The Bullish Case for Facebook’s Rebranding: Is It Too Late?

Written by Sean GraytokUpdated: 8th May 2022
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Don’t worry about deleting Facebook. Mark Zuckerberg did it for you. Now, he’s rebranding the company for the metaverse.

Here are the Bull Cases for Meta:

  • Mark Zuckerberg Is Starting Over
  • Missed FB? Here’s Another Chance
  • The Tatum Cycle
  • Disrupt It Yourself
  • The Regulators Need Another Decade
  • The Perfect Storm For A Rebrand

#1. Mark Zuckerberg Is Starting Over

Let’s say Mark Zuckerberg left Facebook and started a new company. Without even knowing what the company does, I bet 10 out of 10 VCs would invest in that Series A.

Investing in Meta is like buying into a new Zuckerberg startup. Although he’s been laying the foundation of this transition for years, Zuckerberg is metaphorically starting over. But this time around, he’s not wearing pajamas to meetings.

Now, Zuckerberg has 18 more years of experience, he’s surrounded by the sharpest minds money can buy, and most importantly, he’s got access to the world’s data. Oh, and he’s got a trillion-dollar head start on the 2004 version of himself.

#2. Missed FB? Here’s Another Chance

People didn’t understand the potential of Facebook in 2004 the same way people don’t understand the potential of the metaverse in 2021. With hindsight, Facebook feels inevitable. I think we’ll reflect back on the metaverse in a similar way.

I’m not going to recount the incredible evolution of Facebook (ok, quickly: cat pics to presidential elections), but no one, except for maybe Peter Thiel, realized what it could become or predict the ancillary impacts it would cause.

Think of the number of companies that have been created or destroyed as a result of Facebook. Meta will spark a similar flame in the startup ecosystem, and it’s already caused a number of publicly-traded companies to announce their own metaverse strategy.

If enough wealthy people want something to be a thing, they will fund it until it becomes a thing. Capital allocators are going to back Mark Zuckerberg more than they’re not, and other technology CEOs are going to follow his lead.

The metaverse is no longer something that people just write Twitter threads about. It’s the number one priority of one of the best operators in the world.

He’s going to spend every waking hour on this technology for the next decade, and so will the competition as they attempt to keep up.

#3. The Tatum Cycle

Despite billions of users and endless scrolling, Facebook has never been a popular company, and it hit ‘peak evil’ right up to the name change on October 28th. If you lay out Time Magazine covers that chronicle Facebook over the years, you’ll see Zuckerberg experience a perception cycle that the mainstream media puts all prominent figures through, something we call the Tatum Cycle.

The Tatum Cycle is essentially an extension of the Gartner Hype Cycle, but with a focus on individuals instead of technologies. It’s named after Boston Celtics player Jayson Tatum, and describes how a player goes from ‘underrated’ in the eyes of the media, to ‘overrated,’ and then becomes so overrated that they actually become underrated again.

It’s important to note that the media’s perception, and how they react to each other’s perspectives, are the only variables changing here. This cycle happens at varying lengths, but oftentimes the player improves in absolute terms, as many of them are early in their careers and are still getting better by the day.

Mark Zuckerberg has been getting washed through the Tatum Cycle for years, but we’re at a new inflection point in his cycle. He’s becoming underrated again.

The concept of the metaverse is so ‘out there’ that he and his company will be decreasingly perceived as ‘evil’ in the eyes of the media. They will simply shift their attention to the absurdity of his new idea. Here’s the Zuck Cycle:

Although, the Zuck Cycle does not end in the way the Tatum Cycle does. His cycle looks more like concentric circles that continually expand as each new idea builds on the previous one.

He’s 37 years old, he gets better at what he does by the day, and he will do this until the day he dies — or more likely, uploads his consciousness and lives forever.

#4. Disrupt It Yourself

“If your social media company is weakening, disrupt it yourself.” – Sun Tzu

Amongst the Big Tech companies, Facebook has always felt the most disruptable to me, while Zuckerberg himself seemed to be the least likely to ‘fail’ amongst the respective CEOs.

I struggled with the idea of being bearish on Facebook, but bullish on Zuckerberg.

Facebook has 3 billion people on it, but none of my friends use it, and all of my older relatives do. While old(er) people still click on ads, I don’t think an aging demographic makes anyone bullish.

Then there’s Instagram. My feed has more ads of stuff I’ll never buy than pictures of my friends. While Instagram has a younger crowd, there doesn’t appear to be strong loyalty to the platform specifically. TikTok is a caffeinated version of IG and has lapped it accordingly, at least in terms of engagement.

The rise of decentralization is another bear case for Facebook. The company will have to adjust to the changing landscape as decentralized finance enables more decentralized social platforms to materialize.

Also, the potency of the Instagram experience has subsided since the iOS privacy change. Facebook doesn’t know me as well, and I’m willing to have a slightly worse experience on the platform for more privacy at the margins.

Others agree: 96% of iOS users opted out of app tracking with the new iOS update. The other 4% work at Facebook.

Six months after Apple waged a war in an effort to ‘kill’ Facebook, Mark Zuckerberg killed Facebook himself.

#5. The Regulators Need Another Decade

Politicians are going to need ten years to understand the metaverse, let alone create policy to regulate it. Just like he did with Facebook, Zuckerberg is creating a new market that he will eventually dominate.

He understands this technology better than anyone. He will decide the rules, and it will take regulators until 2030 to comprehend the actions Zuckerberg takes in 2022.

Zuckerberg probably understands the metaverse in a way that we are unable to yet. This gap allows him to make moves and acquisitions in the next few years that would probably be blocked if regulators were on the same level of understanding as him.

Antitrust allegations put Facebook under a microscope that periodically paused acquisitions and expansion.

The rebrand forces regulators to use a different microscope. In the meantime, Zuckerberg is free to operate for the first time in years.

#6. The Perfect Storm for a Rebrand

Facebook shares surged 41% on the year and put Facebook in the tres commas club. But the whistleblower case wiped out a large portion of those gains. The stock has fallen 20% in the matter of weeks.

As I said earlier, it felt like Facebook was reaching ‘peak evil’ in October 2021 as the whistleblower sparked a conversation around Facebook’s negative impact on mental health.

However, the rebrand has completely shifted the conversation.

No one is contemplating the evils of Facebook right now — they’re making memes and erroneously buying shares of a video game ETF.

This rebrand was coming one way or another, but it feels like the timeline of it was accelerated given these recent events.

In a world without the whistleblower, and the stock at all time highs, does Zuckerberg change the name of his company?

That’d be quite the power move, but probably not one he would make.

The Bullish Case for Meta

Zuckerberg has something to prove again. Say what you want about him, but he’s putting his life’s work on the line.

I’m not sure if you want to bet against a hungry Mark Zuckerberg. 

This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched Meta.

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and is a recognized expert in investing, financial management, and Bitcoin. His work has been cited in leading industry publications, such as InvestorPlace and Business Insider. Sean is interested in the people and companies who are driving technological innovation.