Will the Facebook Stock Split Happen in 2017?

Facebook stock splitThe Facebook stock split still does not have an official date, and since we haven't received an update from the company since the Facebook stock split vote, it may be pushed back to 2018.

Facebook Inc. (Nasdaq: FB) didn't announce any FB stock split news in its Q4 2016 earnings report, further indicating it may not happen in 2017.

But if you are a FB shareholder, it's important to know that a Facebook stock split has been approved and will happen. It's just a matter of when.

Here's why Facebook will be splitting its stock...

The 3-for-1 Facebook Stock Split

Facebook shareholders approved a 3-for-1 stock split on June 20, 2016.

What this means is for every Class A Facebook share, shareholders will receive three shares of the newly created Class C share. Right now, Class A shares have one vote per share.

But when shareholders receive Class C shares, they will not have any voting power.

Some investors don't like this, as they feel nonvoting shares won't allow them rights to voice their concerns.

However, CEO Mark Zuckerberg owned roughly 60% of the voting power before the split was approved. That means no matter how shareholders voted, Zuckerberg would always have the final say. Essentially, nothing is changing from a voting standpoint.

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So for FB shareholders now, the most important issue to focus on is what will happen on the Facebook stock split date.

official Facebook stock split dateThat's because it may appear shares were cut by a third overnight. But in reality, the value of FB shares will remain the same.

For example, Under Armour Inc. (NYSE: UA) underwent a 2-for-1 stock split on April 8, 2016. On April 7, 2016, the UA stock price opened at $85.82 per share.

But on the April 8 stock split date, the UA stock price opened at $45.27 per share.

The value of UA stock was the same, it was just the price that had changed.

And on the FB stock split date, it will look similar to Under Armour's split, except it's a 3-for-1 split.

But you don't want to wait to buy FB stock just because it "appears" cheaper.

Here's why...

Our Bold Facebook Price Prediction Ahead of the Facebook Stock Split

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We believe the company has four revenue generators that will cause the Facebook stock price to skyrocket over the next three years:

  • Messenger
  • WhatsApp
  • Instagram
  • Workplace

Facebook's communication services Messenger and WhatsApp are still in the early stages of monetization.

For instance, you can order an Uber directly in the Messenger app. You can also book hotel rooms and flights through Messenger, and even send friends and family members money through the app.

Analysts from Deutsche Bank AG (USA) (NYSE: DB) project Messenger and WhatsApp could generate as much as $10 billion annually by 2020.

Facebook's next revenue source, Instagram, is a picture app that could generate billions for Facebook this year.

According to eMarketer, Instagram generated $630 million in revenue in 2015. For 2016, Instagram was projected to generate $1.5 billion.

By 2018, Instagram is projected to generate $5 billion.

Finally, the newest billion-dollar revenue source that will help the stock price of Facebook climb could be Workplace.

Workplace is a communication tool for businesses that allows more effective communication. Workplace can be used to share group discussions, connect employees through video calling, and allow employers to create personalized News Feeds for its employees.

By 2019, advisory firm Compass Intelligence believes the global enterprise messaging app market will generate $1.9 billion in annual revenue.

And because of these massive revenue sources and Zuckerberg's visionary leadership, the Facebook stock price will skyrocket over the next three years.

That's why Money Morning Director of Tech & Venture Capital Research Michael A. Robinson has a bold price prediction.

By 2020, Robinson believes the Facebook stock price will trade for $250 per share.

From today's opening price of $134.16, that's a potential profit of 86% in just three years.

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