With the furore around the Facebook-Cambridge Analytica scandal fresh in everyone’s minds, Facebook’s stock price has inevitably plummeted. From a high of $185.09 on NASDAQ on 16 March, it closed yesterday at $166.32. Is this stock correction a reflection of the decreased business capacity of Facebook, or just a reaction to the social media giant’s current woes?
On the face of it, nothing has changed. Facebook’s operations are still running smooth, and none of the fundamental numbers have changed. Add to this the ownership of Instagram and WhatsApp, which have yet to be properly monetised, and you have a company that should be going in only one direction in the future.
However, the data breaches that have exposed customers – and potentially led to Trump’s victory in the 2016 American presidential election – have tarnished Facebook’s reputation irrevocably. For a social media company, their reputation and trust with their audience is all that separates them from oblivion. And Facebook’s public trust levels are at an all time low.
To find out if Facebook’s stock price would ever climb back, we talked to renowned financial expert and journalist Deepak Shenoy. In the first episode of our new weekly financial and economics series “The Capitalmind Show”, he analyses the pros and cons of Facebook’s organisation to determine what the perfect price to buy shares could be.
You can also listen to a podcast of the episode here.