Facebook has been termed as being the “biggest concern” among the so-called FAANG stocks by one industry analyst as there are rising concerns over the fate of the largest social media platform in the world because of increased regulatory scrutiny over it.
“The digital economy operates on trust, and they’ve broken trust on so many levels,” Ray Wang, principal analyst and founder at Silicon Valley-based Constellation Research, said during a television program.
The Silicon Valley tech giants Facebook, Amazon, Apple, Netflix and Google-parent Alphabet are the companies that form the so called FAANG stocks.
Chief Operating Officer Sheryl Sandberg has been at the core of many of Facebook’s trust woes according to Wang. Sandberg has been at the centre of a huge controversy surrounding the company and its activities following a news report published in the New York Times in mid-November in relation to the activities of Sandberg as well as the internal functioning of the social media company.
Throughout 2018, Facebook has been subject to a number of controversies and scandals surrounding data privacy and data security issues which resulted in the shares of the company reaching record lows. The image of the company had also been mired by the controversies. The stock price of the company, as of its last close, was down by 42 per cent from its 52-week high.
When asked whether there was any chance of Sandberg leaving Facebook, Wang said it was “in the rumor category.”
“I think there needs to be some kind of management change or some appointment that’s someone that the market trusts to take care of these issues and to address privacy and cybersecurity in a stronger fashion than what’s being done today,” he said.
Apple “screwed up on pricing,” said Wang turning attention to another troubled Silicon Valley tech giant.
The challenges that the company was facing in the emerging market of India were singled out in particular by Wang. He said that in the Indian market, the company had “overpriced the product” and “missed the whole market” as a result.
Identifying another of the problem areas of Apple, Wang said that the artificial intelligence assistant of the company, Siri, “still doesn’t work,” that they had “nothing to account for” the billions that has already been spent by the company on the Maps product. he also pointed out the problems that are being faced by Apple Watch and the ECG function.
Additionally, Apple would also be impacted by the ongoing U.S.-China trade, Wang added. Other strategists have pointed out that Apple is “at the forefront of vulnerability” in the ongoing conflict.
But the prospects of the company for the long term future was positive according ot Wang despite the challenges faced by the company.
“Overall, they’ve done a good job shifting from products to services revenue and I think that’s going to pay off in the longer run,” he said.
(Adapted from CNBC.com)