Buy or Sell: Facebook Inc (FB) Is Getting Zuckerpunched
It was already a tough mon… err… year for Facebook Inc’s (NASDAQ: FB) CEO Mark Zuckerberg.
Then, this happened:
“Facebook sinks after admitting it was hacked (FB)” – Market Insider
According to media sources (and the company) around 50 million users were hacked. The company admitted the “breach” late last week.
A week earlier:
“Facebook stock faces ‘meaningful pressure’ after Instagram co-founders jump ship”
For those unaware, Facebook owns Facebook. It also owns Instagram. And WhatsApp. And Messenger. And Oculus.
But the bad non-fake news didn’t end there…
Earlier in 2018 Facebook shares were hard hit by scandals. Zuckerberg fronted Congress over data privacy.
Oh, and then there was that US Presidential election thing-o. The one where they sort-of knew kinda that Russia was doing something or other.
Facebook Share Price
Source: Google Finance.
Before that, WhatsApp founder, Brian Acton, resigned from the company over differences in Zuck’s strategy to advertise on the booming message platform.
“At the end of the day, I sold my company,” Acton (now a billionaire) told Forbes.“I sold my users’ privacy to a larger benefit. I made a choice and a compromise. And I live with that every day.”
The Most Important Question
Anyone — like me — who is eying off Facebook stock for an investment must ask themselves:
“Is virtual privacy a reality?”
Let me put it another way: do users really care about their privacy enough to #deletefacebook, #deletewhatsapp and #deleteinstagram for good?
Most of my friends don’t even know WhatsApp and Instagram are owned by the same company!
Friend: “Owen, did you hear about the privacy stuff? You should delete Facebook and start using Instagram.”
(Picture me, looking like Dr Evil from Austin Powers)
But forget the doctor, I’ll be even more Frank:
Of course, there’s a lot more to a successful investment than a few pictures on a screen. #technicalanalysis
Fortunately, Investor Club readers need not take my word for it…
Fresh from the privacy and Cambridge Analytica scandal, Facebook COO Sheryl Sandberg told investors in July: “We have 400 million people sharing with Instagram Stories, 450 million with WhatsApp status; Facebook is newer, but we’re seeing good progress there.”
Facebook had 1.47 billion daily users on average for June 2018. That figure was up 11% year over year. Advertising revenue was up 42%.
Buy, Hold Or Sell
Last week I listed Facebook Inc as one of the four ‘Stocks on my Radar’ — a Rask Invest monthly special update.
I concluded, “With $US40 billion of cash and virtually no debt, Facebook has a lot of optionality.”
It begs the question: Am I buying Facebook for the Rask Invest model portfolio?
Unfortunately, for legal reasons, I cannot offer my official investment ideas to Investor Club readers. However, it’s safe to say I’m currently doing a deep dive on the tech giant’s financials — and Rask Invest members receive my analysis first.
Cheers to our financial futures!
Disclaimer: This article contains general financial advice/information only. It should not be considered as personal financial advice or specific to you because it does not take into account your needs, goals or objectives. Consult with a licensed financial adviser before acting on the information.
Disclosure: Owen Raszkiewicz does not have a financial interest in any company mentioned in this article.