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Newbie101
2021-06-28
Hu
How Facebook Is Quietly Preparing to Dominate Virtual Reality
Newbie101
2021-06-28
Wow
抱歉，原内容已删除
Newbie101
2021-06-28
Wow
抱歉，原内容已删除
Newbie101
2021-02-17
Yep
Index funds don’t buy IPOs but here’s why they should
去老虎APP查看更多动态
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What does Zuckerberg know that we don't?","content":"<p>According to The Verge, nearly 20% of <b><a href=\"https://laohu8.com/S/FB\">Facebook</a></b>'s (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios for years, most recently BigBox VR (creator of <i>Population: One</i>, the <i>Fortnite</i> of VR) and Unit 2 Games (creator of Craya, a <b>Roblox</b>-esque VR gaming platform), for undisclosed sums.</p>\n<p>These continuous investments in talent and studio acquisitions may seem steep for a business segment that accounts for less than 3% of Facebook's top line. But Mark Zuckerberg's ambitious vision for VR is powering a shopping spree that likely won't stop anytime soon. Is Facebook ahead of the game, or will its Oculus VR venture fail to move the needle?</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f686cdff7303434853836ea6ee34a8f6\" tg-width=\"700\" tg-height=\"438\"><span>Image source: Getty Images.</span></p>\n<h2>The future of VR gaming</h2>\n<p>Zuckerberg has been talking up VR more than usual lately, partly thanks to accelerated adoption of the Oculus Quest 2 VR headset (according to Facebook -- but the company does not explicitly report figures for sold VR hardware). The CEO's first major talking point in Facebook's latest earnings report was VR and AR, predicting \"augmented and virtual reality to unlock a massive amount of value, both in people's lives and the economy overall.\"</p>\n<p>His excitement about the technology is not unwarranted -- Fortune Business Insights forecasts that the global market for VR gaming will reach $45.2 billion by 2027 (from $5.1 billion in 2019). This translates to a compounded annual growth rate (CAGR) of 31.8%, compared to a CAGR of only 5.3% for the overall gaming console market over the same forecast period.</p>\n<h2>How Facebook got ahead</h2>\n<p>Facebook's strategy for VR gaming domination starts with laying a solid foundation of technology and developer talent. In classic Facebook fashion, its primary tactic has been acquiring existing VR hardware and software companies.</p>\n<p>Since acquiring Oculus VR for $2 billion in 2014, the company has made significant progress in improving its VR hardware to better suit customers' needs. The current Oculus Quest 2 is a stand-alone headset (i.e., no wires to trip on or tangle up while playing) and requires no external device (such as a console or PC). Conversely, <b>Sony</b>'s (NYSE:SONY) wired PlayStation VR headset requires a PlayStation console. The Quest 2's wireless, low-hardware conveniences combined with its lower price point relative to any other major headset on the market give Facebook a competitive edge when it comes to hardware.</p>\n<p>But even the best VR headset is useless without great games, making Facebook's VR studio acquisitions crucial to building up its VR ecosystem. By acquiring small yet high-performing studios, Facebook is securing revenue from already-popular VR games on Oculus and retaining top software developers to create exclusive content within the Oculus platform. Considering the company's standard four-year stock option vesting schedule, it's unlikely that developers from studios like BigBox or Unit 2 will jump ship to work for a competitor anytime soon.</p>\n<h2>Why it'll stay ahead</h2>\n<p>If you know Facebook's business model, you're probably wondering when ads come into play. The company has announced that it will begin testing ads in select games on the Oculus platform, but it's still up in the air what exactly the ad experience will look like once testing begins -- and how VR gamers will react.</p>\n<p>If the company can manage to integrate ads without breaking the immersive gaming experience, it will help developers earn more revenue (thus, attracting more developers to the Oculus platform) and could even make games more realistic. For example, real ads appearing on in-game TV screens and billboards would not break players' immersion in their gaming world, while still driving revenue for developers and Facebook.</p>\n<p>Beyond attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well -- its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.</p>\n<p>For example, it would be much easier for a friend to influence you to purchase a $300 all-in-<a href=\"https://laohu8.com/S/AONE\">one</a> VR headset than a PlayStation console <i>and</i> headset, which would total more than twice the cost of the Quest 2. Don't get me wrong -- Sony is a leading competitor in the VR gaming space and has shipped the most VR hardware units to date, but the company's network effects are arguably limited to existing PlayStation owners (about 15.7 million monthly active users, between the PS4 and the PS5).</p>\n<p>Facebook's 2.8 billion monthly active users have much more potential to add value to the Oculus platform by sheer volume of players, especially when it comes to popular social VR games like <i>Population: One</i>, <i>Craya</i>, and <i>Beat Saber Multiplayer</i> (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players.</p>\n<p>While some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player), Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players, Facebook is set up for success in rapidly gaining market share in VR gaming.</p>\n<h2>What to watch for</h2>\n<p>While Facebook's VR gaming revenue isn't reported explicitly (yet), the company's \"other revenue\" business segment is primarily Oculus. In Facebook's first-quarter 2021 earnings report, this segment grew 146% year over year to $732 million, implying an impressive growth rate for the company's VR business. Further, the Quest 2 has become the most used VR headset on popular gaming platform Steam, and by many estimates the Quest 2 is selling at least twice as fast as PlayStation VR, despite lagging behind in current overall market share.</p>\n<p>Keep an eye on this \"other revenue\" segment in future earnings reports, as well as any hard figures reported by the company on VR gaming revenue. More cautious investors may also want to wait for Facebook to complete its in-game ad testing process before investing based on the company's growth potential in VR. It is undoubtedly a risk to user growth if ad content is not executed smoothly.</p>\n<p>It's impossible to dive into every point in Facebook's value and growth story in <a href=\"https://laohu8.com/S/AONE.U\">one</a> sitting, but the stock seems fairly valued given its growth potential -- FB is even rated \"undervalued\" by Morningstar. The company's wide economic moat in social gaming is unmatched thanks to a massive user base and vast user data, and these competitive advantages can easily translate to driving profits and market share for its VR gaming business.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Facebook Is Quietly Preparing to Dominate Virtual Reality</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Facebook Is Quietly Preparing to Dominate Virtual Reality\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-28 19:45 GMT+8 <a href=https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>According to The Verge, nearly 20% of Facebook's (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146339002","content_text":"According to The Verge, nearly 20% of Facebook's (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios for years, most recently BigBox VR (creator of Population: One, the Fortnite of VR) and Unit 2 Games (creator of Craya, a Roblox-esque VR gaming platform), for undisclosed sums.\nThese continuous investments in talent and studio acquisitions may seem steep for a business segment that accounts for less than 3% of Facebook's top line. But Mark Zuckerberg's ambitious vision for VR is powering a shopping spree that likely won't stop anytime soon. Is Facebook ahead of the game, or will its Oculus VR venture fail to move the needle?\nImage source: Getty Images.\nThe future of VR gaming\nZuckerberg has been talking up VR more than usual lately, partly thanks to accelerated adoption of the Oculus Quest 2 VR headset (according to Facebook -- but the company does not explicitly report figures for sold VR hardware). The CEO's first major talking point in Facebook's latest earnings report was VR and AR, predicting \"augmented and virtual reality to unlock a massive amount of value, both in people's lives and the economy overall.\"\nHis excitement about the technology is not unwarranted -- Fortune Business Insights forecasts that the global market for VR gaming will reach $45.2 billion by 2027 (from $5.1 billion in 2019). This translates to a compounded annual growth rate (CAGR) of 31.8%, compared to a CAGR of only 5.3% for the overall gaming console market over the same forecast period.\nHow Facebook got ahead\nFacebook's strategy for VR gaming domination starts with laying a solid foundation of technology and developer talent. In classic Facebook fashion, its primary tactic has been acquiring existing VR hardware and software companies.\nSince acquiring Oculus VR for $2 billion in 2014, the company has made significant progress in improving its VR hardware to better suit customers' needs. The current Oculus Quest 2 is a stand-alone headset (i.e., no wires to trip on or tangle up while playing) and requires no external device (such as a console or PC). Conversely, Sony's (NYSE:SONY) wired PlayStation VR headset requires a PlayStation console. The Quest 2's wireless, low-hardware conveniences combined with its lower price point relative to any other major headset on the market give Facebook a competitive edge when it comes to hardware.\nBut even the best VR headset is useless without great games, making Facebook's VR studio acquisitions crucial to building up its VR ecosystem. By acquiring small yet high-performing studios, Facebook is securing revenue from already-popular VR games on Oculus and retaining top software developers to create exclusive content within the Oculus platform. Considering the company's standard four-year stock option vesting schedule, it's unlikely that developers from studios like BigBox or Unit 2 will jump ship to work for a competitor anytime soon.\nWhy it'll stay ahead\nIf you know Facebook's business model, you're probably wondering when ads come into play. The company has announced that it will begin testing ads in select games on the Oculus platform, but it's still up in the air what exactly the ad experience will look like once testing begins -- and how VR gamers will react.\nIf the company can manage to integrate ads without breaking the immersive gaming experience, it will help developers earn more revenue (thus, attracting more developers to the Oculus platform) and could even make games more realistic. For example, real ads appearing on in-game TV screens and billboards would not break players' immersion in their gaming world, while still driving revenue for developers and Facebook.\nBeyond attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well -- its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.\nFor example, it would be much easier for a friend to influence you to purchase a $300 all-in-one VR headset than a PlayStation console and headset, which would total more than twice the cost of the Quest 2. Don't get me wrong -- Sony is a leading competitor in the VR gaming space and has shipped the most VR hardware units to date, but the company's network effects are arguably limited to existing PlayStation owners (about 15.7 million monthly active users, between the PS4 and the PS5).\nFacebook's 2.8 billion monthly active users have much more potential to add value to the Oculus platform by sheer volume of players, especially when it comes to popular social VR games like Population: One, Craya, and Beat Saber Multiplayer (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players.\nWhile some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player), Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players, Facebook is set up for success in rapidly gaining market share in VR gaming.\nWhat to watch for\nWhile Facebook's VR gaming revenue isn't reported explicitly (yet), the company's \"other revenue\" business segment is primarily Oculus. In Facebook's first-quarter 2021 earnings report, this segment grew 146% year over year to $732 million, implying an impressive growth rate for the company's VR business. Further, the Quest 2 has become the most used VR headset on popular gaming platform Steam, and by many estimates the Quest 2 is selling at least twice as fast as PlayStation VR, despite lagging behind in current overall market share.\nKeep an eye on this \"other revenue\" segment in future earnings reports, as well as any hard figures reported by the company on VR gaming revenue. More cautious investors may also want to wait for Facebook to complete its in-game ad testing process before investing based on the company's growth potential in VR. It is undoubtedly a risk to user growth if ad content is not executed smoothly.\nIt's impossible to dive into every point in Facebook's value and growth story in one sitting, but the stock seems fairly valued given its growth potential -- FB is even rated \"undervalued\" by Morningstar. The company's wide economic moat in social gaming is unmatched thanks to a massive user base and vast user data, and these competitive advantages can easily translate to driving profits and market share for its VR gaming business.","news_type":1},"isVote":1,"tweetType":1,"viewCount":329,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150957459,"gmtCreate":1624884278671,"gmtModify":1631889320601,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3573474794824934","idStr":"3573474794824934"},"themes":[],"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/150957459","repostId":"2146763002","repostType":4,"isVote":1,"tweetType":1,"viewCount":132,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150957296,"gmtCreate":1624884260115,"gmtModify":1631889320604,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3573474794824934","idStr":"3573474794824934"},"themes":[],"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/150957296","repostId":"2146763002","repostType":4,"isVote":1,"tweetType":1,"viewCount":152,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":385468237,"gmtCreate":1613572676429,"gmtModify":1631889320606,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3573474794824934","idStr":"3573474794824934"},"themes":[],"htmlText":"Yep","listText":"Yep","text":"Yep","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/385468237","repostId":"1195476575","repostType":4,"repost":{"id":"1195476575","kind":"news","pubTimestamp":1613555269,"share":"https://www.laohu8.com/m/news/1195476575?lang=&edition=full","pubTime":"2021-02-17 17:47","market":"us","language":"en","title":"Index funds don’t buy IPOs but here’s why they should","url":"https://stock-news.laohu8.com/highlight/detail?id=1195476575","media":"MarketWatch","summary":"How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S.","content":"<p>How indexed mutual funds and ETFs can capture the powerful gains when a company goes public</p>\n<p>The U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose acquisition vehicles, U.S. IPOs last year raised $83 billion in gross proceeds. The prices of these IPOs jumped during the initial day of trading by 36% on average.</p>\n<p>Despite these high returns, index funds — including mutual funds and exchange-traded funds — almost never bought IPOs at their initial offering price. Instead, index funds waited to buy IPO stocks until near the date on which they were added to the relevant index — typically at the end of a quarter within six months to a year after the IPO.</p>\n<p>Yet as the index inclusion date nears for any IPO, its price typically surges in anticipation of a barrage of purchases — driving up the price that index funds must pay for that stock. For example, the price of Tesla spiked once it became likely that the company would be added to the S&P500.</p>\n<p>In this article, I outline the data from 2010 to 2018 about the high initial returns for IPOs as well as the concerns holding back index funds from buying IPOs before they are included in the index. Then, I make a path-breaking proposal — allowing any index fund that tracks the Russell 1000 Index to meet these concerns by early buying of IPOs if, and only if, they are large relative to the size of the index.</p>\n<p>Like many other studies,the study that I co-authored with two experts on indexing found high returns in IPO stock prices during the initial day of trading. After this initial day of trading, the study evaluated IPO returns by a measure known as the index-adjusted performance (IAP) — the difference between the total return of the security and the total return of the index from the closing price on the first day of trading to the closing price of any following day. For example, a positive IAP would signal that an IPO has outperformed the index from the close of the first day of trading until the date the IPO is included in the relevant index.</p>\n<p>The study calculated these two metrics of returns for all 932 U.S. IPOs offered in the nine years between January 2010 and December 2018. Of these 932 IPOs, 115 were included in the Russell 1000 within the first six months of trading.</p>\n<p>The study used the Russell 1000 because it includes 92% of the total market capitalization of all listed stocks in the U.S. equity market. The Russell 1000 contains the top 1000 publicly traded U.S. companies according to market capitalization. IPOs are considered for inclusion at the end of each quarter, strictly based on their market capitalization.</p>\n<p>The first-day return for these 115 IPOs was highly positive — 22% on average with a median gain of 10%. Similarly, looking at the IAP for these 115 IPOs included in the Russell 1000, the study found a positive trend — with an average IAP of 6.89% and median of 5.24% between the IPO and the index inclusion date.</p>\n<p>Both of these trends show that index funds could generate excess return by buying IPOs before they are added to the index. The greatest return could be realized by buying IPOs at the initial offering price and holding them through the index inclusion date. Index funds could also realize significant excess returns by buying IPOs after their first day of trading and holding them through the index inclusion date.</p>\n<p><b>Risks in the returns</b></p>\n<p>Index funds would face several risks associated with such early purchases of IPOs.</p>\n<p>First, and most importantly, no one knows which IPOs will be added to the index at the time of the IPO. An index fund might purchase an IPO stock that doesn’t get added to the index. In that event, the fund would have to sell the IPO stock, potentially at a loss. The price of the IPO stock would decline because there would no longer be the expectation that other index funds would be required to buy that stock when it is added to the index.</p>\n<p>A second concern is that an index fund would not get a large enough allocation in an IPO to reflect the stock’s future position in the index — for example, when a popular tech company goes public. Even so, an index fund can still generate excess returns by buying more of such a stock on the day following an IPO and holding that stock until it is added to the index.</p>\n<p>Third, since the index fund would be holding stocks that are not included in the index — at least for several months — the fund would experience tracking error. Tracking error occurs when the returns on an index fund portfolio differ materially from those of the index it is benchmarked against. But investors would probably not be overly concerned if the fund beat the index it was designed to track.</p>\n<p>Of course, the prospectus of such an index fund would have to make clear that it would be buying stocks in the initial offerings of IPOs and after their first day of trading. The prospectus should also delineate the risks involved when the fund buys IPOs before they are included in the index.</p>\n<p>To mitigate the most important risk — that the IPO will not be included in the index — I recommend that index funds should purchase an IPO only if its expected weight in the Russell 1000 is relatively large. The expected weight equals the gross proceeds raised by the IPO, divided by the total freely traded float of stocks in the index. Since the Russell 1000 Index is composed of the top 1000 U.S. companies by market capitalization, the larger the IPO is relative to the index, the more likely that the IPO will be added to that index.</p>\n<p>This strategy could be adapted to varying risk tolerances of index funds by adjusting the size threshold for early purchases of an IPO. In a conservative strategy, the index fund would purchase only IPOs with the largest expected weight in the index, since they are most likely to be included in the index. In a more aggressive strategy, by contrast, the size threshold for buying IPOs would be lower.</p>\n<p>The study examined three thresholds for risk appetite, defined in terms of the expected weight of the IPO in the index: 1.0 basis point for conservative; 0.75 basis point for pragmatic and 0.50 basis point for aggressive. (One basis point equals 1/100 of 1%)</p>\n<p>The results, summarized in the table below, show that this strategy would have been successful at generating excess returns without significant risks during the period from 2010 through 2018.</p>\n<p>For example, 100% of the largest IPOs that would have been purchased under the conservative strategy during this period were added to the index within the first six months and generated excess returns above 15%. Under the aggressive strategy, 88% of the IPOs that would have been purchased during this period were included in the index within six months and generated excess returns of close to 17%.</p>\n<p><img src=\"https://static.tigerbbs.com/0fc52461985f7a3ca10fac53ba2ccf05\" tg-width=\"1260\" tg-height=\"476\"></p>\n<p>My recommendation is that an index fund based on the Russell 1000 buy relatively large IPOs in their initial offerings or, if necessary, immediately after their first day of trading. Although there is a modest risk that such IPOs will not subsequently be included in that index, the excess returns from this strategy outweigh the risks.</p>\n<p>I would not recommend that any index fund use this strategy to buy an IPO effected by merging a private company with a special acquisition vehicle. I also would not recommend this strategy for any index fund based on other indices where it is more difficult to predict when and whether IPO stocks will be included in the index, such as the S&P 500, where stocks included are chosen by a committee.</p>","source":"market_watch","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Index funds don’t buy IPOs but here’s why they should</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIndex funds don’t buy IPOs but here’s why they should\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-02-17 17:47 GMT+8 <a href=https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose ...</p>\n\n<a href=\"https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/599a65733b8245fcf7868668ef9ad712","article_id":"1195476575","content_text":"How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose acquisition vehicles, U.S. IPOs last year raised $83 billion in gross proceeds. The prices of these IPOs jumped during the initial day of trading by 36% on average.\nDespite these high returns, index funds — including mutual funds and exchange-traded funds — almost never bought IPOs at their initial offering price. Instead, index funds waited to buy IPO stocks until near the date on which they were added to the relevant index — typically at the end of a quarter within six months to a year after the IPO.\nYet as the index inclusion date nears for any IPO, its price typically surges in anticipation of a barrage of purchases — driving up the price that index funds must pay for that stock. For example, the price of Tesla spiked once it became likely that the company would be added to the S&P500.\nIn this article, I outline the data from 2010 to 2018 about the high initial returns for IPOs as well as the concerns holding back index funds from buying IPOs before they are included in the index. Then, I make a path-breaking proposal — allowing any index fund that tracks the Russell 1000 Index to meet these concerns by early buying of IPOs if, and only if, they are large relative to the size of the index.\nLike many other studies,the study that I co-authored with two experts on indexing found high returns in IPO stock prices during the initial day of trading. After this initial day of trading, the study evaluated IPO returns by a measure known as the index-adjusted performance (IAP) — the difference between the total return of the security and the total return of the index from the closing price on the first day of trading to the closing price of any following day. For example, a positive IAP would signal that an IPO has outperformed the index from the close of the first day of trading until the date the IPO is included in the relevant index.\nThe study calculated these two metrics of returns for all 932 U.S. IPOs offered in the nine years between January 2010 and December 2018. Of these 932 IPOs, 115 were included in the Russell 1000 within the first six months of trading.\nThe study used the Russell 1000 because it includes 92% of the total market capitalization of all listed stocks in the U.S. equity market. The Russell 1000 contains the top 1000 publicly traded U.S. companies according to market capitalization. IPOs are considered for inclusion at the end of each quarter, strictly based on their market capitalization.\nThe first-day return for these 115 IPOs was highly positive — 22% on average with a median gain of 10%. Similarly, looking at the IAP for these 115 IPOs included in the Russell 1000, the study found a positive trend — with an average IAP of 6.89% and median of 5.24% between the IPO and the index inclusion date.\nBoth of these trends show that index funds could generate excess return by buying IPOs before they are added to the index. The greatest return could be realized by buying IPOs at the initial offering price and holding them through the index inclusion date. Index funds could also realize significant excess returns by buying IPOs after their first day of trading and holding them through the index inclusion date.\nRisks in the returns\nIndex funds would face several risks associated with such early purchases of IPOs.\nFirst, and most importantly, no one knows which IPOs will be added to the index at the time of the IPO. An index fund might purchase an IPO stock that doesn’t get added to the index. In that event, the fund would have to sell the IPO stock, potentially at a loss. The price of the IPO stock would decline because there would no longer be the expectation that other index funds would be required to buy that stock when it is added to the index.\nA second concern is that an index fund would not get a large enough allocation in an IPO to reflect the stock’s future position in the index — for example, when a popular tech company goes public. Even so, an index fund can still generate excess returns by buying more of such a stock on the day following an IPO and holding that stock until it is added to the index.\nThird, since the index fund would be holding stocks that are not included in the index — at least for several months — the fund would experience tracking error. Tracking error occurs when the returns on an index fund portfolio differ materially from those of the index it is benchmarked against. But investors would probably not be overly concerned if the fund beat the index it was designed to track.\nOf course, the prospectus of such an index fund would have to make clear that it would be buying stocks in the initial offerings of IPOs and after their first day of trading. The prospectus should also delineate the risks involved when the fund buys IPOs before they are included in the index.\nTo mitigate the most important risk — that the IPO will not be included in the index — I recommend that index funds should purchase an IPO only if its expected weight in the Russell 1000 is relatively large. The expected weight equals the gross proceeds raised by the IPO, divided by the total freely traded float of stocks in the index. Since the Russell 1000 Index is composed of the top 1000 U.S. companies by market capitalization, the larger the IPO is relative to the index, the more likely that the IPO will be added to that index.\nThis strategy could be adapted to varying risk tolerances of index funds by adjusting the size threshold for early purchases of an IPO. In a conservative strategy, the index fund would purchase only IPOs with the largest expected weight in the index, since they are most likely to be included in the index. In a more aggressive strategy, by contrast, the size threshold for buying IPOs would be lower.\nThe study examined three thresholds for risk appetite, defined in terms of the expected weight of the IPO in the index: 1.0 basis point for conservative; 0.75 basis point for pragmatic and 0.50 basis point for aggressive. (One basis point equals 1/100 of 1%)\nThe results, summarized in the table below, show that this strategy would have been successful at generating excess returns without significant risks during the period from 2010 through 2018.\nFor example, 100% of the largest IPOs that would have been purchased under the conservative strategy during this period were added to the index within the first six months and generated excess returns above 15%. Under the aggressive strategy, 88% of the IPOs that would have been purchased during this period were included in the index within six months and generated excess returns of close to 17%.\n\nMy recommendation is that an index fund based on the Russell 1000 buy relatively large IPOs in their initial offerings or, if necessary, immediately after their first day of trading. Although there is a modest risk that such IPOs will not subsequently be included in that index, the excess returns from this strategy outweigh the risks.\nI would not recommend that any index fund use this strategy to buy an IPO effected by merging a private company with a special acquisition vehicle. I also would not recommend this strategy for any index fund based on other indices where it is more difficult to predict when and whether IPO stocks will be included in the index, such as the S&P 500, where stocks included are chosen by a committee.","news_type":1},"isVote":1,"tweetType":1,"viewCount":170,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":150957459,"gmtCreate":1624884278671,"gmtModify":1631889320601,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3573474794824934","authorIdStr":"3573474794824934"},"themes":[],"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/150957459","repostId":"2146763002","repostType":4,"isVote":1,"tweetType":1,"viewCount":132,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150957296,"gmtCreate":1624884260115,"gmtModify":1631889320604,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3573474794824934","authorIdStr":"3573474794824934"},"themes":[],"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/150957296","repostId":"2146763002","repostType":4,"isVote":1,"tweetType":1,"viewCount":152,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150309782,"gmtCreate":1624885691846,"gmtModify":1631889320598,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3573474794824934","authorIdStr":"3573474794824934"},"themes":[],"htmlText":"Hu","listText":"Hu","text":"Hu","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/150309782","repostId":"2146339002","repostType":4,"repost":{"id":"2146339002","kind":"highlight","pubTimestamp":1624880751,"share":"https://www.laohu8.com/m/news/2146339002?lang=&edition=full","pubTime":"2021-06-28 19:45","market":"us","language":"en","title":"How Facebook Is Quietly Preparing to Dominate Virtual Reality","url":"https://stock-news.laohu8.com/highlight/detail?id=2146339002","media":"Motley Fool","summary":"VR gaming accounts for less than 1% of the gaming market, but Facebook is going all in. What does Zuckerberg know that we don't?","content":"<p>According to The Verge, nearly 20% of <b><a href=\"https://laohu8.com/S/FB\">Facebook</a></b>'s (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios for years, most recently BigBox VR (creator of <i>Population: One</i>, the <i>Fortnite</i> of VR) and Unit 2 Games (creator of Craya, a <b>Roblox</b>-esque VR gaming platform), for undisclosed sums.</p>\n<p>These continuous investments in talent and studio acquisitions may seem steep for a business segment that accounts for less than 3% of Facebook's top line. But Mark Zuckerberg's ambitious vision for VR is powering a shopping spree that likely won't stop anytime soon. Is Facebook ahead of the game, or will its Oculus VR venture fail to move the needle?</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f686cdff7303434853836ea6ee34a8f6\" tg-width=\"700\" tg-height=\"438\"><span>Image source: Getty Images.</span></p>\n<h2>The future of VR gaming</h2>\n<p>Zuckerberg has been talking up VR more than usual lately, partly thanks to accelerated adoption of the Oculus Quest 2 VR headset (according to Facebook -- but the company does not explicitly report figures for sold VR hardware). The CEO's first major talking point in Facebook's latest earnings report was VR and AR, predicting \"augmented and virtual reality to unlock a massive amount of value, both in people's lives and the economy overall.\"</p>\n<p>His excitement about the technology is not unwarranted -- Fortune Business Insights forecasts that the global market for VR gaming will reach $45.2 billion by 2027 (from $5.1 billion in 2019). This translates to a compounded annual growth rate (CAGR) of 31.8%, compared to a CAGR of only 5.3% for the overall gaming console market over the same forecast period.</p>\n<h2>How Facebook got ahead</h2>\n<p>Facebook's strategy for VR gaming domination starts with laying a solid foundation of technology and developer talent. In classic Facebook fashion, its primary tactic has been acquiring existing VR hardware and software companies.</p>\n<p>Since acquiring Oculus VR for $2 billion in 2014, the company has made significant progress in improving its VR hardware to better suit customers' needs. The current Oculus Quest 2 is a stand-alone headset (i.e., no wires to trip on or tangle up while playing) and requires no external device (such as a console or PC). Conversely, <b>Sony</b>'s (NYSE:SONY) wired PlayStation VR headset requires a PlayStation console. The Quest 2's wireless, low-hardware conveniences combined with its lower price point relative to any other major headset on the market give Facebook a competitive edge when it comes to hardware.</p>\n<p>But even the best VR headset is useless without great games, making Facebook's VR studio acquisitions crucial to building up its VR ecosystem. By acquiring small yet high-performing studios, Facebook is securing revenue from already-popular VR games on Oculus and retaining top software developers to create exclusive content within the Oculus platform. Considering the company's standard four-year stock option vesting schedule, it's unlikely that developers from studios like BigBox or Unit 2 will jump ship to work for a competitor anytime soon.</p>\n<h2>Why it'll stay ahead</h2>\n<p>If you know Facebook's business model, you're probably wondering when ads come into play. The company has announced that it will begin testing ads in select games on the Oculus platform, but it's still up in the air what exactly the ad experience will look like once testing begins -- and how VR gamers will react.</p>\n<p>If the company can manage to integrate ads without breaking the immersive gaming experience, it will help developers earn more revenue (thus, attracting more developers to the Oculus platform) and could even make games more realistic. For example, real ads appearing on in-game TV screens and billboards would not break players' immersion in their gaming world, while still driving revenue for developers and Facebook.</p>\n<p>Beyond attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well -- its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.</p>\n<p>For example, it would be much easier for a friend to influence you to purchase a $300 all-in-<a href=\"https://laohu8.com/S/AONE\">one</a> VR headset than a PlayStation console <i>and</i> headset, which would total more than twice the cost of the Quest 2. Don't get me wrong -- Sony is a leading competitor in the VR gaming space and has shipped the most VR hardware units to date, but the company's network effects are arguably limited to existing PlayStation owners (about 15.7 million monthly active users, between the PS4 and the PS5).</p>\n<p>Facebook's 2.8 billion monthly active users have much more potential to add value to the Oculus platform by sheer volume of players, especially when it comes to popular social VR games like <i>Population: One</i>, <i>Craya</i>, and <i>Beat Saber Multiplayer</i> (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players.</p>\n<p>While some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player), Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players, Facebook is set up for success in rapidly gaining market share in VR gaming.</p>\n<h2>What to watch for</h2>\n<p>While Facebook's VR gaming revenue isn't reported explicitly (yet), the company's \"other revenue\" business segment is primarily Oculus. In Facebook's first-quarter 2021 earnings report, this segment grew 146% year over year to $732 million, implying an impressive growth rate for the company's VR business. Further, the Quest 2 has become the most used VR headset on popular gaming platform Steam, and by many estimates the Quest 2 is selling at least twice as fast as PlayStation VR, despite lagging behind in current overall market share.</p>\n<p>Keep an eye on this \"other revenue\" segment in future earnings reports, as well as any hard figures reported by the company on VR gaming revenue. More cautious investors may also want to wait for Facebook to complete its in-game ad testing process before investing based on the company's growth potential in VR. It is undoubtedly a risk to user growth if ad content is not executed smoothly.</p>\n<p>It's impossible to dive into every point in Facebook's value and growth story in <a href=\"https://laohu8.com/S/AONE.U\">one</a> sitting, but the stock seems fairly valued given its growth potential -- FB is even rated \"undervalued\" by Morningstar. The company's wide economic moat in social gaming is unmatched thanks to a massive user base and vast user data, and these competitive advantages can easily translate to driving profits and market share for its VR gaming business.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Facebook Is Quietly Preparing to Dominate Virtual Reality</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Facebook Is Quietly Preparing to Dominate Virtual Reality\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-28 19:45 GMT+8 <a href=https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>According to The Verge, nearly 20% of Facebook's (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2021/06/27/how-facebook-is-quietly-preparing-to-dominate-virt/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146339002","content_text":"According to The Verge, nearly 20% of Facebook's (NASDAQ:FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios for years, most recently BigBox VR (creator of Population: One, the Fortnite of VR) and Unit 2 Games (creator of Craya, a Roblox-esque VR gaming platform), for undisclosed sums.\nThese continuous investments in talent and studio acquisitions may seem steep for a business segment that accounts for less than 3% of Facebook's top line. But Mark Zuckerberg's ambitious vision for VR is powering a shopping spree that likely won't stop anytime soon. Is Facebook ahead of the game, or will its Oculus VR venture fail to move the needle?\nImage source: Getty Images.\nThe future of VR gaming\nZuckerberg has been talking up VR more than usual lately, partly thanks to accelerated adoption of the Oculus Quest 2 VR headset (according to Facebook -- but the company does not explicitly report figures for sold VR hardware). The CEO's first major talking point in Facebook's latest earnings report was VR and AR, predicting \"augmented and virtual reality to unlock a massive amount of value, both in people's lives and the economy overall.\"\nHis excitement about the technology is not unwarranted -- Fortune Business Insights forecasts that the global market for VR gaming will reach $45.2 billion by 2027 (from $5.1 billion in 2019). This translates to a compounded annual growth rate (CAGR) of 31.8%, compared to a CAGR of only 5.3% for the overall gaming console market over the same forecast period.\nHow Facebook got ahead\nFacebook's strategy for VR gaming domination starts with laying a solid foundation of technology and developer talent. In classic Facebook fashion, its primary tactic has been acquiring existing VR hardware and software companies.\nSince acquiring Oculus VR for $2 billion in 2014, the company has made significant progress in improving its VR hardware to better suit customers' needs. The current Oculus Quest 2 is a stand-alone headset (i.e., no wires to trip on or tangle up while playing) and requires no external device (such as a console or PC). Conversely, Sony's (NYSE:SONY) wired PlayStation VR headset requires a PlayStation console. The Quest 2's wireless, low-hardware conveniences combined with its lower price point relative to any other major headset on the market give Facebook a competitive edge when it comes to hardware.\nBut even the best VR headset is useless without great games, making Facebook's VR studio acquisitions crucial to building up its VR ecosystem. By acquiring small yet high-performing studios, Facebook is securing revenue from already-popular VR games on Oculus and retaining top software developers to create exclusive content within the Oculus platform. Considering the company's standard four-year stock option vesting schedule, it's unlikely that developers from studios like BigBox or Unit 2 will jump ship to work for a competitor anytime soon.\nWhy it'll stay ahead\nIf you know Facebook's business model, you're probably wondering when ads come into play. The company has announced that it will begin testing ads in select games on the Oculus platform, but it's still up in the air what exactly the ad experience will look like once testing begins -- and how VR gamers will react.\nIf the company can manage to integrate ads without breaking the immersive gaming experience, it will help developers earn more revenue (thus, attracting more developers to the Oculus platform) and could even make games more realistic. For example, real ads appearing on in-game TV screens and billboards would not break players' immersion in their gaming world, while still driving revenue for developers and Facebook.\nBeyond attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well -- its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.\nFor example, it would be much easier for a friend to influence you to purchase a $300 all-in-one VR headset than a PlayStation console and headset, which would total more than twice the cost of the Quest 2. Don't get me wrong -- Sony is a leading competitor in the VR gaming space and has shipped the most VR hardware units to date, but the company's network effects are arguably limited to existing PlayStation owners (about 15.7 million monthly active users, between the PS4 and the PS5).\nFacebook's 2.8 billion monthly active users have much more potential to add value to the Oculus platform by sheer volume of players, especially when it comes to popular social VR games like Population: One, Craya, and Beat Saber Multiplayer (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players.\nWhile some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player), Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players, Facebook is set up for success in rapidly gaining market share in VR gaming.\nWhat to watch for\nWhile Facebook's VR gaming revenue isn't reported explicitly (yet), the company's \"other revenue\" business segment is primarily Oculus. In Facebook's first-quarter 2021 earnings report, this segment grew 146% year over year to $732 million, implying an impressive growth rate for the company's VR business. Further, the Quest 2 has become the most used VR headset on popular gaming platform Steam, and by many estimates the Quest 2 is selling at least twice as fast as PlayStation VR, despite lagging behind in current overall market share.\nKeep an eye on this \"other revenue\" segment in future earnings reports, as well as any hard figures reported by the company on VR gaming revenue. More cautious investors may also want to wait for Facebook to complete its in-game ad testing process before investing based on the company's growth potential in VR. It is undoubtedly a risk to user growth if ad content is not executed smoothly.\nIt's impossible to dive into every point in Facebook's value and growth story in one sitting, but the stock seems fairly valued given its growth potential -- FB is even rated \"undervalued\" by Morningstar. The company's wide economic moat in social gaming is unmatched thanks to a massive user base and vast user data, and these competitive advantages can easily translate to driving profits and market share for its VR gaming business.","news_type":1},"isVote":1,"tweetType":1,"viewCount":329,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":385468237,"gmtCreate":1613572676429,"gmtModify":1631889320606,"author":{"id":"3573474794824934","authorId":"3573474794824934","name":"Newbie101","avatar":"https://static.tigerbbs.com/ed57ed625946dfe1283d2c746eec3819","crmLevel":7,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3573474794824934","authorIdStr":"3573474794824934"},"themes":[],"htmlText":"Yep","listText":"Yep","text":"Yep","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/385468237","repostId":"1195476575","repostType":4,"repost":{"id":"1195476575","kind":"news","pubTimestamp":1613555269,"share":"https://www.laohu8.com/m/news/1195476575?lang=&edition=full","pubTime":"2021-02-17 17:47","market":"us","language":"en","title":"Index funds don’t buy IPOs but here’s why they should","url":"https://stock-news.laohu8.com/highlight/detail?id=1195476575","media":"MarketWatch","summary":"How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S.","content":"<p>How indexed mutual funds and ETFs can capture the powerful gains when a company goes public</p>\n<p>The U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose acquisition vehicles, U.S. IPOs last year raised $83 billion in gross proceeds. The prices of these IPOs jumped during the initial day of trading by 36% on average.</p>\n<p>Despite these high returns, index funds — including mutual funds and exchange-traded funds — almost never bought IPOs at their initial offering price. Instead, index funds waited to buy IPO stocks until near the date on which they were added to the relevant index — typically at the end of a quarter within six months to a year after the IPO.</p>\n<p>Yet as the index inclusion date nears for any IPO, its price typically surges in anticipation of a barrage of purchases — driving up the price that index funds must pay for that stock. For example, the price of Tesla spiked once it became likely that the company would be added to the S&P500.</p>\n<p>In this article, I outline the data from 2010 to 2018 about the high initial returns for IPOs as well as the concerns holding back index funds from buying IPOs before they are included in the index. Then, I make a path-breaking proposal — allowing any index fund that tracks the Russell 1000 Index to meet these concerns by early buying of IPOs if, and only if, they are large relative to the size of the index.</p>\n<p>Like many other studies,the study that I co-authored with two experts on indexing found high returns in IPO stock prices during the initial day of trading. After this initial day of trading, the study evaluated IPO returns by a measure known as the index-adjusted performance (IAP) — the difference between the total return of the security and the total return of the index from the closing price on the first day of trading to the closing price of any following day. For example, a positive IAP would signal that an IPO has outperformed the index from the close of the first day of trading until the date the IPO is included in the relevant index.</p>\n<p>The study calculated these two metrics of returns for all 932 U.S. IPOs offered in the nine years between January 2010 and December 2018. Of these 932 IPOs, 115 were included in the Russell 1000 within the first six months of trading.</p>\n<p>The study used the Russell 1000 because it includes 92% of the total market capitalization of all listed stocks in the U.S. equity market. The Russell 1000 contains the top 1000 publicly traded U.S. companies according to market capitalization. IPOs are considered for inclusion at the end of each quarter, strictly based on their market capitalization.</p>\n<p>The first-day return for these 115 IPOs was highly positive — 22% on average with a median gain of 10%. Similarly, looking at the IAP for these 115 IPOs included in the Russell 1000, the study found a positive trend — with an average IAP of 6.89% and median of 5.24% between the IPO and the index inclusion date.</p>\n<p>Both of these trends show that index funds could generate excess return by buying IPOs before they are added to the index. The greatest return could be realized by buying IPOs at the initial offering price and holding them through the index inclusion date. Index funds could also realize significant excess returns by buying IPOs after their first day of trading and holding them through the index inclusion date.</p>\n<p><b>Risks in the returns</b></p>\n<p>Index funds would face several risks associated with such early purchases of IPOs.</p>\n<p>First, and most importantly, no one knows which IPOs will be added to the index at the time of the IPO. An index fund might purchase an IPO stock that doesn’t get added to the index. In that event, the fund would have to sell the IPO stock, potentially at a loss. The price of the IPO stock would decline because there would no longer be the expectation that other index funds would be required to buy that stock when it is added to the index.</p>\n<p>A second concern is that an index fund would not get a large enough allocation in an IPO to reflect the stock’s future position in the index — for example, when a popular tech company goes public. Even so, an index fund can still generate excess returns by buying more of such a stock on the day following an IPO and holding that stock until it is added to the index.</p>\n<p>Third, since the index fund would be holding stocks that are not included in the index — at least for several months — the fund would experience tracking error. Tracking error occurs when the returns on an index fund portfolio differ materially from those of the index it is benchmarked against. But investors would probably not be overly concerned if the fund beat the index it was designed to track.</p>\n<p>Of course, the prospectus of such an index fund would have to make clear that it would be buying stocks in the initial offerings of IPOs and after their first day of trading. The prospectus should also delineate the risks involved when the fund buys IPOs before they are included in the index.</p>\n<p>To mitigate the most important risk — that the IPO will not be included in the index — I recommend that index funds should purchase an IPO only if its expected weight in the Russell 1000 is relatively large. The expected weight equals the gross proceeds raised by the IPO, divided by the total freely traded float of stocks in the index. Since the Russell 1000 Index is composed of the top 1000 U.S. companies by market capitalization, the larger the IPO is relative to the index, the more likely that the IPO will be added to that index.</p>\n<p>This strategy could be adapted to varying risk tolerances of index funds by adjusting the size threshold for early purchases of an IPO. In a conservative strategy, the index fund would purchase only IPOs with the largest expected weight in the index, since they are most likely to be included in the index. In a more aggressive strategy, by contrast, the size threshold for buying IPOs would be lower.</p>\n<p>The study examined three thresholds for risk appetite, defined in terms of the expected weight of the IPO in the index: 1.0 basis point for conservative; 0.75 basis point for pragmatic and 0.50 basis point for aggressive. (One basis point equals 1/100 of 1%)</p>\n<p>The results, summarized in the table below, show that this strategy would have been successful at generating excess returns without significant risks during the period from 2010 through 2018.</p>\n<p>For example, 100% of the largest IPOs that would have been purchased under the conservative strategy during this period were added to the index within the first six months and generated excess returns above 15%. Under the aggressive strategy, 88% of the IPOs that would have been purchased during this period were included in the index within six months and generated excess returns of close to 17%.</p>\n<p><img src=\"https://static.tigerbbs.com/0fc52461985f7a3ca10fac53ba2ccf05\" tg-width=\"1260\" tg-height=\"476\"></p>\n<p>My recommendation is that an index fund based on the Russell 1000 buy relatively large IPOs in their initial offerings or, if necessary, immediately after their first day of trading. Although there is a modest risk that such IPOs will not subsequently be included in that index, the excess returns from this strategy outweigh the risks.</p>\n<p>I would not recommend that any index fund use this strategy to buy an IPO effected by merging a private company with a special acquisition vehicle. I also would not recommend this strategy for any index fund based on other indices where it is more difficult to predict when and whether IPO stocks will be included in the index, such as the S&P 500, where stocks included are chosen by a committee.</p>","source":"market_watch","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Index funds don’t buy IPOs but here’s why they should</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIndex funds don’t buy IPOs but here’s why they should\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-02-17 17:47 GMT+8 <a href=https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose ...</p>\n\n<a href=\"https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/index-funds-dont-buy-ipos-but-heres-why-they-should-11613194940?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/599a65733b8245fcf7868668ef9ad712","article_id":"1195476575","content_text":"How indexed mutual funds and ETFs can capture the powerful gains when a company goes public\nThe U.S. market for IPOs (initial public offerings) was red hot in 2020. Excluding special purpose acquisition vehicles, U.S. IPOs last year raised $83 billion in gross proceeds. The prices of these IPOs jumped during the initial day of trading by 36% on average.\nDespite these high returns, index funds — including mutual funds and exchange-traded funds — almost never bought IPOs at their initial offering price. Instead, index funds waited to buy IPO stocks until near the date on which they were added to the relevant index — typically at the end of a quarter within six months to a year after the IPO.\nYet as the index inclusion date nears for any IPO, its price typically surges in anticipation of a barrage of purchases — driving up the price that index funds must pay for that stock. For example, the price of Tesla spiked once it became likely that the company would be added to the S&P500.\nIn this article, I outline the data from 2010 to 2018 about the high initial returns for IPOs as well as the concerns holding back index funds from buying IPOs before they are included in the index. Then, I make a path-breaking proposal — allowing any index fund that tracks the Russell 1000 Index to meet these concerns by early buying of IPOs if, and only if, they are large relative to the size of the index.\nLike many other studies,the study that I co-authored with two experts on indexing found high returns in IPO stock prices during the initial day of trading. After this initial day of trading, the study evaluated IPO returns by a measure known as the index-adjusted performance (IAP) — the difference between the total return of the security and the total return of the index from the closing price on the first day of trading to the closing price of any following day. For example, a positive IAP would signal that an IPO has outperformed the index from the close of the first day of trading until the date the IPO is included in the relevant index.\nThe study calculated these two metrics of returns for all 932 U.S. IPOs offered in the nine years between January 2010 and December 2018. Of these 932 IPOs, 115 were included in the Russell 1000 within the first six months of trading.\nThe study used the Russell 1000 because it includes 92% of the total market capitalization of all listed stocks in the U.S. equity market. The Russell 1000 contains the top 1000 publicly traded U.S. companies according to market capitalization. IPOs are considered for inclusion at the end of each quarter, strictly based on their market capitalization.\nThe first-day return for these 115 IPOs was highly positive — 22% on average with a median gain of 10%. Similarly, looking at the IAP for these 115 IPOs included in the Russell 1000, the study found a positive trend — with an average IAP of 6.89% and median of 5.24% between the IPO and the index inclusion date.\nBoth of these trends show that index funds could generate excess return by buying IPOs before they are added to the index. The greatest return could be realized by buying IPOs at the initial offering price and holding them through the index inclusion date. Index funds could also realize significant excess returns by buying IPOs after their first day of trading and holding them through the index inclusion date.\nRisks in the returns\nIndex funds would face several risks associated with such early purchases of IPOs.\nFirst, and most importantly, no one knows which IPOs will be added to the index at the time of the IPO. An index fund might purchase an IPO stock that doesn’t get added to the index. In that event, the fund would have to sell the IPO stock, potentially at a loss. The price of the IPO stock would decline because there would no longer be the expectation that other index funds would be required to buy that stock when it is added to the index.\nA second concern is that an index fund would not get a large enough allocation in an IPO to reflect the stock’s future position in the index — for example, when a popular tech company goes public. Even so, an index fund can still generate excess returns by buying more of such a stock on the day following an IPO and holding that stock until it is added to the index.\nThird, since the index fund would be holding stocks that are not included in the index — at least for several months — the fund would experience tracking error. Tracking error occurs when the returns on an index fund portfolio differ materially from those of the index it is benchmarked against. But investors would probably not be overly concerned if the fund beat the index it was designed to track.\nOf course, the prospectus of such an index fund would have to make clear that it would be buying stocks in the initial offerings of IPOs and after their first day of trading. The prospectus should also delineate the risks involved when the fund buys IPOs before they are included in the index.\nTo mitigate the most important risk — that the IPO will not be included in the index — I recommend that index funds should purchase an IPO only if its expected weight in the Russell 1000 is relatively large. The expected weight equals the gross proceeds raised by the IPO, divided by the total freely traded float of stocks in the index. Since the Russell 1000 Index is composed of the top 1000 U.S. companies by market capitalization, the larger the IPO is relative to the index, the more likely that the IPO will be added to that index.\nThis strategy could be adapted to varying risk tolerances of index funds by adjusting the size threshold for early purchases of an IPO. In a conservative strategy, the index fund would purchase only IPOs with the largest expected weight in the index, since they are most likely to be included in the index. In a more aggressive strategy, by contrast, the size threshold for buying IPOs would be lower.\nThe study examined three thresholds for risk appetite, defined in terms of the expected weight of the IPO in the index: 1.0 basis point for conservative; 0.75 basis point for pragmatic and 0.50 basis point for aggressive. (One basis point equals 1/100 of 1%)\nThe results, summarized in the table below, show that this strategy would have been successful at generating excess returns without significant risks during the period from 2010 through 2018.\nFor example, 100% of the largest IPOs that would have been purchased under the conservative strategy during this period were added to the index within the first six months and generated excess returns above 15%. Under the aggressive strategy, 88% of the IPOs that would have been purchased during this period were included in the index within six months and generated excess returns of close to 17%.\n\nMy recommendation is that an index fund based on the Russell 1000 buy relatively large IPOs in their initial offerings or, if necessary, immediately after their first day of trading. Although there is a modest risk that such IPOs will not subsequently be included in that index, the excess returns from this strategy outweigh the risks.\nI would not recommend that any index fund use this strategy to buy an IPO effected by merging a private company with a special acquisition vehicle. I also would not recommend this strategy for any index fund based on other indices where it is more difficult to predict when and whether IPO stocks will be included in the index, such as the S&P 500, where stocks included are chosen by a committee.","news_type":1},"isVote":1,"tweetType":1,"viewCount":170,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
