Market Overview

Pivotal's Brian Wieser Sees More Trouble Ahead For Facebook

Pivotal's Brian Wieser Sees More Trouble Ahead For Facebook
Related FB
Dan Nathan Sees Unusual Options Activity In Facebook
Tech Sector Earnings: Revenue Growth Widely Expected To Slow, Will Global Uncertainty Weigh?
Hot Options Report For End Of Day - Friday, Jan. 18 (TalkMarkets)

It’s been a difficult year for Facebook, Inc. (NASDAQ: FB) investors, and one analyst says two recent developments suggest Facebook isn’t nearly out of the woods just yet.

The Analyst

Pivotal Research Group analyst Brian Wieser reiterated his Sell rating and $140 price target for Facebook.

The Thesis

According to Wieser, a new lawsuit questioning the reliability of Facebook’s advertising metrics and allegations that Facebook turned a blind eye to its role in spreading false and hateful anti-Muslim information in Myanmar indicate Facebook management has made a series of critical mistakes that could impact the financial future of the company.

This week, a small business advertiser sued Facebook alleging the company misrepresented its Potential Reach to advertisers. The lawsuit includes testimony from anonymous former Facebook employees who claim Facebook’s Potential Reach statistic is “like a made-up PR number” and that Facebook doesn't care about the accuracy of the numbers it presents to advertisers.

At the same time, Facebook has recently come under fire for the role it allegedly played in spreading disinformation in Myanmar. Facebook’s Free Basics initiative is responsible for providing internet access for the majority of the local population, but Wieser said Facebook hasn't provided enough Burmese-reading content moderators to prevent a widespread Facebook hate campaign against the Rohingya Muslim minority in Myanmar.

“Although we don’t have a tangible sense of financial consequences these situations may bring they are illustrative of systemic mis-management at the company which is mostly under-appreciated as risks by investors,” Wieser said in the note.

Price Action

Facebook's stock traded lower by 1.3 percent on Friday to $172.37 per share.

Related Links:

Q2 13F Roundup: How Buffett, Einhorn, Loeb And Others Adjusted Their Portfolio

Facebook Lost $120 Billion In Market Cap: Here's Some Perspective

Latest Ratings for FB

Dec 2018Tigress FinancialReiteratesBuyBuy
Dec 2018GuggenheimInitiates Coverage OnNeutral
Dec 2018Stifel NicolausDowngradesBuyHold

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Brian Wieser Myanmar Pivotal Research GroupAnalyst Color Price Target Reiteration Top Stories Analyst Ratings Best of Benzinga


Related Articles (FB)

View Comments and Join the Discussion!

Latest Ratings

CNPRBC CapitalUpgrades34.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Qorvo Announced Pricing Of Additional Senior Notes Worth $130M On August 14

Making The Natural Gas Trade Great Again