANGs. This is no small feat considering it’s widely understood Big Tech is holding up the broader mark

November 27, 2023
Apple Building

Apple’s Services Growth Flywheel Continues To Strengthen

Apple’s Services segment was one of the brightest spots in a relatively in-line earnings report at the beginning of November, topping an $85 billion run rate as growth jumped back to the high double-d

November 21, 2023
Tesla Sells 33% Of Vehicles Below Average Cost, BYD Pulls Ahead

Tesla Sells 33% Of Vehicles Below Average Cost, BYD Pulls Ahead

BYD more than doubled Tesla’s China sales in October as Tesla’s sales slipped on a month-over-month basis, while NEV startups showed strong sales numbers across the board. China’s new energy vehicle (

November 14, 2023
Solar Panels

Solar Stocks Still Searching For A Bottom

Solar is arguably one of the market’s most sold-off industries at the moment, with the Invesco Solar ETF falling more than 42% YTD as the industry struggles to find growth in a high-rate environment.

November 07, 2023
Five Stocks (Not Seven) Can Lead to New Highs

Five Stocks (Not Seven) Can Lead to New Highs

The majority of other sectors are confirming a continuation of the 2022 bear market, meanwhile, a handful of big tech names, with outsized weighting in the major indexes, suggest that they want to go

October 27, 2023
Big Tech Stocks: Q3 Earnings Preview

Big Tech Stocks: Q3 Earnings Preview

Earnings season has officially kicked off, with Big Tech headlining a busy week next week: Microsoft and Google report on Tuesday, followed by Meta on Wednesday, and Amazon on Thursday. Big Tech stock

October 22, 2023
Apple Building

AI Could Be Apple’s Next Chapter

After Nvidia added $750 billion in value this year on the backs of surging AI chip demand, investors are quickly searching for the next trillion-dollar AI winner. AI is the best investment opportunity

October 18, 2023
AI is the Best Investment Opportunity of our Lifetime: Video Interview

AI is the Best Investment Opportunity of our Lifetime: Video Interview

Real Vision invited Beth Kindig back for a candid interview with Raoul Pal for a one-hour discussion on how to position for AI. As discussed in the interview, the reason that AI will be the best inves

October 06, 2023
The Next Market AI Will Disrupt Is Cybersecurity

The Next Market AI Will Disrupt Is Cybersecurity

Cybersecurity is one of the highest costs that enterprises face at 12% of IT budgets on average, and this cost is rapidly rising. While a company can lay off staff or reduce marketing and R&D expenses

October 04, 2023
Nvidia Was Up 235% In 2023, Don't Expect It To Continue

Nvidia Was Up 235% In 2023, Don’t Expect It To Continue

We’ve had unwavering conviction in Nvidia’s AI story since November of 2018. In fact, it was our leading position going into 2023 and our AI allocation of 45% exceeded Stanley Druckenmiller at 29%, me

September 26, 2023

Sign up for Analysis on
the Best Tech Stocks
The I/O Fund specializes in tech growth stocks and offers in-depth research for Premium Members. Investors get access to a transparent portfolio of 30 positions, a private forum, webinars, and real-time trade notifications. Sign up for Premium.

We are on social networks

Copyright © 2010 - 2023
Get Free Weekly Analysis on the Best Tech Stocks