Will Facebook (FB) Stock Gain After Two Big Ears Deal?
NEW YORK (TheStreet) -- Facebook (FB) - Get Report stock is down 0.99% to $116.19 in afternoon trading on Monday even though the social media company expanded its virtual reality portfolio with the acquisition of Two Big Ears, an Edinburgh, Scotland-based developer of audio applications and tools.
Founded in 2013, Two Big Ears focuses on mobile and emerging technologies, including virtual reality. Terms of the deal were not disclosed.
The company's virtual reality product, a real-time 3D audio and environmental modelling engine, and its team will be integrated into Oculus VR, a virtual reality hardware manufacturer that Facebook acquired in March 2014 for $2 billion.
"By joining with a company that shares our values and our vision, we will be able to scale our technology even quicker as we continue powering immersive audio experiences," Two Big Ears said on their website.
Virtual reality hardware and software sales are expected to generate $7 billion in revenue for Facebook by 2020, accounting for 10% of total revenue, according to Cantor Fitzgeraldanalysts.
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Separately, Facebook has a "buy" rating and a letter grade of A- at TheStreet Ratings because of the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins.
You can view the full analysis from the report here: FB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
