Facebook (NASDAQ:FB) And Google Agree To ‘Assist One Another’

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Facebook
Ticker: NASDAQ:FB
Price: $267.09

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Facebook Inc (NASDAQ: FB) and Google-parent Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) formed an agreement to work together in preparation for any potential probe that looked into their advertising deal, several U.S. states have reportedly alleged in a lawsuit.

What Happened: An unredacted draft version of the lawsuit filed by 10 states against Google contains the mention of the cooperation among the two tech giants, the Wall Street Journal reported Tuesday.

Some of the provisions contained in the deal of the two companies state that the two tech firms will “cooperate and assist each other in responding to any Antitrust Action” and “promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement,” as per the Journal.

Facebook Chief Operating Officer Sheryl Sandberg reportedly signed on the deal between the two companies. The draft version of the lawsuit also refers to an email from her to CEO Mark Zuckerberg and others where she told them, “this is a big deal strategically.”

The redacted version of the filed lawsuit does not mention Sandberg.

Why It Matters: Last week, 10 Republican U.S. states, led by Texas, filed a lawsuit against Google — accusing the tech giant of colluding with Facebook for the purpose of rigging ad auctions.

The states are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota, and Utah, and Texas.

Apart from the Texas lawsuit, Google was also sued in a separate antitrust lawsuit by 38 attorneys general last week. They alleged that the company has a monopoly over the internet-search market through both contracts and the way it conducts business.

In October the U.S. Department of Justice filed an antitrust case against Google that accused the tech behemoth of locking out competitors — using billions of dollars worth of exclusionary agreements. 

Business Summary

Facebook continues to confront election rated censorship controversies. However, it remains a staple in technology and a blue-chip stock with enticing upside.

Our AI systems rated Facebook C in Technicals, B in Growth, B in Low Volatility Momentum, and B in Quality Value. The stock closed down 6.31% to $263.11 on volume of 47,299,002 vs its 10-day price average of $274.26 and its 22-day price average of $269.78, and is up 25.42% for the year.

Revenue grew by 11.71% in the last fiscal year and grew by 94.27% over the last three fiscal years, Operating Income grew by 19.88% in the last fiscal year and grew by 42.33% over the last three fiscal years, EPS grew by 36.52% in the last fiscal year and grew by 62.85% over the last three fiscal years.

Revenue was $70697.0M in the last fiscal year compared to $40653.0M three years ago, Operating Income was $23986.0M in the last fiscal year compared to $20203.0M three years ago, EPS was $6.43 in the last fiscal year compared to $5.39 three years ago, and ROE was 19.96% in the last year compared to 23.86% three years ago.

Forward 12M Revenue is expected to grow by 16.71% over the next 12 months, and the stock is trading with a Forward 12M P/E of 26.3.

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 287.37.

The projected lower bound is: 246.46.

The projected closing price is: 266.92.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.

During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 40.0239. This is not an overbought or oversold reading. The last signal was a sell 13 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.16. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 76 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 8 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -5.700 at 267.090. Volume was 17% below average (neutral) and Bollinger Bands were 51% narrower than normal.

Open    High    Low     Close     Volume
271.500 271.500 264.630 267.090   17,335,000
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bearish
Long Term:         Bullish
Moving Averages: 10-period    50-period     200-period
Close:           274.48       275.97        239.63
Volatility:      18           47            58
Volume:          19,284,736   18,741,068    23,775,322

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FACEBOOK INC A is currently 11.5% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 7 periods.

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