We are not out of the woods yet. That is how one investment manager would paint the picture of what is going on with social media stocks at the moment. He has told CNBC that the social media companies are very likely to see more declines as they barrel towards earnings because there are more data privacy issues that are coming to the forefront every single day. He is concerned that those who are in charge of making sure these types of things do not consume the whole company have largely dropped the ball on this one. Moreover, he believes that as more and more news about these kinds of leaks come out, investors are going to run for the doors on these stocks.
CNBC says that the investment manager also says that the recent drop in the value of technology stocks may still not be enough to encourage investors to hop back in and buy up these names. There are still a lot of people waiting on the sidelines trying to figure out what the proper thing for them to do is.
Although it is clear that Facebook is the one that has the spotlight turned on it right now for data problems, it is doubtful that they are the one social media company that has done things similar to what they are accused of. Rather, it is assumed that many other companies have also engaged in these types of practices, and that is extremely worrying for those who have firmly put their foot in the camp of being in favor of technology stocks. They have to admit that on some level they are worried about the values of the stocks that they are holding.
At the end of the day, most do not expect that Facebook is going to change its business model all that much. It is way too profitable of a plan to bother with changing it all that greatly. However, the interim may see a decline in the price of Facebook stock, and that may provide people with the opportunity to get in at a better price point down the road. That could lead to bigger returns overall for those who are patient enough to wait this one out and to put their money into play in a company that is definitely getting all of the heat from the public at this particular moment in time.
Dil Bole Oberoi
