William Bliar Maintains Outperform On Facebook Following The Acquisition Of LiveRail


In a research note issued today, William Blair analyst Ralph Schackart reiterated coverage with a Buy rating on shares of Facebook, Inc. (FB) following last week’s news that Facebook entered an agreement to acquire LiveRail, an advertising technology company that helps publishers serve targeted advertisements within their online video content. No price target was assigned. Schackart commented: “We believe the acquisition of LiveRail will allow Facebook to leverage its valuable user data to enable better targeted video advertisements across the Internet. Moreover, it represents Facebook’s first step in facilitating traditional TV advertising spending. This year, Magna Global forecast TV advertising spending to exceed $200 billion”. The following bullets contain some key points from that report:

  • With the acquisition of LiveRail, Facebook will operate a video ad exchange, connecting publishers with advertisers across the Internet. In our view, Facebook is uniquely positioned to own a video exchange because it can leverage its massive user footprint to more accurately qualify, serve advertisements to, and measure audiences in real-time using traditional TV metrics. This could allow publishers to increase their yields and advertisers to target specific audiences more efficiently.
  • We view the acquisition of LiveRail as another step in Facebook’s strategy to monetize its user data outside the Facebook website and mobile app.
  • Facebook announced the acquisition of LiveRail on July 2, so it should not have an impact on the company’s financials for the second quarter ending June 30. Therefore, we are not making any changes to our model. We will update our model for the acquisition after Facebook reports earnings on July 23 and look forward to more details of the acquisition on the earnings call.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Ralph Schackart currently has an average return of 18.8% and a 76% success rate. Schackart has a 36.7% average return when recommending FB, and is ranked #368 out of 3182 analysts. FB Chart

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