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Investors Are Getting 'Sick' Of Facebook, Says Jim Cramer

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Investors Are Getting 'Sick' Of Facebook, Says Jim Cramer
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Facbeook, Inc. (NASDAQ: FB) is no stranger to negative headlines about user growth, combating fake news and now the latest controversy involving Cambridge Analytica.

Cramer: Investors Losing Patience 

Investors are looking at the latest round of headlines and becoming "sick" of the stock, CNBC's Jim Cramer said on "Squawk on the Street" Monday morning. Facebook is easily the "worst" of the FAANG group, as it is trading at 23 times this year's earnings and 19 times next year's earnings, and comes with the added risk of investors waking up each morning fearing negative news, Cramer said. 

"I also think there is a sense of 'why isn't Facebook more aware of the power it has?'" Cramer said. "It makes it so they seem naive."

Facebook's recent earnings report showed revenue growth of 47 percent and earnings per share growth of 57 percent. Under a normal scenario, this would make the stock attractive — but this is anything but normal.

'Totally Unclear' 

Facebook was aware that data was being taken off its platform in ways that were "completely allowed" based on its rules and regulations, Charles Duhigg of The New York Times Magazine separately told CNBC. But the selling of data to any third party was a violation of the terms, perhaps for the simple reason that Facebook didn't make any money on the transaction itself, he said.

"It's totally unclear whether Cambridge Analytics actually knows what they're doing or whether they just happened to be one of the beneficiaries of one of the largest data breaches in history," Duhigg said. 

Related Links:

Cramer Identifies What's Wrong With The 'FANG' Group

Jim Cramer: Forget Bank Earnings, Focus On Facebook

Posted-In: Cambridge Analytica Charles Duhigg data breach FAANG Jim Cramer social mediaMedia Best of Benzinga

 

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