These talks of probes and investigations are troubling, as it’s pretty much guaranteed that FB has leaked all sorts of private information, and just didn’t tell anyone. If FB stock goes down further, it will take a lot of the tech industry with it.
Still not enough to make crooked Democrats refuse FB donations though, amiright??
I don’t think the vast majority of facebook’s users will care enough to change their habits based on it. I think the likely outcome is a couple more resignations, promises about information being more safeguarded in the future, but I don’t get the impression this will really change much fundamentally. It’s stupid to think that every company you give any piece of information on yourself to (or which they can access, i.e. palantir) isn’t selling and exploiting it to the max though.
Its funny to me that obama was well known for having used facebook data and similar things in the past for micro targeting, as did Hillary. People are just losing their shit because it was trump and because he did it better (CA has talked about doing some much sketchier stuff but I think that the most relevant thing here they did was their use of facebook data).
buying opp! this is just a shakedown by the government! They just want to "regulate"tech more to justify higher taxes. i dont think most people care if people know what they like.
also fuck europe. those money hungry whores. that digital tax is shady af! if europe does this. we should tax the shit out of their auto industry,
i’ll drop another 10k at 145.
Agree with Birdman, like most developing bubble sort of societal risks (like home lending leading up to the crisis) people won’t care until things have already blown up. The crazy part is this isn’t just about FB, it’s all of tech which is basically an unregulated wild west. People just download apps and sign user agreements and data is pulled from mic’s, cameras, keystrokes, photo albums, location and contacts by fly by night operations and we trust that it isn’t captured and then transferred outside the organization. Such is life.
I’m not necessarily saying that users will leave Facebook in large quantities, although usage of such services is highly dependent ont he company’s reputation. The issue is when the government forces information sensitive companies like Facebook to adopt a lot of usage controls, extra agreements and disclosures, and regulatory processes when expanding. What if the government creates an “information regulator” division that makes life extremely difficult for companies like Facebook, just like CFTC, SEC, etc. regulate banks? That’s the main concern that I think is reflected in Facebook’s stock price. The market obviously does not think 15% of users will leave Facebook on the back of this recent issue.
Idk if its a buying opp, its already a half trillion dollar company.
I agree with you about regulation being a key risk, but going back to the housing bubble phenomenon, despite it being an acknowledged issue I think lobbyists and political dysfunction will win the day and ensure any regulation comes after the fact. Additionally, expect tech (with its many vocal media channels and willing audience) to spin any intervention as hurting the spirit of innovation given data restrictions and higher costs.
generating 20b in income.growing in excess of 20%/year. with about 50% margins. theres a reason why
A ton of regulation came through after the housing crisis - just to a different industry. It’s generally a matter of public opinion. Plus, politicians love to create new task forces and committees to entrench their purpose. Look at CFPB, for instance. I’m not saying this will happen with certainty, but if regulatory risks increase in large tech companies just from a probabilistic perspective, then that will still affect valuations.
Plus, someone in some industry is going to get a whipping from Congress at any given time. Politicians benefit from painting someone as a bad guy. The more Facebook gets attention, the worse it is for them. People are already talking about Senate hearings for large tech company CEOs.
This thread reads like summer 2007.
I failed to articulate another thing that I think is important. Whenever compliance burden increases, it impacts a company’s ability to innovate and rapidly deploy new processes and services. For tech companies whose valuations are heavily reliant on growth projections, this seems like it would matter a lot.
Nah that would be an incumbent’s dream. See finance. They’re trying to go by their playbook.
First bold: Yeah but my point is that regulation will only come after a true crisis and we aren’t there yet. Forward thinking is simply not one of America’s strong suits.
Second bold: In theory yes and it would be justifiable, but weighted against broader sector themes I think it will get pushed aside and there are too many narrow minded investment dollars in that space to properly price in a tail risk.
Basically I think that in theory I agree with you which was what the content of my first post was saying, I just don’t think the catalysts are anywhere near that point of critical mass yet. I’ve got a friend that works on the L/S equity side for Citadel and he’s been beating the concept / discipline of properly identifying catalysts into me recently. So its either working or I’m still not getting it but I just think this is a way to early call and I also think that when the right catalyst comes it will be “way to late” (as in the housing crisis came long after society recognized the signs and should have altered course) and in a very unpredictable manner. But if we’re putting dollars to work as an industrial / basics analyst that has nothing to do with tech, my armchair opinion is this is a dip you buy and we are way to early to trade on this risk.
lol thats a good point. the regulations may hurt far more than the tax after all. fb should just pay them stfu money.
I made the point that this will be spun by lobbyists and combined with political dysfunction to prevent passage:
Ok, but that doesn’t mean your point is correct, or that the risk of regulation has not increased.
On the one hand, I am aware that tech companies need to innovate to grow.
On the other hand, I have no idea what facebook would do to innovate. I know that they do something like 9 psychological/advertising experiments on any given user at any given time, but I have no idea what those would entail or how those would translate into more revenue. Increased time spent on facebook, presumably.
What I personally find interesting is that there are something like 40k data mining companies in the US and presumably a lot are using facebook. Makes you wonder who knows what about you.
but i think its absolutely bat shit silly to equate the knowledge of your likes, to something where a bank is leveraging their books to generate profits that may end in their clients/investors losing money.
they are an ad company. all they are doing is getting people to buy more shit that they prolly like and need.
I think the bigger issue is FB has likely already peaked and is in secular decline (see: www.reddit.com/r/oldpeoplefacebook). As mentioned above by someone, either FB needs to innovate to stay fresh or keep buying newer, cooler platforms. I don’t have much faith in FB’s ability to do the former and the latter isn’t sustainable long-term. Throw these regulatory concerns on top of it all…
Don’t have the balls to short it, but I certainly wouldn’t consider it as an investment.
Which I’ve also addressed.