Investors continue to befriend Facebook (FB), despite its complicated status. Shares of
FB have been rising steadily, rising 30% in the second quarter alone. When the social media giant announced its second-quarter earnings on July 28, its incredible ad revenue was expected to continue to grow.
But there are indications that the FB share price may not always be popular. Privacy and monopoly issues continue to follow FB. Its CEO, Mark Zuckerberg, has publicly pondered whether Facebook is lagging behind streaming platforms like TikTok and YouTube in attracting creators and influencers who post games and videos. Investors will also want to know if Apple’s (AAPL) recent changes to user privacy settings have affected ad revenue.
Monopoly is more than a board game
FB appears to have escaped a large-scale antitrust salvo in June, because the judge rejected a legally insufficient complaint. In essence, the Federal Trade Commission (FTC) and dozens of states have accused FB of acquiring the Instagram photo-sharing app and WhatsApp messaging service as part of an illegal strategy to monopolize social media and stifle competition. . The company denied these allegations.
But this battle may not be over. In July, FB asked FTC President Lina Khan to disqualify the agency from reviewing whether to initiate a new antitrust case against the company, arguing that it could not maintain fairness due to its long history of criticizing FB and other large technology companies.
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Capitol Hill, other reputation impacts on FB include Disclosure of privacy violations, reports about their services spreading false or harmful content, dissatisfaction with the way they handle political materials, and warnings about the impact of social media on everything from child development to mass development. speech.
Also in July, President Biden signed a broad executive order aimed at promoting competitive markets in the U.S. economy and restricting what the White House said is the dominant position of companies and businesses that disadvantage consumers, workers, and workers. Smaller company. Although the order is aimed at multiple industries, it is believed that it will further push big technology into the spotlight of the White House and the Capitol. The
earnings conference call provides investors with a possible opportunity to listen to FB executives discuss some of these topics and whether they see possible future financial impacts.
Data source: New York Stock Exchange, S&P Dow Jones Indices. Chart source: TD Ameritrade’s thinkorswim® platform.
Figure 1: Quarterly likes: Facebook stock (FB, candlestick) performed well in the second quarter,… [+] Data source: New York Stock Exchange, Standard & Poor’s Dow Jones Indices. Image source: TD AMERITRADE THINKORSWIM® platform.
Influencer competition
Investors may also want to see if FB has lost the advantage of hosting influencers and creators on its platform. In a FB post in May, Zuckerberg stated that he hopes to create the best livelihood platform for millions of creators (including game anchors and game creators). He said that FB is beginning to test new tools like Live Breaks, which allow creators to take a break from live broadcasts while making money and keeping viewers entertained.
Bulletin is another new product for creators, this time for writers and podcasters, allowing them to share their work with subscribers via email, using the wide coverage of the FB platform to build their personal followers. Startups, including Substack and Revue, have renewed interest in newsletters as a way for creators to reach, attract, and retain readers.
Apps like Clubhouse and Twitter (TWTR) Space have firmly established themselves in the creators’ user space, putting FB in a catch-up position. This and FB are world renowned memes like Chewbacca Mom and the ALS Ice Cube Challenge. Now, YouTube, TikTok, and other Alphabet (GOOGL) competitors are more likely to have current popular memes.
Apple May Consume
Revenue In In the first quarter, FB reported that its ad revenue increased 30% compared to the first quarter of 2020. In the April earnings conference call, FB gave guidance and expects that total revenue growth in the second quarter will remain stable or moderately accelerated relative to the first quarter.
However, FB also stated that it expects that the unfavorable factors brought about by regulatory and platform changes will increase in 2021, especially the AAPL iOS 14.5 update. “We expect this to begin to have an impact in the second quarter,” FB said in a statement. With the introduction of the new operating system, AAPL users were asked for the first time if they wanted advertisers to track them through their unique device identifiers. Previously, tracking was done by default. Worryingly, when asked, most people may refuse to be tracked. FB uses tracking data to target ads, which is the lifeblood of your ads.
FB also acknowledged that the two trends it will benefit from in 2020 – the rise in online shopping and consumers turning to products and turning away from services during the pandemic – should not expect continued growth in revenue. by advertising in 2021 as before.
Facebook Earnings and Options Activities
will be released on July 28 for the fiscal quarter ending June 2021. Projected consensus earnings per share for the quarter was $ 3.02, up from $ 1 , 80 from the same period last year. Revenues are expected to be US $ 27.82 billion and sales are expected to increase by 60%. 4,444 option traders expect the share price to rise 4.4% in either direction before and after the results are released. Judging from the option’s expiration on July 30, put option activities have dispersed, but some are concentrated at 320 and 325 strike prices. During strikes 350, 370 and 375, the phone has been active. As of Thursday morning, implied volatility is at the 35th percentile.
Note: Call options represent rights, but not

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