The Lemon Fool

OK, thanks to Stooz for the sector, so I thought I'd better post a post!

what could be more important to the tech sector than a discussion fo Facebook in the dock over privacy, and the implications to their revenue. We all know a lot of the tech sector has crazy valuations driven by jam-tomorrow dreams of infinite revenue produced by selling customers to advertisers to sell advertising to their customers, but now the privacy cat is out of the bag, it all looks like FB (and the rest) will be curtailed in how much user data they can use for advertising, which will surely hit their bottom line harder than anything.

And so, does this hint at the beginning of the end for insane calculations for companies that barely do anything? Google should be very concerned if they cannot harvest user data like FB has been doing, and assume other tech companies will also feel the pinch.

I do not have a facebook account nor do I hold the shares, never the less I do agree that some regulation is inevitable especially regarding privacy which may affect the share price.
However I am staggered over the ineptitude of the questions being put to Mark Zuckerberg by the House Committee in Washington.
Please tell me these people will not have much say in framing any laws that may be passed. I thought Trump was clueless but these people take the biscuit.

maximan wrote:I do not have a facebook account nor do I hold the shares, never the less I do agree that some regulation is inevitable especially regarding privacy which may affect the share price.
However I am staggered over the ineptitude of the questions being put to Mark Zuckerberg by the House Committee in Washington.
Please tell me these people will not have much say in framing any laws that may be passed. I thought Trump was clueless but these people take the biscuit.

Apparently half of congress was there to ask questions, and as a result they were just any old stuff they happened to read in the papers - no coherency in the questioning.

The 2nd day was better, i wonder if the people who knew what they were talking about were given the floor.

I am not a Facebook user but now I'm interested in their business because (to my surprise) Terry Smith recently bought FB into Fundsmith. Wanting to understand how/why they met his criteria of a "good" company, I was drawn to the work of Aswath Damodaran who teaches corporate finance and valuation.

He's recently blogged on the FANG stocks and on Tuesday on FB. You might find his Musing on Markets blog interesting - I certainly do - so I thought I'd post a link here: http://aswathdamodaran.blogspot.co.uk/

The good news is - if you agree with his analysis and valuation - that FB should recover. He gives them a value of about $181.

WCW

The logical solution is that facebook should face the same regulation as other publishers. What would you do to anyone else who had leaked personal data?

The 'merkins have a model for privacy to which some of them are looking: the EU GDPR. Haven't heard of them looking anywhere else. Many republicans have Small Government instincts that'll revolt against anything like GDPR, so the likeliest outcome is a weaker form of regulation (GDPR-lite) or possibly nothing at all until the next row.

The investment threat to FB isn't regulation, it's users packing up and leaving.