“We can now see that international money is unambiguously flowing in to North America and Latin America, and disproportionately out of APAC,” Wieser writes in the report. “Our guess is that the primary source of the revenue is almost certainly China—or as Twitter called it, ‘the China Export Market,’ a country where neither Facebook nor Twitter nor most other global media owners have users.”
Wieser estimates that ad revenue from China accounts for about 40% of the total ad revenue coming out of APAC, or about $1 billion in the first quarter of 2018. He forecasts Facebook will make $55 billion, overall, in advertising revenue in 2018.
This news, in a way, is positive for Facebook—it suggests the company has a larger global revenue market than shareholders anticipated. But that hasn’t stopped Wieser from recommending a “sell” rating on Facebook’s stock. Wieser believes there are few barriers to entering Facebook’s domain, that Facebook needs increasingly more capital to succeed, and that the government and consumer pushback the company faces for its data privacy practices puts it at risk.
Facebook, as of this writing, is worth more than $500 billion in markets, at $183 a share. But Wieser thinks the company’s stock should be valued at just $138 a share. He’s in poor company. Of 45 analysts tracked by Factset, only Wieser has slapped Facebook with a “sell” rating.