Facebook Inc (FB)’s Oculus Rift Virtual Headset May Add Real Value to Firm

Facebook Inc (FB) Oculus Rift

Facebook Inc stock gained following a statement by Piper Jaffray analyst Gene Munster, who said the firm could price Oculus Rift at $450, which will help boost the firms valuation. This pushed up the shares by 0.5% after which they closed at $102.73 on Tuesday.

Oculus VR to benefit Facebook

Facebook Inc , which acquired VR startup Oculus VR for $2bn last year, began accepting orders for the VR headset – Oculus Rift – today, January 6. Analysts expect pre-orders to sold-out quickly, and Oculus will sell a few hundred thousand units in 2016. Munster expects the launch date of the device to fall sometime in March, in-line with the firm’s own guidance.  However, a representative at CES said it will more likely be Q2 before the headset ships.

Facebook Inc (NASDAQ:FB) Oculus Headset
Oculus Headset on display at CES 2016

Facebook has not made any announcement regarding the exact release date or the price tag for the VR headset. Facebook’s profitability will not be affected anyhow by Oculus in the next few years, instead the device should be positive to FB’s multiple, said Munster.

Piper Jaffray has an ‘Overweight’ rating on the stock with a price target of $155. “The availability of Oculus Rift should mark a turning point in investor optimism on the VR theme, notable that VR is the start of a new computing paradigm,” said Munster.

Oculus Touch controllers delayed

Facebook Inc announced via its Oculus blog that its Oculus Touch controllers will get delayed to the second half of 2016. The firm said it will begin shipping its Oculus Rift consumer edition gaming headset on time i.e. in the Q1, and soon it will launch the pre-orders as well.

“On Touch hardware, we’ve made significant advances in ergonomics, and we’re implementing many changes that make Touch even more comfortable, reliable, and natural,” the firm said in the blog post, adding it is also implementing changes that improve hand pose recognition.

Clifton Dawson – Greenlight VR CEO – believes the delay will eventually benefit the customers as it will give more time to the firm to make Touch more comfortable for interactions. “The delays also allow Oculus more time for developers to begin testing and creating experiences with them,” Dawson said.

Facebook shares closed today up 0.23% at $102.97. In 2015, the stock gained almost 35% while in the last one-month, it lost over 3%.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.


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