Expansion Update: I’m Now in the Business of Selling Your Attention (META)

META April 28, 2025 By Brad

Investment Thesis Buy

I'm extremely proud to announce that my $10K stock market startup, Uncle Brad Inc., has acquired a social media company!

Actually, three social media companies. You might have even heard of one of them before.

  • One's called "Facebook"
  • Another's "Instagram"
  • And a third is "WhatsApp"

Oh, what's that? You're already a user? Hey, that's awesome! Nice to monetiz... - err, sorry - meet you!


Here's why I made the acquisition.

First, the math.

META is selling for a discount compared to the rest of the market on a P/E basis — even while growing faster than almost anyone else.

  • For every $1,000 I invest, I’m buying roughly $45 of net income, and that number is growing much faster than the S&P 500 average.
  • In short, I'm buying superior growth... at inferior prices. (Thanks, market.)

Second, the business model.

  • Meta doesn’t sell products.
  • It sells attention.
  • And it sells it better than anyone else.

There are entire businesses being built on a simple formula:

"$1 into Facebook ads → $3–5 in profit."

When you’re the platform that makes that math work — you don’t have customers.

You have addicts with business credit cards.

And that dynamic isn’t slowing down. It’s speeding up.

Third, the balance sheet.

  • META has basically no net long-term debt.
  • It’s spitting off cash.
  • And it’s buying out my fellow owners one-by-one, which means my share of the business grows while I sit at my desk drinking Coke Zero.

Lastly, the track record.

  • META has spent the last decade compounding revenue, profit, and user base faster than just about anyone outside of maybe Amazon and Google.
  • They’ve seen regulation threats, product shifts, competition waves...
  • and they just keep shipping cash back to owners.

I feel more conviction about this business than any of my other businesses - and it's not even close.


Oh, and did I mention the deal I got? I feel like I bought the whole candy store for the price of a Snickers. Consider the following two options that I could have bought with my $2,311.94 investment (which is 23.11% of my $10K stock market start-up):

  • Option #1: Buy $84 of current net income from a business that:
  • makes basically everything in the U.S.;
  • has grown its earnings by 8.7% per year over the last 10 years;
  • has grown its revenue by 6.8% per year over the last 10 years; and
  • carries about $240 of long-term debt.

or

  • Option #2: Buy $105 of current net income from a business that:
  • utterly dominates its market (the attention of literally half the people on earth);
  • has grown its earnings by 34% per year over the last 10 years;
  • has grown its revenue by 26% per year over the last 10 years; and
  • has no long-term debt.

It would be straight-up stupid for me to pay more $$ for less profit, especially considering each option's future prospects for growth. Even if Option #2's growth rate gets cut in half going forward, Option #2 will still be making almost 2x as much as Option #1 in five years.

  • Option #1: S&P 500
  • Option #2: Meta


Summary:

My new social network business line is a profit machine that sells profit machines (via ads) to other businesses.

  • It's growing faster than the market.
  • It's cheaper than the market.
  • And it's funding my expansion into global attention commerce — without needing me to post a single Reel.

My new social networks, representing about 23% of the total investment by Uncle Brad Inc., should grow substantially over the coming years. I'm excited to entrust it to the highly competent managers that are making bank for Uncle Brad Inc. Welcome to Uncle Brad Inc., META!

Investment Criteria
For Success:

Continued efficiency for their advertising platform

Risks to Consider:

Huge quantities of people moving off the Facebook, Instagram, and WhatsApp platforms to a new alternative

Anticipated Hold Period:

Very Long-term (5+ years)

Investment Amount

$2311

Decision

Buy

Conviction Level

Highest - Either this thing works, or someday I'll be an 80-year old Walmart greeter.

Your Share of Net Income

$31.25

Competitive Analysis
Competitive Advantage

They have tons of info about billions of people and can use that info to micro-target ads in ways that literally no one else can. This is what has driven their business historically, and will continue to do so into the future.

Key Non-Financial Metrics

I need to keep track of marketers' ROAS metrics on META platforms. I will also keep an eye on the antitrust filings. But a breakup of META looks, at least today, like an unlikely outcome. This is supported by my research on expert opinions as well as the fact that META's offer to the FTC was so incredibly low - it signals high confidence in their legal position.

Net Income Projections
Net Income
CAGR: 33.0%
Analyst Notes:

META has achieved a 10-year average annual growth rate in net income of 34%. While I don't think this rate of increase will continue, I do see a ~15-20% annual rate of growth in net income over the next 3-5 years as a high likelihood.



Based on my $2,311.94 investment, My Share of Net Income is currently $104.67 (April 2025). When META announces FY 2025 financial results, I think My Share of their earnings are likely to be around $120. And I think they'll hit around $140 in FY 2026.

Operating Margin Analysis
CAGR: 2.2%
Analyst Notes:

None

What is Operating Margin?

Operating margin measures a company's profit from operations as a percentage of revenue. It shows how efficiently a company can generate profit from its core business operations, before accounting for interest and taxes. Higher margins typically indicate better operational efficiency.

Dividends
Analyst Notes:

META has just started paying a dividend. They've obviously got a ton of room to increase that dividend, given that their payout ratio is so low (paying out only about 8% of net income). But I would rather that they continue buying back stock, for two reasons.



First, I think the stock is still very attractively valued, given that it trades at a lower multiple than the S&P 500 overall.



Second, I would rather they buy back stock, as it is more tax efficient for me and will drive further growth in My Share of earnings.

Payout Ratio
Analyst Notes:

Very conservative - lots of room for growth in distributions (someday - probably several years into the future).

Revenue
CAGR: 27.7%
Analyst Notes:

This chart shows the power of the META money machine that advertisers have discovered. Marketers can put $1 in and get $3-5 out. They're going to rinse-and-repeat on that, and it will drive revenue growth. This is the primary reason why I think META is poised to do so well in its business over the foreseeable future.

Avg Annual Growth Rate (10Y)
Balance Sheet Cash
CAGR: 8.5%
Analyst Notes:

Cash continues to grow, and it exceeds META's long-term debt. My Share of the cash on the balance sheet is about $73, while My Share of Long-Term Debt is only $48.

Debt
Analyst Notes:

No net debt (after backing out cash), but they have tons of capacity to borrow if the opportunity ever presents itself.

Free Cash Flow
CAGR: 20.2%
Analyst Notes:

Strong free cash flow, which means they have tremendous power for share buybacks and dividends.

Cash Flow from Operations
CAGR: 27.5%
Analyst Notes:

Strong CFFO; this business prints cash.

Conclusion

This is the company about which I have the most conviction of all. As close to a "forever" business as you can find in Uncle Brad Inc.

Comments

4 Comments
Brad
November 15, 2025, 07:06 PM
Update 11/15/2025: I just bought more META from other shareholders. My social media biz (i.e., META) continues to fire on all cylinders from a business perspective. META just reported its third quarter results - 26% year-over-year revenue growth! 22% profit growth (before a one-time tax item)! 3.54 billion daily active users! 14% increase in ad impressions! 10% increase in price per ad! All of that is sunshine and roses! META also continues to progress on its glasses, which augment reality and display info directly in your glasses. Will that end up working? Who knows! But it's definitely worth pursuing further. On the somewhat negative side, META has guided that its costs will increase A LOT going forward, as will its spend on AI-related infrastructure (e.g., NVDA chips and data centers). But META is confident that they will be able to make money from all of that compute. I like management's track record, and I like that they are not staying stagnant. So why did I buy more at the equivalent of $605 per share? Because this biz trades at a P/E multiple below the market as a whole, grows at a WAY ABOVE MARKET rate, and will continue to maintain very high margins (some of the highest of any company in the world) after a brief blip lower over in 2026. I'm looking 5 years out, and I don't see any way that META hasn't at least doubled its earnings relative to Q3 2025 by Q3 2030. And double the earnings, even at a lower PE multiple, means that the value of META will nearly double as well.
Brad
September 12, 2025, 03:24 AM
Update 9/11/2025: Things are looking very good for Uncle Brad's $10K stock market start-up. In particular, my social media line of business - META! - is hitting on all cylinders. Earnings are fantastic and healthy, and the market value of the investment is up, as of today, 40.76% in 4.5 months - NOT BAD! The financials on this thing are hitting it OUT OF THE PARK. No slowdown in sight (except for short-term over the next few quarters as stock / comp expense hits for all of the new AI hires the company has made). But no big deal on those hires - in fact, I am glad that they are swinging for the fences in early innings for A.I. That means they aim to win, and winning will be worth tens of trillions of dollars. Going to maintain my social media business within Uncle Brad's $10K start-up for a long time to come.
Brad
May 31, 2025, 03:27 AM
Update May 30, 2025: I think the smartest bet I could possibly make is to bet all - or almost all - of my Stock Market Startup on A.I. It is truly going to change everything and be transformational to society in ways we don't comprehend yet. Based on my analysis and research, I think both Meta and Google are posed to benefit tremendously from A.I. For Meta, as an example, there was recently a court filing that indicated that Meta itself estimates that its aggregate revenue from A.I. over the next 10 years will be between $460 BILLION (base case) and over $1 TRILLION ("gen Ai wins" case). From everything I've seen, Gen AI is definitely going to win. If they maintain a similar margin on future revenue to what they are making now, they could potentially make half a trillion dollars of cumulative profit from A.I. alone over the next 10 years. And the 10 after that would only be even bigger. This is truly "world-changing stuff." Both Google and Meta are going to benefit. And I think Amazon will as well, but it is much more richly valued than the other two. I'm also going to keep my eye on any pure A.I. companies that go public anytime soon - probably makes sense to take a position, even at a very rich valuation.
Brad
May 01, 2025, 02:36 AM
Update April 30th: My new social media business unit is already doing gangbusters results. Earnings per share for the most recent quarter was up 37% over the same quarter in the previous year! While I don't my business will sustain that pace going forward, it is right in line with the average annual increase over the previous 10 years. And my new business unit was also able to grow revenue by 16% - another great result that is in-line with my expectations of ~15% annualized revenue growth over the next 5+ years. The good news just doesn't stop, as the management team told me it was also able to buy out some of the other owners. This increased my stake of the future earnings of the company by about 1.3%, which just further increases the rate of future compounding.