Why Are Facebook Shares All-Time Low?

Why are Facebook shares all-time low

It is perhaps not surprising that March and April 2018 saw Facebook shares at an all-time low. This was, after all, at the height (or possibly in the depths) of the scandal involving Cambridge Analytica, when that third party was accused of violating Facebook’s third-party privacy guidelines to release information that was, again allegedly, used in the successful campaign of Donald Trump for the American presidency. Whatever your opinion of President Trump and his policies and deportment in his great office, it is safe to say that he is one of the most controversial incumbents of the office ever and everything associated with his election is liable to intense study and excited and sometimes rash comment. Any company finding itself involved in the turmoil that makes up the present situation of American politics is bound to suffer as a consequence. It is probably no use for Facebook to explain that there was no data leakage, merely an infringement of their party use policy for the information which it, quite legally gathers. We could say that, eventually, the scandal will probably be forgotten when the next one comes along. However, a residual concern over the gathering of data is likely to remain; evidence for this can be seen in the plethora of websites springing up showing users how to remove or protect their personal data on Facebook. Such events cannot help but affect the performance of Facebook shares.

However, there may well be other factors in play which have led to the current low standing of Facebook shares. Some observers have stated that they were expecting much from Facebook for all of 2018, even before anyone had heard of Cambridge Analytica. Some analysts stated that the name of Facebook was coming close to being over-sold. They pointed to Facebook’s inability to keep up with its fellow ANG companies over the previous months and speculated that this meant the point of saturation had been reached. Others, however, were more sanguine about the future of Facebook shares, pointing out that scandals or otherwise, social media were not about to disappear in the immediate future, even if fears about future oversight might cause anxiety among potential customers and also third-party users of information. Such observers pointed out how unreasonable it was to ‘blame’ Facebook for the election of Donald Trump or for the Brexit vote. They were, however, prepared to acknowledge that younger social media users seemed to be attracted to other platforms, leaving Facebook for the ‘mum and dad’ market. This may well be a legitimate concern and the factors surrounding saturation and the continuing Cambridge Analytica scandal perhaps go some distance to explain why Facebook shares had reached an all-time low by April 2018, and why not a great deal was expected of them in the subsequent year. Still, the ‘mum and dad’ market is a legitimate and expanding area and it is almost certainly too early to write Facebook off yet.

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