Facebook is now the well deserved recipient of a wrath of ethical condemnation about its role in selling personal information to the corporate-intelligence-political tentacles. That this is some kind of surprise is the real surprise. After a week of staying under a rock, Mark Zuckerberg in a Wednesday night interview with CNN, fessed up that Facebook “made mistakes,” aka “allowing a breach in personal data.”
Facebook has a consent decree dating back to 2011, when Facebook settled similar allegations – giving user data to third parties without user’s knowledge or consent. Bloomberg:
Under the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of a settlement of federal charges that it deceived consumers and forced them to share more personal information than they intended. That complaint arose after the company changed some user settings without notifying its customers, according to an FTC statement at the time.
An insider reveals how data safety was not a high priority at the company.
If Facebook is found to be in violation of the consent decree, the FTC can extract a fine of $40,000 per day, per violation. Given the 50 million victims this could be substantial.
FB’s revenue was $3.7B in 2011, and over $43B in 2017. They had 1 billion users then and now have 2.1 billion. Revenues went up 11x while users went up 2x? Are we sure they just sell ad space? Only a fool would think that, no they sell lots of personal data and to dubious customers. Much of it is to the intrusive Crime Syndicate spying network set up to control and compromise just about anybody who uses it.
Selling data to Cambridge Analytica is the tip of the iceberg and is serious enough. Who knows how much dark money is siphoned off into this by Deep State actors. Now the Jewish Telegraph Agency reveals that Cambridge Analytica in turned used used Israeli companies and former Israeli and British spies for intelligence gathering. And its all videotaped! They were filmed talking about using bribes, ex-spies, fake IDs and sex workers. They make it clear- it is about data AND dirty tricks.
US born billionaire Robert Mercer funded the development, US born Mark Zuckerberg‘s Facebook provided access to the files, and Israeli and British spies were heavily involved in providing intelligence and doing any “heavy work”. Meanwhile, Steve Bannon and Jared Kushner tied it all into the Trump campaign. I’m seeing a lot of dots to connect here, but where are the “Russians”?
The other problem with FB is that it is a bubble stock. As such, if it crashes, a lot of speculators will lose money. It it stuffed into a large number of portfolios and passive indexes. FB’s market cap is $490 billion. It sells at a rich 12.5x sales, and 31x earnings. The valuation of the mobile social media FANG is on par with the Tech Hysteria of 2000. Accordingly they will be subjected to much more than a mere 12-15% correction. FB’s high was $195.32, and at 165 it trades well above even the 52 week low of $137.60. Zuckerberg has sold 4.9 million FB shares worth $855 million so far this year.
Will it take the rest of the inflated tech bubble and stock market down with it. It doesn’t help that the Fed increases its portfolio run off from $20 billion a month to $30 billion starting in April. And the increasing trade wars can’t be helping matters either. See- US Fiscal Train-Wreck: Accident Waiting to Happen
Even before the new troubles FB showed signs of diminshed growth, ComScore and Nielsen claim time spent on Facebook per U.S. user is actually declining, and that showed up in the daily user count growth. In 4Q, 2017, Facebook daily active users in the US & Canada region, saw a 700,000 user decline.
The Times reports that “ethical” investment funds are reconsidering their decision to hold the increasingly radioactive company.
Nordea, the largest bank in the Nordic region, which manages about £283 billion (~$400 billion USD), said that it had put some of its Facebook investments in “quarantine” while it assessed the scandal. Union Investment, a German group that manages about £255 billion ($360 billion USD), said that it was reviewing its holding of Facebook shares. –The Times
WhatsApp co-founder Brian Acton, who Mark Zuckerburg turned into a billionare after Facebook bought his company for $22 billion, is now telling people to delete their Facebook accounts, promoting hashtag #deletefacebook.
ISBA, a British group of advertisers that spend hundreds of millions of pounds a year on Facebook, demanded answers. It is understood that some of its 3,000 brands, which include those of the consumer goods companies Unilever and P&G, will not tolerate association with Facebook if it emerges that users’ data has found its way into the hands of brokers and political campaigners without authorisation.Sources close to the trade body said that if the company’s answers were not satisfactory, advertisers might spend their money elsewhere. ISBA will meet Facebook executives this week.
Mozilla – the company behind the Firefox browser – has “pressed pause” on Facebook advertising. In a scathing post, Mozilla said that “when Facebook takes stronger action in how it shares customer data, specifically strengthening its default privacy settings for third party apps, we’ll consider returning.” Until then, “Mozilla will advertise elsewhere”.
Commerzbank- has also suspended a Facebook advertising campaign:
“Brand safety and data security are very important to us”, German daily Handelsblatt quotes Commerzbank brand management chief Uwe Hellmann as saying. “We want to give ongoing investigations enough space, and decide how to proceed at an appropriate time.”
TNN Takeaway: The FANG stocks combined with the bitcoin scam I warned about will take a lot of speculators out on stretchers. There is also a powder keg of massive margin debt playing these bubbles.