5 ms·

This title is inaccurate ... burning money implies it was spent on something. In this case, it implies that renaming the parent company is responsible for the

by smoyer 5y ago

This title is inaccurate ... burning money implies it was spent on something. In this case, it implies that renaming the parent company is responsible for the stock price sinking from its August high. There are quantitative reasons for the stock slide that have nothing to do with this renaming - Facebook lost users for the first time in its history and the announcement that ATT would cost at least $10Bn.

ecoeconomy 5y ago
You're right. Their stock was going to tank eventually because of increasing privacy regulations.
- toomuchtodo 5y ago
  I hope someone at Apple’s financial team made the suggestion to trade derivatives on Meta to reap the benefits of their actions on Meta stock price.
  - prvc 5y ago
    Is that legal?
    - danielvaughn 5y ago
      This is an interesting question. I'm not an expert but it doesn't sound like it would be illegal.
    - toomuchtodo 5y ago
      Not legal advice: Apple made its intentions public. It was the market that mispriced the impact.
      - detaro 5y ago
        Apple likely has access to non-public statistics actually showing the impact.
        toomuchtodo 5y ago
        Are they obligated to not trade on their own research and information? And it’s not Apple stock, it’s Meta’s. Great topic for a Matt Levine Money Stuff segment on his laws of insider trading series. https://github.com/0xNF/lawsofinsidertrading.com https://github.com/0xNF/lawsofinsidertrading.com
        detaro 5y ago
        Fair point, it's a good question if they have an obligation to not use the customer information they gather or not.
  - joezydeco 5y ago
    ATT was public knowledge for months before the Meta earnings report.
- Nextgrid 5y ago
  The real problem is that the business relies on abusing their users - an obvious conflict of interest. Over time, either the users will evolve to make the abuse less effective (equivalent of "banner blindness" of early web advertising), use technical countermeasures (ad-blocking, alternative clients, etc) or use their political power to vote for regulations that will make outlaw said abuse. A mix of all of these is currently happening. The only areas where this kind of adversarial relationship will work is if the adversary has no choice - such as military/defense or law enforcement for example (military enemies can't vote, suspected & convicted criminals can but the feedback loop is so long that it's not going to have effects any time soon). But if the adversary has a free choice, over time they will exercise that choice which will reduce (and eventually eliminate) the profitability of abusing them. I don't see this - or any other business built primarily on advertising and "growth & engagement" - as a winning long-term strategy.
  - quickthrowman 5y ago
    > The real problem is that the business relies on abusing their users - an obvious conflict of interest. This has been my thesis re: FB for a long time now. Using fear, hate, sex, etc to manipulate higher engagement from users isn’t sustainable. It’s abusive and eventually people will move on.
ejb999 5y ago
>>and the announcement that ATT would cost at least $10Bn. What?
- ct0 5y ago
  I had to google it, but the first result was Apple App Tracking. NOT you know, the massive telcom.
  - tchalla 5y ago
    It’s sad that we have to search online or carry a pocket thesaurus to communicate simple things.
    - Wiseacre 5y ago
      I think it's more one user's attempt at standardizing Apple's acronyms.
  - ejb999 5y ago
    Ah, thanks, didn't see the connection with AT&T - that makes more sense.
  - smoyer 5y ago
    Sorry about that ... definitely NOT AT&T (Lily has until recently been a huge iPhone fan ... now she's "giving away" Samsung Galaxy S22 phones).
- HWR_14 5y ago
  I don't know what ATT was intended to stand for, but Zuch claimed Apples privacy rules would cost them 10 billion a year.
  - cnasc 5y ago
    App Tracking Transparency
daveaiello 5y ago
The media seems to conflate the market value of a company's shares with the size of the business on the way up and the expenditures of the business on the way down. A public company's market value is simply its current share price times the number of outstanding shares, see https://www.investopedia.com/terms/m/marketvalue.asp https://www.investopedia.com/terms/m/marketvalue.asp.
- lotsofpulp 5y ago
  Or people in the business of selling clicks (or ads, offline and online) intentionally choose to use various metrics in the wrong ways. Using fluctuations in market cap is a tried and true method of churning out nonsense “content”. I assume there are simple algorithms that basically write the whole article based on the market cap change in last day, week, month, year, whatever the article’s publisher wants.
themodelplumber 5y ago
There's also been a considerable sector rotation & general tech selloff factor which is easily overlooked when fingers point toward Meta internals.
- quickthrowman 5y ago
  If FB declines 7-8% more, it will have halved its market cap in 6 months, its a bit more than just a sector rotation regarding FB shares. AAPL is 10% off it’s ATH, GOOG about 15% off it’s ATH, MSFT is 20% off it’s ATH. FB is doing far worse than other big tech.
  - themodelplumber 5y ago
    It's also younger and a very tempting target for growth-oriented technical traders looking for volatility to leverage. The story is far from over...
the-dude 5y ago
The renaming on the other hand has everything to do with the stock slide.
- theknocker 5y ago
arch-ninja 5y ago
The quantitative reasons alone would have been responsible for a small slouch, but everyone would think "Oh it's Facebook they'll get back in the game soon, better buy now". The renaming leaks information that leadership is scared and desperate, which makes those quantitative reasons more fatal because there isn't a (reasonable) recovery plan.
- dylan604 5y ago
  What makes FB=>Meta "leaks information that leadership is scared" while Google=>Alphabet did not?
  - arch-ninja 5y ago
    Hmm hadn't thought of that. Did google have the same quantitative issues when they changes names or did that come a few years after? It could just be they timed their jump well.
    - dylan604 5y ago
      Most corp name changes are meant to hide stink from something the company did under the previous name. MCI=>Worldcom, Comcast=>Spectrum, etc. Google is one of the most recognizable companies on the planet, yet made the parent company some ridiculous name. To me, that reeked of trying to protect the other properties from the stink of privacy invasion.
      - dmarchand90 5y ago
        I'm convinced the name Alphabet was chosen to mess with Amazon. Bezos has said he choose the name, in part, to have it very early Alphabetically.
  - shakow 5y ago
    That FB renamed to Meta in a bad conjecture while it was hemmoraeging users, whereas as the Alphabet renaming looked like a mere organizational refactoring in a constant growth context.

by smoyer 5y ago

ecoeconomy 5y ago

You're right. Their stock was going to tank eventually because of increasing privacy regulations.

toomuchtodo 5y ago
I hope someone at Apple’s financial team made the suggestion to trade derivatives on Meta to reap the benefits of their actions on Meta stock price.
- prvc 5y ago
  Is that legal?
  - danielvaughn 5y ago
    This is an interesting question. I'm not an expert but it doesn't sound like it would be illegal.
  - toomuchtodo 5y ago
    Not legal advice: Apple made its intentions public. It was the market that mispriced the impact.
    - detaro 5y ago
      Apple likely has access to non-public statistics actually showing the impact.
      - toomuchtodo 5y ago
        Are they obligated to not trade on their own research and information? And it’s not Apple stock, it’s Meta’s. Great topic for a Matt Levine Money Stuff segment on his laws of insider trading series. https://github.com/0xNF/lawsofinsidertrading.com https://github.com/0xNF/lawsofinsidertrading.com
        detaro 5y ago
        Fair point, it's a good question if they have an obligation to not use the customer information they gather or not.
- joezydeco 5y ago
  ATT was public knowledge for months before the Meta earnings report.
Nextgrid 5y ago
The real problem is that the business relies on abusing their users - an obvious conflict of interest. Over time, either the users will evolve to make the abuse less effective (equivalent of "banner blindness" of early web advertising), use technical countermeasures (ad-blocking, alternative clients, etc) or use their political power to vote for regulations that will make outlaw said abuse. A mix of all of these is currently happening. The only areas where this kind of adversarial relationship will work is if the adversary has no choice - such as military/defense or law enforcement for example (military enemies can't vote, suspected & convicted criminals can but the feedback loop is so long that it's not going to have effects any time soon). But if the adversary has a free choice, over time they will exercise that choice which will reduce (and eventually eliminate) the profitability of abusing them. I don't see this - or any other business built primarily on advertising and "growth & engagement" - as a winning long-term strategy.
- quickthrowman 5y ago
  > The real problem is that the business relies on abusing their users - an obvious conflict of interest. This has been my thesis re: FB for a long time now. Using fear, hate, sex, etc to manipulate higher engagement from users isn’t sustainable. It’s abusive and eventually people will move on.

ejb999 5y ago

>>and the announcement that ATT would cost at least $10Bn. What?

ct0 5y ago
I had to google it, but the first result was Apple App Tracking. NOT you know, the massive telcom.
- tchalla 5y ago
  It’s sad that we have to search online or carry a pocket thesaurus to communicate simple things.
  - Wiseacre 5y ago
    I think it's more one user's attempt at standardizing Apple's acronyms.
- ejb999 5y ago
  Ah, thanks, didn't see the connection with AT&T - that makes more sense.
- smoyer 5y ago
  Sorry about that ... definitely NOT AT&T (Lily has until recently been a huge iPhone fan ... now she's "giving away" Samsung Galaxy S22 phones).
HWR_14 5y ago
I don't know what ATT was intended to stand for, but Zuch claimed Apples privacy rules would cost them 10 billion a year.
- cnasc 5y ago
  App Tracking Transparency

daveaiello 5y ago

The media seems to conflate the market value of a company's shares with the size of the business on the way up and the expenditures of the business on the way down. A public company's market value is simply its current share price times the number of outstanding shares, see https://www.investopedia.com/terms/m/marketvalue.asp https://www.investopedia.com/terms/m/marketvalue.asp.

lotsofpulp 5y ago
Or people in the business of selling clicks (or ads, offline and online) intentionally choose to use various metrics in the wrong ways. Using fluctuations in market cap is a tried and true method of churning out nonsense “content”. I assume there are simple algorithms that basically write the whole article based on the market cap change in last day, week, month, year, whatever the article’s publisher wants.

themodelplumber 5y ago

There's also been a considerable sector rotation & general tech selloff factor which is easily overlooked when fingers point toward Meta internals.

quickthrowman 5y ago
If FB declines 7-8% more, it will have halved its market cap in 6 months, its a bit more than just a sector rotation regarding FB shares. AAPL is 10% off it’s ATH, GOOG about 15% off it’s ATH, MSFT is 20% off it’s ATH. FB is doing far worse than other big tech.
- themodelplumber 5y ago
  It's also younger and a very tempting target for growth-oriented technical traders looking for volatility to leverage. The story is far from over...

the-dude 5y ago

The renaming on the other hand has everything to do with the stock slide.

theknocker 5y ago

arch-ninja 5y ago

The quantitative reasons alone would have been responsible for a small slouch, but everyone would think "Oh it's Facebook they'll get back in the game soon, better buy now". The renaming leaks information that leadership is scared and desperate, which makes those quantitative reasons more fatal because there isn't a (reasonable) recovery plan.

dylan604 5y ago
What makes FB=>Meta "leaks information that leadership is scared" while Google=>Alphabet did not?
- arch-ninja 5y ago
  Hmm hadn't thought of that. Did google have the same quantitative issues when they changes names or did that come a few years after? It could just be they timed their jump well.
  - dylan604 5y ago
    Most corp name changes are meant to hide stink from something the company did under the previous name. MCI=>Worldcom, Comcast=>Spectrum, etc. Google is one of the most recognizable companies on the planet, yet made the parent company some ridiculous name. To me, that reeked of trying to protect the other properties from the stink of privacy invasion.
    - dmarchand90 5y ago
      I'm convinced the name Alphabet was chosen to mess with Amazon. Bezos has said he choose the name, in part, to have it very early Alphabetically.
- shakow 5y ago
  That FB renamed to Meta in a bad conjecture while it was hemmoraeging users, whereas as the Alphabet renaming looked like a mere organizational refactoring in a constant growth context.