Homepage / Technology / Facebook shares fall from record as Wall Street grows wary of growing costs to combat 'false news'
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

Facebook shares fall from record as Wall Street grows wary of growing costs to combat 'false news'

Written by finanster
on November 2, 2017
Leave a comment

Wall Street largely gushed over Facebook’s comfortable earnings beat, but analysts are keeping a wary eye on the social network’s growing investments in security and content.

Shares of Facebook fell 0.5 percent in premarket trading Thursday, despite its much better-than-expected results Wednesday after the bell. The stock closed at a record Wednesday, up 59 percent for the year.

Analysts fear the controversy over the company’s role in Russia likely influencing the 2016 election is not just bad PR, but may actually impact the social media titan’s impeccable bottom line as it invests further in security to take itself out of the political cross hairs.

“With the backdrop of Facebook, Google, and Twitter in front of the Senate Intelligence Committee on Wednesday, and generally increasing discussion of regulatory scrutiny of mega-cap tech, Facebook and Mark Zuckerberg in particular placed heavy emphasis on security and the integrity of the Facebook platform” during the company’s post-earnings conference call, wrote JPMorgan analyst Doug Anmuth in a note to clients Thursday. “Importantly, Facebook will increase the number of people working on safety & security (both FTEs & contractors) from ~10k now to 20k over the next year.”

While Anmuth felt that the company’s efforts to curb fake news and hate speech on its platform would ultimately serve Facebook well, many analysts are concerned that increases in short-term spending may put pressure on attractive margins.

Facebook, Google and Twitter have all been testifying before Congress this week as lawmakers try to discover how each company allowed Russian influence and whether there needs to be more regulation of tech companies. And while each company has voiced interest in dealing with interference in social media internally, the possibility of regulation also weights on investor sentiment.

“Facebook’s efforts will come in many forms—increasing transparency of political and issue ads, removing problematic content such as false news and hate speech and bulking up review of ad content,” added Anmuth.

But Anmuth wasn’t the only analyst to comment on the company’s plans.

“The changes are particularly aimed at curbing misuse of the platform similar to what the Russian government perpetrated during the U.S. 2016 election,” wrote Macquarie’s Benjamin Schachter in a note to clients. “Facebook plans to raise the standards of transparency for political ads on the site, rolling out a tool to let users see all of the ads a page is currently running, and also an archive of political ads the advertiser has run in the past.”

Zuckerberg’s company indicated that operating expenditure will increase 45 to 60 percent as the company funnels more cash into security, video content, and augmented reality and artificial intelligence.

“We’re building – we’re doubling – in some cases more – our engineering teams focused on security,” said Facebook founder Mark Zuckerberg on Wednesday. “We’re building AI to go after more different areas of harmful content and finding fake accounts and other bad actors in the system. And I expect that all of these things will make our product better over the long term, but we will incur the expenses a lot sooner as we ramp up these efforts.”

To be sure, Facebook’s performance so far this year is nothing to complain about.

The company posted FX-neutral advertising revenue growth of 47 percent year over year thanks to ad pricing ramp, a “rare and impressive” feat according to Anmuth. Overseas growth in monthly active users — a key metric for Facebook — also looks promising to many analysts.

Shares have soared 59 percent this year, easily outpacing the S&P 500’s impressive 15 percent climb since January.

“FB remains our top large cap internet pick and we think that momentum in the name can continue through the end of the year,” wrote Jefferies analyst Brent Thill. “We see upside to average revenue per user, monthly active users, and Instagram.”

Several analysts highlighted photo-sharing app Instagram as a potential catalyst for Facebook and an area for increasing ad load.

Source: Tech CNBC
Facebook shares fall from record as Wall Street grows wary of growing costs to combat 'false news'

Comments are closed.