Facebook may face growing trouble in Washington but the company still enjoys a warm reception on Wall Street.
The company’s stock outperformed the shares of the other largest U.S. internet companies in the third quarter, as investors shrugged off negative headlines about extremist content, Russian-bought political ads and even a large intended share sale by CEO Mark Zuckerberg.
Facebook shares rose 13 percent between the opening bell on July 3 and the open of markets Friday morning.
That outpaced the performance of its social media and online ad rivals, Alphabet, Twitter and Snap, as well as those of online retailing giant Amazon.
During the quarter, Alphabet shares rose 5 percent, while Twitter’s fell 5 percent and Snap shares dropped 18 percent. Amazon shares were flat during the period.
The gains pushed Facebook’s market value to $490 billion as the company maintained its position as the fifth-most valuable U.S. technology firm.
The stock surge came even though Facebook faces a growing number of inquiries in Washington.
Committees in both houses of Congress and the Federal Election Commission are investigating how much fake news and propaganda on the social network influenced the 2016 Presidential election.
The company earlier this month said foreign groups spent $100,000 to buy targeted political ads, some of which promoted divisive issues, and said this week it turned the ads over to Congress and special prosecutor Robert Mueller.
Facebook executives will testify before the Senate Intelligence Committee at a Nov. 1 hearing, a person familiar with the situation told CNBC Thursday.
The controversy over foreign election meddling via Facebook ads came after ProPublica, a public interest journalism organization, reported it was able to buy advertisements targeted at racists on the site.
The company had previously come under pressure in Europe, where leaders charged it was not removing terrorist-related content fast enough.
To round out the bearish headlines, Zuckerberg said last Friday he will sell as many as 75 million shares of his holdings over the next 18 months.
Based on the latest stock price, those sales could put up to $12.6 billion worth of Facebook shares up for sale.
But all that wasn’t enough to dampen enthusiasm among Facebook bulls who are optimistic about the company’s expected sales and profit growth.
Indeed, profit expectations for Facebook are significantly higher than they were at the start of the quarter.
The company is now expected to post an annual profit of $5.33 per share this year, up from expectations of $4.85 per share three months ago. Facebook’s profit was $4.23 a share in 2016.
Third-quarter profit estimates have also gone up, to $1.27 a share from $1.15 three months ago.
Sales are seen rising 42 percent this year to $39.2 billion as Facebook benefits from a surge in digital advertising.
Source: Tech CNBC
Facebook investors shrugged off political issues and bad press in Q3