Facebook Plunge Drags Nasdaq Red, VIX Chaotic Ahead Of Open

Update: Facebook continues to tumble further - down over 5.5%...




And is weighing both the S&P and Nasdaq down pre-market...


Additionally, VIX is chaotic ahead of the open as the machines desperately try to bid the market green for the open.



Stifel analyst Scott Devitt downgraded the recommendation on Facebook Inc. to hold from buy.

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Facebook has erased most of its year-to-date gains in pre-market trading as investors see CEO Zuckerberg's decision to shift news feeds to personal posts and away from businesses and media outlets creating a risk to the company’s financial performance.

As we detailed overnight, Facebook is making major changes to its flagship social network, shifting users’ news feeds back toward posts from friends and family and away from businesses and media outlets -- a transition that is likely to mean people spend less time on the site.

In a post Thursday, Chief Executive Officer Mark Zuckerberg said community feedback has shown that public content has been “crowding out the personal moments that lead us to connect more with each other.” The goal of the product teams will be to help Facebook’s more than 2 billion monthly users find content that will lead to more meaningful social interactions, he said.

"By making these changes, I expect the time people spend on Facebook and some measures of engagement will go down," Zuckerberg wrote. "But I also expect the time you do spend on Facebook will be more valuable. And if we do the right thing, I believe that will be good for our community and our business over the long term too."

As Bloomberg points out, the changes promised today aren’t entirely new -- Facebook has been shifting the content on its news feed toward posts from friends and family and away from brands and publications for more than a year.

A large part of brands and media companies’ strategies is to post articles and videos from their pages to engage consumers -- items that aren’t considered "meaningful interactions" between people. Downplaying those posts from brands and businesses may put revenue at risk, said James Cakmak, an analyst at Monness Crespi Hardt & Co.

“There will be less opportunity to expose Facebook users to brands," Cakmak said.

Stifel analyst Scott Devitt (buy, PT $195) has "less conviction in our call vs any other time in our coverage history" as FB either addresses the platform issues despite the effect on monetization or ignores the challenges and risks the franchise.

The move could exacerbate slowing trends in user engagement, although the trends don’t take into account Instagram or WhatsApp usage, which have both grown rapidly.

The reaction to Zuckerberg's self-censorship decision is clear...


Shareholders clearly prefer more fake news to less.

As we concluded previously, ironically, the newsfeed overhaul is also said to be "an attempt to encourage more sharing and personal connecting, amid a backlash with many people worrying about social media sucking up time and damaging users’ mental health" according to the FT.

In reality, it will only succeed in further alienating an already deeply polarized American population.

Yet while it remains to be seen what impact on Facebook, or Zuckerberg's 2020 presidential ambitions, this latest foray into censorship has, the biggest losers are clear.

Last year, the company tested separating friends and family posts from those posted by businesses and publishers. It created a tab called “Explore” for those other posts in six countries including Sri Lanka, Slovakia and Cambodia. What happened next? Publishers in those countries complained that traffic fell dramatically.

At the time, Adam Mosseri, head of newsfeed, said Facebook currently had no plans to roll this test out further in other countries and said it was unfortunate that some had "mistakenly made that interpretation." It now appears that this "test" is about to applied to everyone.



Moe-Monay Fri, 01/12/2018 - 07:14 Permalink

Men.  CIA-Facebook is nothing butt doo doo.  

It's not just used poo poo rag.  It's one of those Roman doo doo rags on the end of a stick used repeatedly at the common latrines. (Please this word "Latrine" is not to be used as a person's name for any ethnic Zh people who read the blog ) 

I can't wait to see it die like MySpace.  CIA probably won't let it die though.

FoggyWorld Gaius Frakkin'… Fri, 01/12/2018 - 09:07 Permalink

It takes a lot of time but I used Etsy for all presents this year because you usually can tell just where the products are made.

Their awful search engine is what slows it down.

Trump needs to reinstate that law that Obama got rid of via an EO.  Right now no one is required by law to label a product with the country of origin.  We should demand that that be restored.

In reply to by Gaius Frakkin'…

all-priced-in Moe-Monay Fri, 01/12/2018 - 09:33 Permalink

Just when I start to believe there is no market left - FB gets hit with a $10 drop on some actual news that directly impacts its business. Almost like reality matters -


But then - I expect FB to turn green at the close - Maybe it is me that has been corrupted.







In reply to by Moe-Monay

Endgame Napoleon buzzsaw99 Fri, 01/12/2018 - 08:21 Permalink

Facebook is for “work”ing moms during work hours and between their prolonged and excused absenteeism jaunts. Here in the South, while most of them do not vote, the FB moms are more often than not conservative-leaning and probably not uninterested in brands. When it is time to shift focus in their 99%-childbearing-aged-mom-staffed jobs, turning from posting baby & kid pics on FB to clothes shopping, mom workers show the versatility of their skill set. Before leaving the building at 2:30, dodging the barrage of calls from paying customers, mom-gang members can multi task with aplomb, shifting from absorbing brand information to fuel their after-2:30 shopping spree to posting more baby pics for their friends to like. Diversity-first and mom-dominated, these workplace mom gangs plan their next excused week off for baby travel soccer, discussing it with the online mom gang on FB, but leaving out the part about retaining their mom-gang job even though 8 of their 9 lengthy trips exceeded their official paid time off from work and their excused pregnancy leaves. They leave out the vicious and taunting parts, like how they gang up on some women, bullying out the few non-mom non culture fits periodically hired to boost up the momma manager’s bonus numbers by working their cans off, coming to work every day, staying throughout the work day and meeting the sales generation and account-retention numbers each month until churned with no UC, as the moms—managers included—back watch while being dramatically absentee in their mom-protection racket. They even post photos of the many workplace mom-bonding parties with baby / kid / family themes, sharing ads about the many openly discriminatory jobs “voted best for moms.”

In reply to by buzzsaw99

lester1 Fri, 01/12/2018 - 07:20 Permalink

Facebook is lame. Too much liberal censorship, and high school kids don't want to be on the same networking platform as their parents.


And has anyone ever clicked a Facebook Ad?? I haven't.



Hal n back lester1 Fri, 01/12/2018 - 07:30 Permalink

Aside from P&G and Unilever cutting ad spend as they do not see the bang for the buck, I constantly ask my kids friends if they actually buy somthing as a consequence of being on or at FB and the answer is no.

not only are stock prices high, so are the prices for free agent athletes, a cost buried in everything we buy, even if we do not watch the games.

In reply to by lester1

tahoebumsmith Fri, 01/12/2018 - 07:24 Permalink

Fakebook has done more to ruin society then anything else in history. The long term damage can never be reversed so nothing he changes at this point will really matter.