Social media company Facebook (FB) recently purchased virtual reality firm Oculus by $2 billion in cash and stock. Oculus is a creator of virtual reality goggles, and several stock analysts are already questioning Facebook’s acquisition.
Market watchers foresee that Facebook stocks could be in for more declines as holders get exasperated about the social media company’s latest purchase. This follows a previous purchase of $19 billion of mobile messaging company WhatsApp.
Facebook shares are currently down by 1.57% on Friday’s close, reflecting a bit of pessimism for the company which is struggling to stay relevant. However other analysts said that more time and confidence is needed in the company, as one of the earlier purchases of Instagram by $1 billion is now proving to be a profitable investment.
Facebook Share Forecast
Given the weak risk appetite in the markets lately though, traders seem more inclined to purchase safe-havens versus higher-yielding ones. With all the doubt on the latest purchase of Facebook, its shares aren’t likely to see huge gains in the near term and might be in for a bit of flat trading prior to the top-tier U.S. economic releases later on this week.
Naysayers predict that virtual reality or VR will take a much longer time to kick in the technology scene, although the case could be made that Facebook is way ahead of the curve. we get Facebook’s logic behind the acquisition, we are taking a wait-and-see approach and are not immediately blessing it,” says an analyst from Topeka Capital.
Facebook Chief Executive Mark Zuckerberg envisions the social media website as a platform for better communication across borders, wherein friends and family could communicate via virtual reality using the goggles from Oculus. Game developers are also enthusiastic about the latest deal, as it could provide a better gaming experience online. The main feature of Oculus goggles is that these do not induce motion sickness or headaches, which has been a usual problem of other VR goggles.
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