I see that there's a certain degree of enthusiasm for Facebook, no doubt because its share price has plunged close to 20% and there's probably the assumption that its price must go up, appreciably, from here.
Well, ... I think maybe one has to consider what is the "core" business of Facebook and from whence does it accumulate its revenue.
Facebook is probably seen as primarily a "social media" site. And on the surface that's a fair assumption. BUT, in actual fact, Facebook is more of a Data Mining site and it gathers that data from all those who "socialize" on its site and then Facebook sells that data to third parties.
And it was doing very well at that UNTIL the recent scandal and exposure it received as a result of the "Cambridge Analytica" saga which laid Facebook's true intentions bare to the public and has resulted in serious concerns about its security and integrity with regard to its faithful followers.
This also resulted in Zuckerberg having to appear before American and UK scrutiny and come up with answers and explanations. Due to the fact that the Americans did NOT question him Under Oath (possibly because of his very generous "campaign contributions"), it is said that some of his answers may not have been entirely "truthful".
That "breach of trust" has caused a major flight of many of Facebook's followers and has contributed to its recent drastic fall in share price.
Facebook tried to counter this price decline by saying something along the lines of .... "Well, we did gain users. Not as many as we would have liked, but we are still growing as a site".
BUT, it's not just about gaining users, it's about the INTERACTION BETWEEN THE USERS. And if they are not INTERACTING with your content then the site is not doing so well. It's about Time Usage and the amount of Time they spend on the site. Time is "Currency" on social media.
So now the question has to be asked, can Facebook get back to its former Revenue earning capabilities if it has shown to have compromised the security of its followers and has very likely abused their trust in this company causing them to go elsewhere for their "social media" interactions ??
Because if it can't, then why should its share price go back up by ~20% ?
Here's some interesting insights into the likes of Facebook by someone we call the "hippy-looking-kid" ... don't be fooled by his "appearance" ....
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