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Facebook Inc (FB) Stock and the Trials of Mark Zuckerberg

Facebook's cloud and ad network make it a long-term play

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One month ago, I took a close look at Facebook Inc (NASDAQ:FB) stock and asked readers whether the stock had finally topped out.

Facebook Inc (FB) Stock and the Trials of Mark Zuckerberg
Source: ©iStock.com/FLDphotos

Since then, it seems to have done just that — in the near term, anyway. FB stock has drifted sideways in a narrow range, from a Sept. 25 low below $163 per share to a recent high of over $174 per share. It opened for trade today at $172.61 per share.

The public image of the company has taken a decided turn for the worse. The fact that it let Russia influence the last election with ads seems a given. Formerly hands-off governments are taking a serious look at content regulation. Facebook Live, its video streaming service, looks like a fail as a marketing engine.

CEO and founder Mark Zuckerberg is King of all Media at an age (33) when his peers haven’t yet paid off their student loans.

It’s good to be the king… except when the peasants come with pitchforks.

Going for the Crown

The turning point for the company, and perhaps for Silicon Valley itself, was last month’s cancellation of a FB stock split meant to maintain Zuckerberg’s control,  as he prepares to start donating the world’s fifth-largest fortune to good works.

The cancellation was a shock, given that companies from Alphabet Inc. (NASDAQ:GOOG,GOOGL) to Under Armour Inc. (NYSE:UAA) had made similar moves without complaint. Since then, the knives have come out, as ably described by our James Brumley.

Insiders are now selling because Facebook has failed to address the issue I identified in August — the two-edged sword of its political power.

The halo around Zuckerberg has become a devil’s tail at his back and he seems deaf to it, evidenced by his ill-advised “virtual reality tour” of Puerto Rico, for which he was forced to apologize. The “tour” was meant to boost the Oculus Rift VR headset, which is also looking like a failure.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/10/facebook-inc-fb-stock-trials/.

©2017 InvestorPlace Media, LLC