Shareholders approved a 3-for-1 split on June 20, but FB shareholders are asking will Facebook stock split after new details emerged from a class-action lawsuit filed in April.
The results of the FB stock split vote were never in doubt. CEO Mark Zuckerberg controlled nearly 60% of the voting power before the vote, so the FB stock split vote was always going to pass.
However, shareholders said in the April lawsuit that they won't benefit from the split. The shareholders don't believe it's fair Zuckerberg will sell 99% of his FB shares over time and still retain voting power.
Editor's Note: To find out why Zuckerberg wanted a stock split and what will happen to your FB stock, read our Facebook Stock Split Guide.
And recent unsealed court filings in Delaware show a board member may have been biased in helping Zuckerberg receive approval for the FB stock split by its board...
Will Facebook Stock Split Be Delayed by Lawsuit?
According to Bloomberg, Facebook created a special committee to represent shareholders while reviewing the proposed stock split. The committee members - Susan Desmond-Hellmann, Erskine Bowles, and Marc Andreessen - were chosen because they would be the least financially affected by a Facebook stock split.
But according to the court documents, Andreessen provided Zuckerberg with information to help him negotiate the split. Andreessen reportedly gave Zuckerberg the questions he would be asked before he met with the committee.
Andreessen also reportedly sent the 32-year-old CEO live updates to let him know which of his arguments were working and which weren't working with the committee.
Until the lawsuit is settled, it could take years for Facebook to officially split its stock.
Google, now known as Alphabet Inc. (Nasdaq: GOOGL, GOOG), proposed a stock split in 2012. Google was also sued over the split, like Facebook, and wasn't able to split its stock until 2014.
The lawsuit could cause investors to panic over the short term as the question of when will Facebook stock split is still unanswered. But for our long-term Facebook stock price projection, we believe the FB stock price will continue to climb.
Here's our bold Facebook stock price target...
Ahead of the Facebook Stock Split, Here's Our Bold Price Prediction
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Over the last two years, the FB stock price has climbed more than 54%. In comparison, the S&P 500 has returned just 17.47%.
And we expect even more gains are ahead...
Zuckerberg has turned Facebook into more than just a social media site. He has three new massive revenue sources that will generate billions of dollars.
The first revenue source is Instagram. In 2012, Facebook purchased the picture app for $1 billion. It didn't make money and only had 30 million total users when Zuckerberg purchased it. Now, Instagram has 600 million monthly active users (MAUs).
The picture app also generated as much as $750 million in revenue in 2015, and eMarketer projects it will account for as much as 10% of Facebook's global revenue by 2017.
The second revenue source is WhatsApp/Messenger.
WhatsApp and Messenger are communication apps with unique features. Through Messenger, users can send money to friends and family, order food, and even book flights. WhatsApp allows you to send messages, photos, and videos with up to 256 people at once.
By 2020, analysts at Deutsche Bank AG (USA) (NYSE: DB) project WhatsApp and Messenger will generate a combined revenue total as high as $10 billion annually.
The third massive revenue source for Facebook will be its virtual reality (VR) division, Oculus VR.
Zuckerberg purchased Oculus VR in 2014 for $2 billion. Oculus makes a headset, Oculus Rift, which is mainly used in the video game industry right now.
But Zuckerberg purchased Oculus VR for its future capabilities...
He believes headsets will be used to help patients and doctors have face-to-face meetings even if they aren't in the same room. He also believes headsets can be used to give Oculus Rift users front-row seats to sporting events in the comfort of their own homes.
By 2020, market intelligence firm Tractica believes sales from VR content, head-mounted displays, and accessories will reach $21.8 billion.
Because of these new billion-dollar revenue sources, Money Morning Director of Tech & Venture Capital Research Michael A. Robinson has a bold Facebook stock price prediction.
By 2020, Robinson sees Facebook stock skyrocketing to $250 per share. From today's opening price of $120.08, that's a potential profit of 108% in less than three years.
The Bottom Line: The Facebook stock split vote passed in June 2016. But Facebook will have to settle a class-action lawsuit filed in April before the 3-for-1 split can happen. This may mean shareholders are less confident in FB stock in the short term, but our long-term price prediction shows prices continuing to climb.
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