By
Bhushan Akolkar
April 25th, 2024
The future of Facebook is not in question. However, even as its stock continues to rise, regulatory hurdles mar the company’s journey. Yesterday, the FB stock price increased by 1.69%.
Facebook is easily one of the world’s most successful companies. The social media giant has had an impressive streak and keeps on gaining in popularity and utility. This is also helped by the fact that over time, it’s been able to acquire other potential competitors such as Instagram and Whatsapp. Today, Facebook isn’t just the largest social media network but one of the best-performing as Facebook stock is still doing the numbers. However, the future of Facebook is worth thinking about, especially with all of the flak it’s been getting in recent times.
Facebook (FB) Stock
Facebook launched back in 2004 but didn’t go public until 2012. Since then, the company has returned almost 450% for its early investors. Facebook (FB) stock debuted at $38 per share at the time and raised a little over $16 billion. Today, it is trading over $213 with a market capitalization of more than $620 billion.
FB is continuing its relative winning streak with more than 6% gains this year alone. In the last 12 months, the company has returned almost 34%. Yesterday alone, stocks increased by 1.69% and people are still very optimistic.
While Facebook’s achievements have been noteworthy, the company has had to battle a ton of harsh responses from regulatory authorities all over the world. The future of Facebook doesn’t look bleak but will need serious work done.
Facebook Privacy Problem Could Affect Its Future
Probably the biggest monster Facebook fights is privacy. The company has been tackled many times about how it handles user information and user data. Ever since this data was involved with a political campaign strategy in the past, the company’s outlook and public image have suffered significantly. This privacy issue has cost the company millions of dollars in fines and expenses related to solving the problem. Also, this is the basis of Congress’ arguments against Facebook’s digital asset Libra
Both CEO Mark Zuckerberg and Libra chief David Marcus have spent hours with Congress arguing for Libra. However, authorities are not convinced and would rather Facebook put a pin in it. While the company is still thriving, the future of Libra looks bleak at best.
There’s also the problem of the sheer power that Facebook has. The company controls the Facebook platform, WhatsApp, and Instagram, three of the world’s largest platforms. This much power, many people fear, is a little disturbing to be under the control of one person and so there’s the push for the company to split.
How Facebook Can Salvage Its Future
On the business front, Facebook probably doesn’t have any problem. The Motley Fool reports that back when it first went public, the company’s average revenue per user (ARPU) was $1.54. By the end of 2019’s last quarter, it was $8.52. It’s basically because Facebook has grown with its social network features as well as its advertising business.
On the regulatory front, Facebook has two major options. It could either pander to public expectation even from authorities to save its future or become more dogged and proactive.
While it is very easy to buckle under the expectation and the backlash from the government, it might be a bad idea in the long run. This is because authorities and the public will continue to expect the buckling and everything the company does will be torn apart.
On the other hand, if it doesn’t pander, it might make more enemies but will most likely continue to stand tall for a very long time.