Facebook stock slowed today after rallying on Monday following a price target increase from analysts at Credit Suisse. Meanwhile, the social network kicked off its annual F8 conference this week, and CEO Mark Zuckerberg laid out what’s next for the company.
Facebook versus Snapchat
During his keynote at the F8 conference today, Zuckerberg described augmented reality as his firm’s “act two,” taking an obvious jab at Snapchat in the process. He said they intend to create “the first mainstream augmented reality platform out of the camera,” which seems like a clear reference to Snap Inc., the parent company of Snapchat which is trying to position itself as a “camera company” rather than just another social networking company.
Facebook appears to have been doing an excellent job at copying Snapchat, as several of its cloned features like Instagram Stories and others appear to be doing quite well. A few analysts have been trying to paint Facebook as the trailblazer and Snap as the leader, but it’s hard to see that as being the case when Zuckerberg’s firm is able to so easily take ideas from Snap.
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Tuesday on CNBC, former Microsoft CEO Steve Ballmer described Facebook as “a complete juggernaut” and warned that it has the ability to greatly pressure Snap, which it is clearly excelling at.
Crime hasn’t yet hit Facebook stock
The company also did damage control this week after people blasted it for taking too long to remove a video of a man committing a murder that had been posted on its platform. In a post, Facebook gave a precise timeline of when the events occurred, starting with the time when the video of a man shooting an elderly man to death was posted on its platform.
In all, the video was on the platform for more than two hours, but according to the social network, it wasn’t reported until long after it was posted. The company claims that it only took a little over 20 minutes to remove the video after someone actually reported it. The video shows the suspect Steve Stephens allegedly shooting an elderly man to death after he returned home from Easter dinner with family. Stephens was found dead after a police chase on Tuesday, and officials say he committed suicide while his vehicle was spinning out of control after Pennsylvania State Troopers rammed his car to disable it.
Incidents such as this one haven’t yet hit Facebook stock, but apparently, there’s talk that they could one day.
An unnamed analyst reportedly told Yahoo Finance, “Eventually, it could become a problem, if advertisers react.”
The example of Google’s YouTube is given then as advertisers started to pull their ad dollars because their ads appeared with potentially offensive content. Given that Facebook’s ad model is different than Google’s, it’s no surprise that this issue hasn’t yet hit Facebook stock. However, as the company evolves its model, advertisers could start seeing their ads appear in places they wish they wouldn’t.
Facebook stock price target to $175
In a research note on Monday, Credit Suisse analyst Stephen Ju said he has bumped up his price target for Facebook stock from $170 to $175 per share and reiterated his Overweight rating. He believes that the social networking company will continue its pattern of revenue growth over the long term without the need to boost the news feed ad load. He feels that Instagram and premium videos will drive that long-term revenue growth instead.
Additionally, he said his contacts within the industry have indicated that dynamic travel ads on the social platform are “gaining traction.”
Shares of Facebook stock slipped by as much as 0.32% to $140.99 during regular trading hours on Tuesday.