Floundering Facebook Still Needs to Convince Investors it Cares
It's been a year of firsts for the world's largest social media site, and now the first-ever shareholder meeting can take its place in the list of Facebook (FB) milestones. While analysts and investors have had their chance to vote, so to speak, on the merits of the stock since its IPO last year, until now the average guy has largely been mute.
But after 13 months and a 36% decline, the muzzle has finally been lifted and the verdict clearly read; Facebook is a disaster. Shareholders let their opinions be know in a grilling of billionaire CEO Mark Zuckerberg that has, by and large, elicited a chorus of sarcastic boo-hoo's.
Zuckerberg responded to his critical shareholders by saying nothing in the slumping share price has made him think "the fundamental strategy is wrong."
Really? If widespread derision and a share price that's been clevered of $50 billion of market value doesn't spark some self-doubt, what exactly would?
"If you don't want to be accountable to shareholders, than don't go public," my co-host Jeff Macke asserts in the attached video. "He basically said, 'we're smarter than Wall Street, we don't really care about the share price. Boo Hoo.'"
From late January to the present, Facebook has undergone the second great sell-off of its short life as a listed stock, falling from $32 to $24, or about a 25% decline. Yet all the while, Factset data shows, its support on Wall Street has risen as the stock has fallen, with its current "Buy rating" ratio hitting an all-time high of 72% of 36 analysts who follow it.
As for Zuckerberg, he also used the annual meeting platform to re-assure investors once again (both those at the event as well as those monitoring it from afar), that he actually cares about making money.
The fact that this even came up, that there is still even any doubt that the leader of a $58 billion corporation might have a different agenda is just plain crazy.
Just like in baseball, when the manager of a floundering team suddenly loses his mind, kicks dirt on the umpire and gets tossed out of the game to prove he's had enough, Mark Zuckerberg would also be wise to blow up and prove that he's not only mad, but is also more than a little concerned.
