In 2020, we can only see the power, even the hegemony that Facebook exercises over other social networks. Strictly speaking, the platform has become essential for both individuals and professionals. But is this reason enough to buy its stock in 2020? Even if the profits and the turnover of the company would be in clear increase, can one allow to think the same thing of the evolution of its stock market share? We explain what you need to know to make the right decision.

Understanding the Cambridge Analytica Scandal

As much as Twitter, Facebook has been a social network listed on the stock exchange since May 18, 2012. That said, it should be noted that its IPO, carried out with San Marino Email List great fanfare, did not at all have the desired effect insofar as its shares began to drop right after.

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This tumble was explained by an overestimation of the financial value of the company, a mistake that cost it billions of dollars in stock market valuation. If these events happened a few years ago, there are others that we will have to take into account to know whether in 2020 we should buy the Facebook share on the stock market. These include the Cambridge Analytica case that erupted in 2018 in the United States.

While all was well for the company, 2016 is going to prove to be a year in which the company made a bad choice. Indeed, during the American presidential elections which brought Donald Trump to the head of the White House, it turned out that Facebook played an important role in influencing public opinion. For explanation, The CEO, Mark Zuckerberg and his Facebook network made use of the personal data of 50 million American users of the platform, they were targeted in order to make them believe in fake news through a third party Analytica.

The Evolution of Facebook’s Action

For your information, you should know that even if the value of Facebook’s share fell as soon as it went public, it was able to recover in the days that followed. So, from $ 218 per share, the value lost over 40% of its price in just 6 months, before rising to $ 171. It should also be noted that during this period which extends from 2012 to December 2018 (5 years), Facebook’s turnover has continued to increase, while the value of its shares has remained below the price at which they entered the stock market.

It was in 2018, when the Cambridge Analytica scandal was revealed to the general public that the company’s stock value was going to hit hard times. Over the next 5 days it loses just 13% of its value, which equated to a loss of $ 75 billion in market cap. That said, against all odds, in the days that followed, Facebook’s stock rallied, reaching a value of $ 218. Everything gave the impression that Cambridge Analytica was not really to be feared. But the events that took place afterwards continue to cast a shadow over society.

The Question of Profitability

From 2012 to 2019, Facebook’s stock market saw a total gain of around 300%, from $ 42, its lowest rate, to $ 165. Between 2018 and 2019, that is, since the scandal and the end of last year, the share’s value has gained 19%, rising to just over $ 170. This is to say that the curve is experiencing an ascending dynamic, which is not necessarily the case with other social networks.

But it should be noted that we are there on the stock market, so that we should not completely rely on past results to determine what will happen in the future. Planning is the key word in this area.

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