Social media giant Facebook (Facebook Stock Quote, Chart, News NASDAQ:FB) is certainly having its struggles during the COVID-19 crisis but investors should be ready to pick up the stock when it’s down, says Brian Acker of Acker Finley, who says that if Facebook drops below $140 per share, investors should be ready to pounce.
“Facebook is certainly a buy here,” said Acker, CEO and chief investment strategist with Acker Finley, speaking to BNN Bloomberg on Monday.
“If it got back to $135, $136 I would say that would be a big buy. [At Friday’s close of $156.79] I would be a buyer, but certainly anywhere around $135, $136 would be a great price for that,” Acker said.
Facebook’s share price took a beating like the rest of the market over the past month, losing a third of its value over that span, and while citizens in locked down countries worldwide are turning to the platform now more than ever, the company is nonetheless facing a more dire economic outlook as ad revenues fall off.
Last week, Facebook released an update on the company’s state of affairs during the COVID-19 crisis, saying that in many hard-hit countries, total messaging has climbed by half over the past month, while voice and video calling on popular Messenger and WhatsApp platforms have reportedly more than doubled over the same period.
Facebook feed and stories have also been more popular, but still the company was frank about the
decline in ad business.
“At the same time, our business is being adversely affected like so many others around the world,” a March 24 blog post said. “We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.”
Facebook’s revelation comes after Twitter recently withdrew its first quarter guidance, saying in terms similar to Facebook that while usage has been strong, revenue for the Q1 is going to be down, with an operating loss predicted.
“While the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility, the company expects Q1 revenue to be down slightly on a year-over-year basis,” Twitter said in a statement.
At the same time, Facebook has responded to the pandemic by pledging to donate $100 million to small businesses affected by the outbreak and another $100 million to support journalism, with the latter involving $25 million in grant funding and $75 million in additional marketing spend for news organizations.
The first round of grants from Facebook’s journalism project were announced last week, with 50 local news organizations in the US and Canada receiving funds.
“Through the COVID-19 Community Network grant program, direct funding is helping journalists cover important stories when we all need them most. We’re building on this work and will direct a portion of these funds to publishers most in need in the hardest hit countries,” Facebook said.