Are Trump and Media Hurting Facebook Stock?
Facebook Inc‘s (NASDAQ:FB) FB stock dropped 3.5% on Thursday, with some pointing to the election of Donald Trump as U.S. president as partly responsible for the drop in Facebook stock and many other consumer tech stocks.
Facebook is one of many tech companies to have taken a hit following the U.S. presidential election, including other powerhouses like Netflix, Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:APPL), and Alphabet Inc (NASDAQ:GOOG). These stocks are down roughly two to five percent each, with NFLX stock taking the biggest fall at over five percent down.
And that doesn’t include a whole mess of other large tech companies reeling in the stock market.
There is a fear that President-elect Trump, with his anti-trade rhetoric and potential future policies, will affect tech companies that rely on production lines outside the United States.
What makes FB stock unique is that beyond the Trump question, Facebook has been criticized by many in the news media for affecting the way news is disseminated and, therefore, the overall result of the election. Specifically, the company has been accused of creating insulated echo chambers that only expose Facebook users to news that they want to see.
This debate is by no means new, but it has taken on a fresh dynamic following Trump’s victory. Many traditional journalists claim that Facebook has to take on a more proactive role in vetting news, rather than serving as an amplification service for unchecked information masquerading as reliable facts. Facebook defends itself by claiming to not be a media company, despite being an increasingly dominant source of news dissemination.
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Ultimately, this debate will more than likely have little immediate impact on FB stock. But it has caused a lot of media and Facebook soul-searching as to just how much this social media company can influence an election. Whether this particularly incendiary campaign cycle will incite reforms on Facebook’s part, or whether the company will institute little change, that’s harder to predict.
The question is whether there will be a backlash against Facebook (and thus Facebook stock) by many of the despondent voters in America who see the company as partially responsible for the outcome of the election.
As for FB stock, the shares are at a three-month low. It will be worth keeping an eye on the price of Facebook stock to see if this massive collective tech stock malaise is an outlier or representative of a more long-term trend.