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NEW YORK – Facebook investors are scared. They should not.
Stocks dropped to 19% on Thursday after the company warned that its earnings growth will slow while focusing more on users' privacy. And that's exactly what the company should do after the Cambridge Analytica debacle.
The social network also benefits from its strength to invest more in its Stories tool, to share videos and photos, not only on Facebook but also on Instagram, WhatsApp and Messenger, belonging to Facebook.
Lee: Facebook takes the group part to the network with Watch Party .
Facebook shares closed on Wednesday at a historic point, just before the company surprised the company. investors with their announcement: a drop of more than 23%.
BTIG analyst Richard Greenfield wrote in a report Thursday that media directors "should not be happy, they should be scared, very scared."
"Facebook chooses to generate less than 39, money actively, minimize short-term monetization to increase participation to even higher levels to capture even more time and attention from its 2.5 million monthly users. " ] We recommend: Facebook increases confidentiality, but its actions collapse
Translation: Facebook can afford to make decisions that can harm you now because they should help you in the future. He has also worked for Amazon and Google.
Mizuho's technology analyst, James Lee, said the change of focus of the news feed to stories "creates a short-term risk," but that "it does not matter." is not a structural problem.
Investors should also not be surprised by Facebook's decision to absorb short-term pain in anticipation of a huge long-term gain. ho at other times, and the decisions have paid off.
In 2014, Lee noted that investors were concerned about Facebook's ability to move from an office platform primarily to a mobile platform. And in 2016, investors wondered about the increase in their video investments.
Lee: The "Likes" are over for Facebook: it's collapsing on Wall Street .
In both cases, Facebook was the last to laugh.
Despite Thursday's sharp decline, inventories are 400% higher than in the last five years. This beats Apple and Google.
The expanded market also dismissed fears on Facebook. The company is one of the largest companies in the world, but investors seemed to think that the short-term challenges were limited to it, and perhaps to other social networking companies [19659021] The Dow Jones rose slightly and the S & P 500 II maintained its level as investors celebrated the positive trade agreements between President Donald Trump and European Commission President Jean-Claude Juncker.
Lee: Facebook trains Mexican entrepreneurs and entrepreneurs . [19659002] Even the Nasdaq has not fallen as much: less than 1%. And the so-called FANG shares have not been badly affected.
The owner of Amazon and Google, Alphabet, which recorded spectacular gains earlier this week, has lost only 1%. Facebook rivals on social networks Twitter and Snapchat have only fallen by 3%.
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