How bad will things get for Facebook (NASDAQ:FB)?
That’s the question investors and analysts are trying to answer coming off a very bad week for the social network. After a series of articles in The Wall Street Journal dubbed “The Facebook Files” detailed how the company encourages conflict and discord for it own profits, Facebook was then raked over the coals in a televised interview with Frances Haugen, a former product manager within the company turned whistleblower, that was broadcast on 60 Minutes.
In the TV interview and subsequent appearance before a Senate Committee on Capital Hill, Haugen accused Facebook of putting profits ahead of public safety and said the company purposely encourages anger and conflict among users of the social media site as a means of keeping people engaged. To top it off, Haugen also filed multiple complaints about Facebook with the U.S. Securities and Exchange Commission (SEC) claiming that the company “mislead investors.” Amid it all, Facebook also endured one of the worst site crashes in the company’s history.
The public thrashing pushed FB stock down 5% over the past week, bringing its decline over the last month to 13%. At $328.18 per share, the company’s share price is now up only 5% over the past six months. With Congress seeming more determined than ever to bring in regulations to reign in Facebook and other social media giants, many people are wondering what the future holds for the company that was started by Mark Zuckerberg and a handful of friends out of a Harvard dorm room back in 2004?
An Advertising Juggernaut
FB Stock Can Weather The Storm
While there’s no question that Facebook has had a tough go of it over the past week, there’s every indication that the company can weather the storm and its stock can continue trending higher over the long-term. In addition to its marquee social media site, Facebook also owns other profitable brands such as Instagram and What’s App and has had success with its Oculus virtual reality headset. Add in the robust advertising spending and big profits and it becomes apparent that Facebook still has plenty of upside ahead of it.
While antitrust actions in Washington, D.C. remain an issue of concern, FB stock is likely resilient enough to continue providing shareholders with gains. The median price target on Facebook stock is currently $425.00 a share, suggesting a 30% increase from current levels. The high price target on the shares is $500. Given the underlying strength of its business, increasingly diverse operations, and massive user base, Facebook stock remains a buy.
Disclosure: On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.