Facebook Stock Rises 7% Year-to-Date as Investors Await Earnings Release

Jacob Maslow  |

Facebook Inc.(FB)) stock is up over 7% year-to-date, through January 15, and ahead of the company’s earnings release on January 30. Investor sentiment has been low for the social media company which has posted slower growth and earnings revenue in recent quarters.

The company’s stock has fallen over 3% in the past three months, but remains higher than the S&P 500, which has fallen over 5% during the same time span.

Risks in regulation continue to pose a threat to the company’s earnings, but the risks are well-known amongst investors. Facebook is also rebounding from several scandals in 2018 and rumors that the company’s platform was used to sway elections in the United States.

FAANG stocks remain some of the strongest in the stock market, and Facebook has room for a potential upside surprise this year.

Facebook has copied its Instagram platform and has implemented a “Stories” feature. Stories have become a hit for many Instagram users who struggle with writing great discussion posts for Instagram followers and instead post Stories to boost engagement.

Investors view Facebook adding a “Stories” feature as another avenue for the social media company to generate revenue.

Facebook has also announced that the company will be investing heavily in local news organizations, with a $300 million investment in newsrooms in the US and overseas. The investment will be dispersed over a three-year period. The move may not be financially beneficial for the company and may be a move designed to alleviate much of the criticism surrounding the company’s inaccurate news content.

The initiative aims to add 1,000 new journalists to newsrooms over a 5-year period.

Facebook has also included fact-checkers in the United Kingdom that go through all of the news posts and will combat fake news in the country.

Instagram will remain a key focus going into the company’s earnings release. The platform has experienced massive growth at a time when the company’s Facebook platform is losing users. Ad spending on Instagram is expected to increase, fueled primarily by Stories, which users can comment and like in real-time.

Instagram is viewed as the best way to reach people between the ages of 13 and 34, beating out television ads. Facebook’s platform is best for users 35 and older. Instagram reports that people under 25 spend an average of 32 minutes on the Instagram app per day, but others report that this usage is likely 53 minutes.

The app has 1 billion monthly users and will be the key to combating revenue lost from users deleting their Facebook accounts and apps.

DISCLOSURE: The author has no stake in the listed equities


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Symbol Name Price Change % Volume
FB Facebook Inc. 162.50 -1.45 -0.88 15,504,415 Trade

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