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Analysts issue new price targets for Facebook; Netflix’s Hastings says social media king trying to ‘grow up quickly’

Monday, April 16, 2018 7:17
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With Facebook Inc. (NASDAQ: FB) reporting earnings on April 25, analysts are rushing to revise their price targets following the severe dent to the company’s stock from the Cambridge Analytica scandal.

BMO Capital analyst Daniel Salmon lowered his price target on Facebook on Monday to US$170 from US$175. He reiterated a Hold rating on the stock.

Facebook’s revenue would not take a hit, Salmon wrote, although there may be “minor” user decline in the short-run, according to a report in the Week Herald. Salmon added that advertisers may experience return on investment (ROI) degradation as data use platforms like Facebook undergo “proactive and regulated changes.”

CEO Mark Zuckerberg’s control over Facebook and the company’s lack of an independent chairman have drawn fresh criticism from investors.

Vicki Bakhshi, director of governance and sustainable investment at BMO Global Asset Management, which holds Facebook shares, said that some company boards are behind the curve in understanding data privacy risks.

“The data privacy breaches have placed a question mark over the effectiveness of the current (Facebook) board in fulfilling its duty,” Bakshi told the Financial Times.

Read: Analysts remain bullish on Facebook, give thumbs-up to Zuckerberg’s testimony before Congress

Despite the regulatory overhang, analysts at Wedbush reiterated a Buy rating on Facebook in a report published March 29. It set a price target of US $260. The report highlighted Facebook’s “unique form of engagement” as particularly valuable to advertisers.

Hastings breaks silence  

Facebook board member Reed Hastings offered his first public comments on the privacy scandal that has rocked Facebook over the last month.

“Social, with these platforms — whether that’s YouTube or Facebook — are clearly trying to grow up quickly. And you see that with all new technologies,” Hastings, the CEO of Netflix (NASDAQ:NFLX), said on stage at the TED conference on Saturday in Vancouver when asked what people should know about Mark Zuckerberg amid the recent controversies.

“I mean, yesterday we were talking about printed DNA. And it’s like, that could be fantastic or it could be horrific,” he continued. “When television was first popular in the 1960s in the U.S., it was called a vast wasteland. And television was going to rock the minds of everybody. And it turns out everybody’s minds were fine. There were some adjustments.”

“So I think of it as all new technologies have pros and cons. And in social we’re just figuring that out.”

Technology news website Recode reported that Hastings also said he did not feel that the company was being “completely unfairly” criticized and that Facebook leadership is taking the privacy breach seriously.

Story by ProactiveInvestors


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