Anybody buying here in the low 160's?Naj, care to give us your strategy?HP
growth company at a value price now
LT-buyer at $160.
LT-buyer at $160.I'm inclined to agree, but there is a non trivial chance that this will cause enough long term damage to make a $160 price too high. A lot will depend on FB's response to this over the next month or two, and in the mean time there's a pretty good chance we'll see prices well south of $160 in the short term. Watching with interest...IMO Zuckerberg should lose the CEO job over this, and Sandberg (the supposed adult supervision) should probably be fired. It's that bad. At the very least, there should be serious repercussions for both. We'll see if the Board is up to it, but I'm not holding my breath. 2018 for FB is going to be a lot like 2017 for Uber.
IMO Zuckerberg should lose the CEO job over this, and Sandberg (the supposed adult supervision) should probably be fired. It's that bad. ??From what I read (not much) Cambridge "gained access to the information with full consent of the users who downloaded its app however the firm violated the social network platform's rules by sharing user date with 3rd parties." When FB became aware of this, they deleted and demanded all parties delete the records and data they got, but those parties lied and kept the data anyway.I'm also curious how Z will fire himself given his ownership stake??I am aware that traditional media have been up and arms over google, fb, twitter and all these folks destroying their business models (it seems that way, but maybe I'm uninformed?), and as usual the Europeans are freaking out cause that's what they do - and all these companies are natural targets (both for left and right), but what's the critical long-term issue here as you see it? Without the politics angle if that's ok. And what did Sandberg do in this situation - did you know something unique about her? Cramer suggested it now trades for 19x next year - if it falls a lot further, then...
p.s.I guess I'm jaded too by this happening so many times beforetech company or somebody else does somethinggets in the public eye - WAY in the public eye (even if it is their own creation)and then the news flutters awayand you get a fine at the worst and in few years nobody caresuntil the next crisis comeswas speaking to a friend about this and he pointed out that the govt didn't even kill the ciggie makers despite trying very hard to do sofor myself, I remember the doom and gloom about SP and Moody's and nothing ever came to pass. long-term at leastbut I'm clearly no expertbut I can't recall any time when things like this were anything other than transitoryI mean, we just had a thingie with googlethat hit the stock and nobody cares anymoreit just seems a natural thing that when a dominant biz becomes dominantthey get bad press from loads of placesso....am I wrong?
Like I said, I'm inclined to agree that there's a decent chance that FB at $160 is a winner. And if it were completely dependent on consumer behavior it would be a slam dunk. However, the EU is just itching for an excuse to take down an American tech company. And while the normal expectation is that a Democratic administration is a risk for big business, and Republican administrations are more friendly, I wouldn't be so sure this time. I think the long knives are out for Facebook. At the very least, their ability to make meaningful acquisitions is probably compromised in the near future, and there are other risks which need to be managed. So far, I see no indication that FB even recognizes the severity of the problem. I want to see some evidence that they have a handle on it. Re the possibility of Zuckerberg being removed as CEO, I agree that it's unlikely, Sandberg being fired slightly less so. However, there is a Board in place, and if there is sufficient backbone among them it is possible. I don't know if you ever read Larry Ellison's autobiography. If not I recommend it. In any event, there was a similar existential crisis facing ORCL at a relatively early point in their history. In his telling, even though he was the majority shareholder he was scared to death that the Board would remove him as CEO. I would be a lot more comfortable with FB at this point if I thought that Zuckerberg felt the same way.Keep in mind that FB knew in 2015 that their terms had been violated. They had the right to go in and do a full audit on both firms. Instead they asked them to please, kindly, delete the data and never do it again, without any follow up to verify that they had obeyed. Former FB employees are coming out and saying they had repeatedly warned FB of the risks in their policies for protecting customer data, and of the need to be more proactive. This is a problem that should have been solved a year or two ago, and had darn well better be solved now. Unfortunately, the solution can have an impact on future growth and, potentially, FB's liability for the behavior of their third parties - which is why it's been ignored for this long.Finally, given this pattern of behavior, can we be sure that this is the only cockroach in the kitchen? I'm willing to bet that there are other cases like this, and we'll see the drip, drip, drip of them coming out over the next few weeks or months. So I'm awaiting developments. Maybe I'll miss an opportunity as a result, but that's the way it goes.
thanks for your responsegot to admit, i am going to assume that FB will learn from this and do what they can to minimize bad press in the future (if that's even possible). However, from your note:*long knives are out for FB. ? Like, other than a fine?*I agree it is unlikely. ? I've never heard of such a thing unless the dude is a bad guy. I have no idea if this is a firing offense or a mistake by somebody. *Instead, they asked them to please...delete the data. I'm having a tough time understanding why this is not reasonable, but understand that others with an agenda could spin it a different way in today's climate.*Former FB employees are coming out...right, they are 'former' employees. It doesn't mean that much, right? *Unfortunately, the solution can have an impact....we don't know what the issue or change or impact or anything might be. Anything could have an impact - maybe most FB users might not care given there is no creditable alternative*other cases like this....maybe so. Certainly headline risk indeednobody has to own it thoughI sure hope it brings it down 10 or 20 or 30 more points if this is all there is...
MG Siegler has an interesting perspective on Facebook's current issues ...https://500ish.com/foot-in-mouthbook-c35a64cd9341Note: It's not a discussion of investment merits, rather Facebook overall. Investment-wise Facebook at current prices looks pretty good, as long as growth continues. And there's pretty good chances (IMO) that growth will continue.
We're not that much in disagreement, I'm just more inclined towards short term caution until I'm more comfortable that they understand the threat to their business and are better equipped to handle it. And while I'll leave the technicals to Naj, I don't think there's any need for a rush to buy today, or even this week. The one thing that FB (and potential FB investors) need to understand is that their handling of the Cambridge situation was a giant screw-up, and not just from a PR perspective. Specifically re*Instead, they asked them to please...delete the data. I'm having a tough time understanding why this is not reasonable, but understand that others with an agenda could spin it a different way in today's climate.This was not a reasonable response, it was a dereliction of responsibility to their users. User data was deliberately misappropriated by their customer. If you found out that someone with whom you had a business relationship took your client data and used it for marketing in ways you had specifically prohibited, would you politely ask them to delete it and take no other action, or would your response be stronger? FB had every right to do a full audit of both parties, but instead they decided to trust and not verify. Behavior like that erodes the trust of their users (and draws unwelcome attention from the government). Right now it's a few snowflakes, but if they don't show that they understand their need to change their processes in the future, it can grow into a big snowball.
Well, if you invert and FB does solve the problem - Zuck finally going to comment today it seems - then that should be wildly bullish on the stock.
If you found out that someone with whom you had a business relationship took your client data and used it for marketing in ways you had specifically prohibited, would you politely ask them to delete it and take no other action, or would your response be stronger? just to finish the string here, if I asked them this and they said they did, I wouldn't assume they were lying. I don't know too many people who would flat out lie to my face. Mislead perhaps, but not flat out lie. Hopefully a teaching moment, but I guess the more important point is to not allow a situation like this to develop at all - maybe this is like the fund companies who let people trade on their internal data, but that blew over too...This was not a reasonable response, it was a dereliction of responsibility to their users. User data was deliberately misappropriated by their customer. I guess this is where my ignorance shows - everything I read is that the person who created the app had user permission (boilerplate) to take the data. The person then provided it to other people. Agree, maybe they ought to not allow a creator of an app to take this data, but I'm not clear on that either. Hopefully they learn something here - but assigning nefarious motives or even competency issues based on snippets is really hard in the short-term. We ought to talk about GE's moves instead! :-) --I do think a lot of those things referenced in play's link as "horrible problems" are things where only a minor few felt any outrage, and that is always exaggerated based on one's perspective and reach. I hadn't heard of a number of things he mentioned...the average person far, far less. Most people don't know anything at all - they just use the FB...:-)
I guess this is where my ignorance shows - everything I read is that the person who created the app had user permission (boilerplate) to take the data. The person then provided it to other people. Agree, maybe they ought to not allow a creator of an app to take this data, but I'm not clear on that either. Hopefully they learn something here - but assigning nefarious motives or even competency issues based on snippets is really hard in the short-term.Okay, I promise this is my last post on this. I will admit that my opinion is somewhat skewed since I am an IT professional. Protection of user data for us is equivalent to fiduciary responsibility for a finance professional. And it's true that there are financial companies who have prospered mightily while being, shall we say, casual about their fiduciary responsibilities. However, before assuming that this is a geeky issue that won't have legs for the long term, it would be a good idea to read up on the EU GPDR going into effect at the end of May. This is serious stuff, and all of Silicon Valley is devoting extensive resources to preparing for it. Protection of user data is getting more and more attention from government, and the consequences of failure are getting more and more severe. Any investor in a company like FB or GOOG and the like needs to be concerned with the issues around this. I'm no expert on GPDR (HIPAA is more in my line) but I do believe that FB would have been in violation if this had taken place in Europe after May 25th.
it would be a good idea to read up on the EU GPDRCrap. It would also be a good idea to spell it correctly. *GDPR*Waiting for that editing capability...
I guess this is where my ignorance shows - everything I read is that the person who created the app had user permission (boilerplate) to take the data. The person then provided it to other people.I think it's more than that (to the point that the debate isn't necessarily about those folks that used the Facebook app.) It's more that Facebook's API allowed the app to mine the data of the friends of the people that used the app - a far greater set of people who hadn't provided explicit permission for this use. Which - at least in the EU - could be a huge violation of the various privacy laws. So, depending on where these folks reside (& where their friends reside) this could turn into a serious business issue. Now ... depending on how Facebook play this it could go away with minor (or major but affordable) fines, or turn into something that - at least in the EU - creates more or less serious restrictions on the business. Past history suggests Facebook is a bit 'tone deaf' but perhaps they get this response right. If not, there could be better pricing in the future for what so far has been a pretty good business (from a profitability perspective.) And Facebook's response (not really attempting to secure the data) suggest they've taken this pretty lightly so far.I do agree though that the consumer risk (people rapidly abandoning the platform en-mass) is very unlikely. And so across the medium term the Facebook business should be OK (with perhaps some good buying opportunities offered in between now & then - sort of like with VW & it's various legal issues.)
I should get up to speed on what really happened with FB/Cambridge but maybe the IT people here can help. It seems that FB developed a strategy, a few years ago, of monetizing data by actually getting 3rd parties like Cambridge to pay cash for using it. I presume this is data that is denominalized (maybe I assume wrong), and that there is no harm done to the individual FB user whose data is used. For instance, their telephone number of email address is not provided, and they can not be contacted by people like Cambridge.As far as I can tell, the outrage is based on the fact that this data is actually quite useful for someone who wants to know more about FB users' (i.e. almost everyone's) preferences, and whether for instance people that like kittens would be happy to have stronger gun laws, etc. Of course, this is/was uncontroversial when it is/was used to elect a nice guy like Obama, but becomes controversial when the same use helps elect someone we don't like.So if my initial take is correct, users are unlikely to be bothered because they have not been harmed in any way, but society as a whole may not like what happened and FB's reputation may take a bit of a hit that way (probably minor), and the more important question is whether governments take action and restrict this kind of data sharing (which would mean a minor hit to earnings and earnings potential), or fines (could be minor or could be major), or restrictions on future business combinations (buying future Instagrams, for instance). If this is all it is, I would say that the correction we have seen so far probably fully compensates a new investor for the clouds on the horizon. If there's something more nefarious that has happened, a prospective investor (such as myself) might be better to wait to see how the chips fall.Does anyone have any more detailed information on the nature of the data use that all this fuss is about?Thanks, DTB
This was a good summary of the issue in question I thought.https://lawfareblog.com/cambridge-analytica-facebook-debacle...no opinion on FB shares...
“What I would really like to do is find a way to get our policies set in a way that reflects the values of the community, so I am not the one making those decisions,” Zuckerberg said. “I feel fundamentally uncomfortable sitting here in California in an office making content policy decisions for people around the world.”If Matt Groenig wrote a Zuckerberg character we'd be like "okay, that's just a little too much of a caricature," let's maybe not have him standing in an Iowa pasture trying to make small talk with the cows and feed the farmer. I mean, Mark, if you suddenly realize that being the sole king of this monster that has become the hub connecting two billion of the earth's people is a little much for one guy in a lulu lemon hoodie, maybe let some friends in the cockpit with you. Zuckerberg only owns around 13% of Facebook. He has complete dominion over it not because he is CEO, but because he has 10-1 Supervoting stock. He obviously likes this supervoting stock, because just last year he tried to to issue zero-vote shares so he could give all his stock to charity and still be king of Facebook. He literally tried to include a clause that would allow him to serve in public office for two years and still maintain control of Facebook. That is some Berlusconi magic there. If you drop the Class B supervoting control, you can find out if shareholders really want you to be both Chairman and CEO and empower directors, or just drop one of those titles on your own. Suddenly you'll mostly just be another CEO trying to steer a behemoth like Tim Cook, subject to checks and balances and career risk.I'm not saying that sucking power from Zuck's fiefdom to shareholders and Directors will solve all or even most of its perception/actual problems. When a company gets incredibly important there is often going to be tension between their usual stakeholders and society at large. But it definitely won't hurt, and it should make that seat in California a lot less uncomfortable.
really?If you’re Facebook, expect lawsuits, public hearings, and general regulatory hell. Maybe, in the extreme, the end of the firm as we know it.just oncejust once just once in my lifedo I want to have a record of statements like this actually fact-checkedto see what the outcome really would beanybody look at Equifax lately?Target?My state of SChow many others had actual breaches?time will tell....but the author of that articlemakes a statement for effectnot of reason, but effectone thing I've learned in my lifepeople have agendasand are usually far less prescient than they realizeCourse, he does seem to have an interest in MSFT and Irelandwho read those with great interest?I don't know anything.but people exaggerateALL the timeeven people who should know bettercause they don't usually know anythinglife is more complicated than this
p.s.to be clear, I appreciated the linkI just think the conclusion is far-fetchedbecause he didn't provide any justification(you know, like with examples; as any 5th grader would know)my children make these off-hand pronouncements all the timeadults do tooas soon as it gets a whiff of politicslife is more complicated than this, perhaps...--on cnn.com they are running articles about from people who say to -get off FB-delete your account-break the companies up (this one from a competitor)-why blockchain is going to solve these issues (seriously - this one from a blockchain startup company CEO)but that was yesterday of coursenow they are back to porn stars, playboy models, and tweets...
well, he could always go into private equity and enjoy perks in the grave:http://boards.fool.com/new-schwarzman-compensation-33016660....One I particularly dislike is the provision that his estate can invest fee-free in Blackstone funds for 10 years after his death. What good does that do? At least a yearly salary/bonus is tied to him being there. I don't think he is going to be doing much for the firm 5 years after he dies.royalty class and all that
I'm not saying that sucking power from Zuck's fiefdom to shareholders and Directors will solve all or even most of its perception/actual problems. When a company gets incredibly important there is often going to be tension between their usual stakeholders and society at large. But it definitely won't hurt, and it should make that seat in California a lot less uncomfortable.In the absence of actual LAWS that mandate ethical behavior from Facebook, you think that a shareholder-value-driven management will forego profits in order to live up to some undefined ideal?A business where the CEO's bonus depends on incrementally increasing next year's profits is not conducive to voluntary ethical behavior if behaving ethically has large and immediate financial costs, which it certainly does in the case of Facebook.
A business where the CEO's bonus depends on incrementally increasing next year's profits is not conducive to voluntary ethical behavior if behaving ethically has large and immediate financial costs, which it certainly does in the case of Facebook.Zuck is already worth $50Bn or whatever. This is not a good example for your argument, even if I agree with it in general.
Zuck is already worth $50Bn or whatever. This is not a good example for your argument, even if I agree with it in general.</>I wasn't clear. I meant that replacing Zuck with a CEO who is accountable to shareholders won't help.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |