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Jakarta, CNBC Indonesia – These months have been a difficult time for investors on Facebook.
Shares of the world's largest social network have fallen nearly 40% since their highest level reached July 25, even after bounce moderate on Monday (26/11/2018).
The company has been confronted with a series of criticisms related to the numerous manipulations carried out on the platform to spread false information and to criticisms concerning an inadequate and controversial leadership. New York Times in a long report of investigation earlier this month.
Facebook's market capitalization of $ 200 billion (Rs.2898 billion), when its share price reached the highest level, was again partially reduced. This is caused by the sale or to sell in technology stocks, which have fallen since August because of worries about slowing global economic growth and the threat of President Trump's trade war.
However, the decline in Facebook shares began well before that and its stocks performed poorly under the Nasdaq and other tech giants this year, reported CNBC International.
The problem for Facebook is now to find a way out.
Facebook's business model, which relies on a growing number of users sharing more information and allowing advertisers to continue paying to reach them, is starting to look fragile as trust on the social media network deteriorates.
But at the top of the company, CEO Mark Zuckerberg (34) has such ownership and control that the board and shareholders have a very limited ability to use any influence.
"Facebook has lost the confidence of its constituents and, to get it back, they have to do something important," said Daniel Newman, senior badyst at Futurum Research, which focuses on digital technology.
"Their PR teams have been up here empty and inadequate and, with stagnant growth, they have to start changing their minds now."
 Photo: Edward Ricardo |
One thing we are talking about now is that Zuckerberg has stepped down as president, thus separating the role of CEO and President. It will be a dramatic step.
Launch CNBC International, the board of directors of technology companies controlled by the founder is often headed by the CEO. Among them are Jeff Bezos of Amazon, Marc Benioff of Salesforce and Reed Hastings of Netflix, also director of Facebook.
But some investors said that it was enough for Zuckerberg to participate. In October, the treasurers of Illinois, Rhode Island and Pennsylvania and New York City supervisors, accompanied by a shareholder proposal from Trillium Asset Management, asked Facebook to separate the posts.
The proposal, which will be accessed at Facebook's next shareholders' meeting in 2019, cites Facebook's handling mistakes, including by ingesting Russia in the US election and the Cambridge scandal. Analytica involving data dissemination, depression and other mental health issues related to the use of services. and the possibility for advertisers to prevent certain minority groups from seeing advertisements.
Jonas Kron, executive vice president of Trillium, which holds about 53,000 shares on Facebook, said CNBC Last week, recent events "clearly showed the need for an independent president".
Zuckerberg 's dual role as CEO and chairman prevented Facebook' s board of directors from acting independently and providing oversight, Kron said. For example, he referred to the council's decision to issue a statement on Nov. 15, following the New York Times' story, claiming that he supported the two highest leaders, Zuckerberg and the director of the New York Times. operations, Sheryl Sandberg.
"The chair was occupied by Mark Zuckerberg and Sheryl," said Kron. "So, basically, Mark Zuckerberg and Sheryl Sandberg say they defend Mark Zuckerberg and Sheryl Sandberg."
Until now, Zuckerberg has rejected the proposal. Since designing a Facebook dormitory at Harvard in 2004, Zuckerberg has retained full control of the company and still has 60% of the distribution of votes, which allows him to control his destiny.
"I do not think it makes sense at the moment," Zuckerberg said. CNN last week, when asked if he would consider giving up the role of president.
In the interview CNNZuckerberg also congratulated Sandberg and said he hoped the two would continue to work together for several more years. This happened shortly after the Wall Street Journal report that Zuckerberg accused Sandberg and his team of many problems that affected the company.
A spokesman for Facebook declined to comment on this issue.
On the financial side, Facebook has shown signs of tension. Last month, the company announced disappointing daily results and a number of active users. She also informed investors that the costs would increase by 40% to 50% next year.
This is a new area for Facebook. The company held a dominant position in social networks and mobile advertising after the company solved privacy issues. Although this information may have harmed the company's image, users are not forced to leave the site or marketers have turned off their expenses.
 Photo: Infographic / Actions of the technological society "FAANG" Anjlok / Aristya Rahadian Krisabella |
However, badysts are not sure that Facebook can keep its grip this time around.
Scott Devitt of Stifel Nicolaus on Monday lowered the target price of Facebook shares to 150 USD, from 186 USD to 150 USD. This decision makes him the last badyst to have expressed his skepticism about society.
On November 19, Brian Wieser of Pivotal Research reiterated the title "Sell" for Facebook shares and valued his shares at $ 125 per share, noting that "advertisers' concerns about Facebook's morality are real."
James Brumley, an badyst at InvestorPlace, said that a series of unwanted issues existed when Facebook's core products had lost their relevance.
"Few people are still very interested in Facebook, and they are really tired of the same job, political wrangling, many artificial posts and what looks like an increasingly aggressive advertising effort," he said. Brumley.
"Ask the average Facebook user how he feels about the site, and the answer is all the way down," hey. "It's not like d & rsquo; Usual, "he explained.
Zuckerberg has a lot to improve.
It needs users who believe that the messages they see are real and that their data is safe. At the same time, it must send fresh products so that users stay involved and pave the way for future growth.
He must also be able to recruit and retain talent in the Bay Area, where the competition for engineers is stronger than ever before.
But for investors, who have seen their property values collapse lately, the number one problem now is that the Zuckeberg is not accountable to anyone.
"No one can be a place where Zuckerberg denounces or is heard to make sure that he does not make any stupid decisions," said Julie Goodridge, CEO of Northstar Asset Management, which holds 23,500 shares of Facebook. . "Nothing checks and balances."
(Prm)
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