Facebook shares take a hit following Oculus purchase
Investors not excited about social networking site's $2 billion purchase of virtual reality company, but analyst still rates the stock a "BUY."
Wall Street has not responded positively to Facebook's $2 billion acquisition of virtual reality company Oculus VR, maker of the popular--and still unreleased--headset the Oculus Rift.
Facebook shares closed yesterday down a hefty 6.94 percent to $60.38. The market opens today and 9:30 a.m. We'll update this story later in the day if shares bounce back...or fall further.
Mark Zuckerberg says his company's acquisition of Oculus VR is a long-haul effort, one that enable virtual reality to become the most social platform in history over the next ten years. During a conference call Tuesday discussing the surprise deal, Facebook management pointed out that its business model for the tech will drive revenue through software, services, and advertising, not the sale of the hardware itself.
In a note to investors this week, Sterne Agee analyst Arvind Bhatia rated Facebook stock a "BUY."
"We think the rationale is if Facebook can own the pipe, the platform, or the operating system of the future, it will have much greater control over its destiny," Bhatia said.