FB Stock: Is Mark Zuckerberg’s Image a Problem for Facebook Inc?

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Facebook Inc (FB) stock is doing just fine nowadays. That tends to happen when your company operates a number of services (Facebook itself, WhatsApp, Facebook Messenger) with user counts approaching or well into the billions.

FB Stock: Is Mark Zuckerberg's Image a Problem for Facebook Inc?

But Facebook’s popularity is part of what makes it such a huge problem, according to The Pirate Bay co-founder Peter Sunde. It holds massive cultural sway, and CEO Mark Zuckerberg, he says, is essentially the unelected dictator of “the biggest nation in the world.”

Sunde’s comments, made late last week, are getting headlines. And if his proposals end up piquing the interest of the right people, FB stock owners certainly won’t be happy.

Sunde: FB Should Be Censored

The co-founder of The Pirate Bay says that Zuckerberg’s power is made apparent when world leaders have to lobby the 32-year-old tech titan. German Chancellor Angela Merkel chastised Zuck about anti-immigration posts on his site and the effects they were having on Europe.

The next proposition is where FB stock owners may find themselves cringing:

“If politicians were a little bit more hard-core and actually believe in this they would be able to fix it. If we say Facebook doesn’t agree with our rules in our country, we are going to stop Facebook in our country. We censor a lot of things, why not censor Facebook?”

This isn’t just some harebrained suggestion from a geeky tech leader that’s jealous over Zuckerberg’s success. There was recently uproar on Capitol Hill after a Gizmodo report cited former FB insiders claiming that the social network intentionally suppressed conservative news from its “trending stories,” a news-dedicated portion of the site that’s wielding more and more influence on the collective unconscious.

Facebook denied suppressing conservative viewpoints, although it acknowledges the use of humans in its trending practices.

Growing Chorus of Anti-Facebook Sentiment

While FB stock owners would normally be celebrating the company’s unprecedented power, the fact that it’s beginning to spark cries of outrage is objectively not good for the company.

If Europe actually takes Sunde’s advice, and Facebook is forced to censor itself or face a ban, well, a ban wouldn’t be great for Facebook’s user numbers.

Censorship at the often capricious and ill-motivated hands of politicians is almost equally unattractive for FB stock owners.

First of all, if certain stories are trending on Facebook, it’s probably because users are engaging with those stories, which means they’re both spending more time on Facebook’s site and giving Facebook more data about what users like and react to.

That means more ad impressions and more targeted advertising. Those are major lost opportunities if censorship rears its head.

Second, if FB buckles to political demands in Europe, expect GOP legislators in the U.S. to cry foul and point to that as evidence of tomfoolery and a willingness to manipulate the user experience.

The biggest threat to FB stock, however, is the specter of antitrust legislation that Sunde’s attack brings. He claims it’s not reasonable in today’s online world to expect a socially plugged-in person to not be on Facebook, where more and more communication between friends and family is occurring.

In fact, Germany recently opened an antitrust investigation into Facebook’s privacy terms and conditions: Regulators allege the terms and conditions are unclear, and that fact, combined with its market dominance, means it could be running afoul of competition law.

For now, FB stock owners don’t have much to worry about with the stock still sitting near all-time highs due to its exemplary financial performance and growth prospects. And while Sunde himself calling Zuckerberg a dictator doesn’t spell the imminent collapse of share prices, it’s yet another voice in a chorus of high-profile critics.

If Zuck doesn’t go out of his way to proactively deal with these issues, they could come back around to deal with him — and anyone else who’s a Facebook shareholder — down the road.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow John on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/fb-stock-mark-zuckerberg-image-problem-facebook/.

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