Facebook (Facebook Stock Quote, Chart, News NASDAQ:FB) is getting a lot of attention these days seemingly for all the wrong reasons.
Lawmakers in the United States have taken to grilling the social media giant over its lack of digital responsibility.
But is Facebook really the evil empire it’s made out to be?
Not if you ask the billions of people who continue to use its many platforms, says portfolio manager Gordon Reid, who advises that the stock is likely to take off.
Representatives from Facebook, Google and Twitter were questioned in Senate hearings on Wednesday about their actions to combat harmful online content, with Congress members from both Democratic and Republican camps calling for more concerted effort from the big tech companies to police their platforms.
In a hearing entitled “Mass Violence, Extremism and Digital Responsibility“, lawmakers pointed to events such as the mass shooting in Christchurch, New Zealand, where users were able to livestream the incident on Facebook, with Twitter and Alphabet’s Youtube also responsible for the spread of the video.
The Senate hearing comes as Facebook takes on more intense scrutiny over issues such as corporate governance, where CEO Mark Zuckerberg has been criticized as an autocrat, and the company’s newly minted digital currency, Libra, which has drawn fire for its potential impact on national economies and conflict with anti-money laundering laws.
All of which is to say that Facebook’s image has been taking a beating of late, making now a good time to buy the stock, says Reid of Goodreid Investment Counsel, who spoke to BNN Bloomberg on Wednesday.
Good time to jump into Facebook stock…
“I think that the privacy issues are keeping a lid on price to a point, so if you’re interested in this, now is probably the time to jump in,” says Reid, president and CEO of Goodreid.
“I know that there are a lot of people out there who think that it’s singularly Facebook who is the evil empire or Alphabet who is the evil empire and that they’re stealing information or they’re not policing their own content properly. But in the end, this is what we’ve asked for as a society —we’ve asked for artificial intelligence, ease of access, linkage of what we like to what we’re shown,” he said.
Reid points to the fact that Facebook has more than 2.5 billion active monthly users, enough to show not only that there is a desire among the populace for what Facebook has to offer but that the company as a whole is likely on the right track.
“The more that people say that they’re the evil empire, the more average monthly users they have. Obviously, what we’re being fed by mostly the popular press, the liberal press, as, you know, this is all evil, isn’t being adopted by the population where some people think it’s evil but more people think it’s not,” Reid says.
“The end result is that Facebook is not going away, it’s just morphing into something different and that can be a very profitable thing for investors and still satisfy regulators along the way,” he said.
“Look at what Microsoft went through a couple of decades ago. Microsoft lily white now, it gets no problems,” he said.
Facebook stock has done an excellent job in 2019 of clawing its way back, if not to the all-time highs of last summer than at least in that neighbourhood. FB famously dropped like a stone last summer on weak quarterly growth projections but so far this year the stock is up 45 per cent.