- Jul 24, 2021
Mark Zuckerberg’s decision of prioritizing “meaningful social interactions” such as more posts from friends and family as opposed to “relevant content” like posts from work and business has led to a fall of 4% in Facebook shares. He says that his new year resolution to “fix Facebook” might cost him user-time on Facebook but would entrust a more valuable role to this form of social media.
Fall in shares has reached up to 6.1% ahead of the open market, following the closing just below the flatline on Thursday. As there will be a reduced number of posts from publishers and business. Investors are worried about Facebook’s hand in the fall of advertising figures.
Zuckerberg is still trying to control the damage from last year’s revelations that members of the Russian Federation might have had a hand in influencing the United States’ Presidential Election of 2016 by purchasing ads and perpetrating fake news stories. At first, he dissed these allegations soon after the conclusion of the elections but admitted that he was in the wrong, for around 120 million users had view ads bought by Russia.
As duly acknowledged by Facebook in the December of last year, studies have shown that following a particular usage trajectory of the site could deteriorate a user’s mental health. This was preceded by a comment made by the Former Executive Producer of Facebook who alleged that Facebook has started to “erode the social fabric of how society works.”
This new alteration of the algorithm in the Facebook News Feed to filter in more posts from family and friends and to restrict the infringement of business and work posts, is not new, as Zuckerberg announced this desire in a blog post pack, in June 2016.
David Ives, Head of Technology Research GBH has said that even though this change in the News Feed could be “worrisome in terms of an ad growth hiccup”, it would prove beneficial for in a long-term overview. He has raised his price target from $210 to $225, a whopping 20% upside from Thursday’s close. On the other hand, Suntrust Robinson has raised his price target on the stock on Friday from $215 to $240.
Wall Street does not seem concerned because most of Wall Street is bullish on Facebook’s outlook for 2018. According to Thomson Reuters, there are already 17 “strong buy” ratings and 25 “buy” rating. Just three analysts have either a “hold”, “sell” or a “strong sell” rating.