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What's Next For Facebook And Zuckerberg?

What's Next For Facebook And Zuckerberg?
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Facebook, Inc. (NASDAQ: FB) shares continue to trade within striking distance of their 52-week low of $149.02 after a new data breach involving 50 million users was disclosed. This has some investors questioning what's next for the stock — and even the future of CEO Mark Zuckerberg amid some calls for him to resign.

Board Member: 'Drive And Leadership'

Dr. Susan Desmond-Hellmann is the lead director on Facebook's board, and she's standing by Zuckerberg's ability to continue leading the company.

Desmond-Hellmann told Bloomberg TV that Zuckerberg continues to bring the necessary "drive and leadership" to address challenges and take the company in the right direction.

"I have confidence in him and Sheryl [COO Sandberg] and the leadership team to drive Facebook to be what I also want Facebook to be — a good company that people trust and feel good about," she said.

Technician: More Pain To Come

Facebook shares are down more than 15 percent over the past three months and are off around 25 percent from their all-time high of $218.62. Yet investors should avoid buying the dip, as Facebook's longer-term stock chart is flashing some warning signs, Piper Jaffray Chief Market Technician Craig Johnson told CNBC during a "Trading Nation" segment.

Facebook's stock has dipped below the up-trend support line and is trading below the 200-day moving average, Johnson said. This marks a reversal of a supportive trend that has been intact going back to October 2013, he said.

From a technical perspective, the charts are suggesting Facebook's stock has more downside ahead and could test the $150 level for some support, in the Piper Jaffray technician's view.

Plotting Facebook's stock performance with the S&P 500 index shows the social media company has been underperforming the broader index for 18 months, Johnson said. 

"I'm not a buyer at these levels," he said. "I'm going to wait for further shake-up."

'Cautious Buy'

Investors may be guilty of overlooking one simple fact which warrants a "cautious buy" on the stock, Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, also said during the CNBC segment.

Facebook remains "the single biggest general competitor of eyeballs to television," and even when factoring in its recent problems, the company's Instagram platform continues to perform very well, he said.

Instagram, rather than the core Facebook platform, is the future of the company if management succeeds in monetizing it through transactions, Schlossberg said.

Related Links:

Why Facebook's Recent Hack Is 'Much Worse' Than Cambridge Analytica

Facebook 'Hit Reset' On Expectations: Wall Street Responds To The Lackluster Quarter

Posted-In: Boris Schlossberg CNBC Craig Johnson Piper Jaffray Sheryl Sandberg social mediaTech Media Best of Benzinga


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