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‘Facebook is running the show whether we know it or not,’ whistleblower Frances Haugen testifies

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  • FARM
  • FB

Yahoo Finance's Daniel Howley joins the Live show to discuss Facebook whistleblower Frances Haugen's testimonial statements to Congress and the value of the social media giant's stock ticker.

Video Transcript

JARED BLIKRE: Welcome back. Facebook whistleblower, that testimony is going on in Congress in the House. It started a couple of hours ago. And we want to get an update on that with Yahoo Finance's Dan Howley. Dan, you've been listening to the hearing. And what are some of the details here? What's coming out?

DAN HOWLEY: That's right, Jared. So far, we have Frances Haugen. She's given her opening testimony. She's also made a few comments about Facebook, but we do want to dive into her opening testimony, so take a listen.

FRANCES HAUGEN: Facebook wants you to have analysis paralysis, to get stuck in false choices and not act here. Facebook does not have safety by design. And it chooses every day to run the system hot because it maximizes their profit. The result is a system that amplifies division, extremism, and polarization. Facebook is running the show, whether we know it or not.

Facebook's choices have led to disastrous ends in too many cases. Facebook's amplification promotes violence that harms and even kills people. In other cases, Facebook's profit optimizing machine is generating self-harm and self-hate, especially for vulnerable groups like teenage girls, the socially isolated, and the recently widowed. No one is held accountable.

DAN HOWLEY: So, as you can see, she's really showing that, you know, again, that Facebook isn't changing, hasn't changed, pointing to the issues that she has and that she believes need to be known from the company and from those documents that she had taken. Obviously, this all was originally reported by the Wall Street Journal and then released more widely as the Facebook Papers.

We're seeing some decent questions about Haugen and what she believes need to be done as far as Facebook goes and social media in general, but mostly about Facebook. Obviously, she had worked there. But then we're also seeing questions from the Republicans about censorship on social media, which is just a frequent talking point that has really no backing from any actual research showing that there's any kind of bias there. In fact, if you look at most of Facebook's top stories, they're from conservative news outlets. So we're not going to really get the kind of, I think, substantive discussion that we saw in the initial hearing with Haugen this time around.

ZACK GUZMAN: Dan Howley, I mean, when we think about Facebook, too, as a company or Meta, you know, trust is a key issue here, as they've tried to build out everything else that they're trying to do, including their crypto efforts. And those have not really gone anywhere. And now the man at the helm of all that, David Marcus, announced yesterday he's going to be stepping down. So, I mean, I wonder if that would be an example maybe of the company running up into some of those issues, or if it's just the case of this company is trying to do a lot of things in a lot of different avenues and just not very good at really getting things across the finish line because there's so much scrutiny on them?

DAN HOWLEY: I think it's column A and column B. They're doing a bunch of things at once. And also, they're running into this kind of scrutiny that they're seeing. You know, obviously, the big release of the documents from Haugen put a huge mark on Facebook. This is something that is going to continue to resonate, I think, for some time, basically showing that, you know, Facebook, according to, at least, the documents, that they know that they have issues, but refuse to take action on them. So you can imagine, then, that the scrutiny they are already facing about launching their own cryptocurrency is even larger.

And on top of that, obviously, there's the discussion of their plans for an Instagram for kids. That also drew a lot of heat. They put that on the backburner for now. We're expecting to actually hear testimony from the Instagram chief next week about that. So I think for them, really, at this point, it's almost about holding off on their crypto, I guess, endeavor at this point, just because they have so many fires in the iron, and they're facing such a backlash at the same time that I think adding that would just be overload.

JARED BLIKRE: Dan, I want to get your take on that name change to Meta. That already took place, but today, they were supposed to change their ticker from FB to MVRS. And they decided to postpone that until the first quarter of 2022. We don't have a reason why. But I just want to-- I want to get your take on this because, you know, when Google decided to list and change their names to Alphabet, they kept their old ticker. We got GOGGL and GOOG. I'm just wondering, could it be that Facebook just really doesn't want to be called Facebook anymore because of all the controversy?

And then I'm also going to throw out, I was looking at a bunch of public companies to see who might take over that Facebook ticker. I found a company called Farmer Bros. They're already publicly listed. But they have the ticker, FARM, which I think is a far better ticker. So I'm going to keep looking here. But what are your thoughts on this?

DAN HOWLEY: Yeah, I think it's interesting because Zuckerberg had said that the change wasn't something that was kind of done on a whim because of the controversies that they had seen, that it was something that they were planning for some time. You know, you have to imagine that that's the case. A company like Facebook probably wouldn't just seem to turn and do a 180 and change its name based on one negative report.

Now, that's not to say that they weren't planning it to get away from the Facebook name as a result of the litany of negative reports they've seen over the years. It could have just been that the Wall Street Journal articles dropped just as they were planning to make the move. And then it was, I guess, you could say, unfortunate timing for them. But I think most people are still going to refer to the company as Facebook, just as we refer to Alphabet as Google. Like, when we report Google earnings, we're talking about, yes, larger Alphabet, but most of the revenue comes from Google and its advertising efforts, as well as YouTube.

The same thing we're going to see from Facebook. Facebook is still the breadwinner for that company. It's still the largest social network that they have. So we're still going to refer to it as Facebook. It's very difficult to talk about them as Meta, because most people I feel, when we discuss Meta, don't understand what that is, but they recognize Facebook. And I think for a company this large to make this change at this state in the game is very, very strange.

ZACK GUZMAN: Dan Howley bringing us the latest there on Facebook, appreciate that. And Jared, you know, you mentioned Farmer Bros. This is why you're our chart master here because you're digging deep into finding these companies. Farmer Bros, market cap of $113 million. So we're dealing with a smaller company here by a wide margin compared to Facebook. As you pointed out, the ticker FARM. I don't know if FB is going to be better or worse.

But you think about maybe some of these mix-ups, right, and Metaverse particularly the company there that already has that ticker. It's a metaverse ETF attached to all these crypto projects. They've seen some inflows now because of this name change, I think. And so if you are a small cap company like Farmer Bros here, I wonder if there is upside to taking the FB ticker.

JARED BLIKRE: Yeah, and I just want to point out that in the current environment with the rise of the retail trader, tickers are very important, and companies are taking a heightened view, trying to get the best ones. And I'll tell you a story, Coinbase listed on the NASDAQ-- that was the first big direct listing on the NASDAQ-- because they specifically secured another-- they got the ticker COIN from an ETF, and the NASDAQ facilitated that somehow. But anyway, that's the backstory there. Companies are really paying attention to this, because if you have the right ticker, who knows? You might just get some momentum play. You get the retail army on your side, and then you can raise capital at elevated levels, I guess, Zack.

ZACK GUZMAN: Yeah, no, the COIN ticker is really-- is a crazy story because I think the Winklevoss Twins were attached to it first. And then they got Coinbase. They made a lot of money by getting them to come over just because of the ticker, so there's a lot of preference there. I don't know. We'll keep our eyes. Maybe we get Farmer Bros on the show.

JARED BLIKRE: I would love to. Zack, this is going to become a thing. Next time I host with you or the time after, I want to see Farmer Bros in a chair here in the Zoom screen. So we're going to do that.

ZACK GUZMAN: Let's do it.