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Two years ago everyone was atwitter over the impending Facebook (NASDAQ:FB) IPO that eventually consummated on 18 May 2012. Given the train wreck of that fiasco, Facebook continued to capture headlines for several months. People who had invested were falling all over themselves trying to ditch the shares they had acquired at the $38.00 asking price as the share price failed to take off, but crashed, as it were, to a low of $17.73 on 4 September. Defying the logic of buying low and selling high, many succumbed to buying at the opening price and HOPING that their fortunes would increase.
When Facebook’s share price wallowed in the muck for 15 months, those who dumped the darling of digital media put on a stiff upper lip by chewing their sour grapes. “Glad I got out whilst the getting was good. Could have been worse, you know. Live and learn.”
I’m told that the wine stains and ash burns on club ties of those who failed to understand the investment idea in their effort to make a quick buck, started showing up last August (2013) when the share price finally took off, never to retreat again. I’ll bet that really did make their ash burn.
We are two months into 2014 and ADVFN has already featured four articles this year about the fortunes of Facebook. Now, here we are publishing another. It’s share price is up 1.89% today to 68.68.
Although not official yet, TechCrunch released what appears to be a reliable report that Facebook is in talks with Titan Aerospace, hoping to bring that company into Czar Zuckerberg’s collection. I’m going to give you the scoop as simply as I can.
- Acquisition price = $60 million
- Acquisition purpose = Connect the remaining 5 billion people in the world to the internet without the infrastructure that has been required heretofore.
- Acquisition plan = Build and launch 11,000 unmanned aerial drones that will, in effect, replace towers and satellites to spread the use of the internet.
The drones are already available. With a 160-foot wingspan and embedded solar panels, the vehicles are able to fly at 65,000 feet, well above regulated airspace, but still suborbital. A built-in battery provides the power to launch, but, once at altitude, the drones can remain in the tropopause (where the winds are perpetually calm and there is nothing to block the sun) for five years using only sunlight as their source of power. They don’t just fall out of the sky after five years. They are retrievable. In fact, they are retrievable at any time, should they encounter problems. Once the problem is fixed or they get their five-year refurbishment, they can be relaunched.
It costs billions to launch communications satellites. These drones cost $1 million per to manufacture and nothing to operate. Titan’s Chief Electrical Engineer, Dustin Sanders, said that “We want something very simple and that doesn’t take up all of your time and energy to keep it running. If all you need is one person to keep an eye on the aircraft, that completely changes things. We’re trying to change the mindset on how aircraft should operate.”
Cleverly, the execs at Titan – and you can expect the same from the execs at Facebook – are avoiding the implications of using the word “drone.” Instead, they are referring euphemistically to the aircraft as “atmospheric satellites.” If it’s a drone it must be there for nefarious reasons, but not if it’s an atmospheric satellite. On the other hand, if it looks like a duck, walks like a duck, and it quacks like a duck . . . a rose by any other name is still a rose.”
Back to investing. We may not be completely aware of what Facebook is really up to. The same applies to Google. Whatever it is, its share price is up to almost double its IPO price and almost four times a much as it was in September 2012. Which way do you think it’s going to go now?
