Well, everyone’s been talking about the “botched” IPO of Facebook (Facebook Inc. (NASDAQ:FB) this month.
OK, OK, it wasn’t smooth. It certainly wasn’t pretty. And the lawyers are loving it.
They went public. Mark Zuckerberg cashed out. And then the shares tanked when everyone got worried about the ability of the biggest social networking company on the planet to generate revenue off mobile, as everyone is using FB through their phones these days.
But guess what? I think Facebook shares are a bargain at these kind of levels. People are going to looking back and laughing at $32. $26? Crazily low. You want to know why?
Well, everyone is measuring Facebook on the Google ads yardstick. But this is where they are going wrong.
Facebook will be able to squeeze more revenue than it’s current valuation suggests in other ways. And one of the big ones will kick in when casino social games, that are growing like wildfire on the platform, turn on the switch that says “REAL PLAY”. This will be huge, and it’s going to happen within the next 5 years when the US works out how to legalise online gambling. And if you are a lawmaker looking for ways of maximising your tax income from online slots, what could be better than people playing slots within a walled garden like Facebook?
Let’s look at the current wave of slots games propogating their way across Facebook. They are all play for fun versions of course. Turning them in to real play is as simple as flicking a switch. This functionality has been built in to the games and it’s more a question of the legal envirnonment catching up (in the US for example).
Let’s look at High 5 Games. They’ve been working hard to launch a unique casino portal on Facebook so that slots junkies can play their favorite games from anywhere in the world. Players want real games right now, so the company has licensed out its mega slots hit Da Vinci Diamonds to the largest virtual casino on Facebook. And do you know what is the fastest area of growth for slots at the moment? That will be Mobile Slots- playing on your smartphone, iPhone, Android, Samsung Galaxy S III or whatever your latest Communicator is.
Put 2 and 2 together- ie everyone’s using FB on their phones, slots are going mobile, and you don’t get 4, you don’t get 5, you get $13,253,874 and some.
The feedback so far on the High 5 casino portal? Phenomenal. It’s been such a hit that DoubleDown Casino has been having issues due to the massive traffic going into the Da Vinci Diamonds Slot. There’s been over 5 million monthly active users following the slot’s launch.
If you add up all of the 100s of millions that the online casinos make now on slots, and add the Facebook brand into the mix- you’ve got a big earner for shareholders.
Da Vinci Diamonds is the first mega slots brand in H5G’s collection to be made available for play on Facebook. High 5 Games licensed Da Vinci Diamonds to IGT’s DoubleDown Casino so that the social games casino could launch a free-play version on its platform.
Who Are High 5 Games?
High 5 Games is a leading slots game developer, building classic video reel slot machine games such as Golden Goddess, Black Widow, Jaguar Princess, Dangerous Beauty, Cats, Sirens, and Shadow of the Panther.
Who Are IGT?
International Game Technology (IGT) is a global heavyweight in the design, development, and manufacture of slots machines and systems, as well as online and mobile gaming platforms.
For us, this is just one area where Facebook can leverage its huge sticky customer base to generate revenue. Games are a big one (they already are- think Zynga and its Farmville and Poker games. Plus they have just launched slots). They’ll be even bigger when they go real play.
Then you’ve got market research, social science tools, er and we haven’t even mentioned the advertising revenue.
You heard it first here. Facebook shares are a BARGAIN at $32. Come back to this page in a years time on the 22 June 2013, and see how right we were.
