Watch Out, Facebook (NASDAQ:FB) Joe Biden’s Victory Does Not Mean a Return to Obama-Era Smooth Sailing

Watch Out, Facebook (NASDAQ:FB) Joe Biden’s Victory Does Not Mean a Return to Obama-Era Smooth Sailing

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Facebook
Ticker: NASDAQ:FB
Price: $278.77

Facebook News

Plenty of opportunities could emerge for Biden’s administration to flex its muscles to rein in Silicon Valley, from a renewed push to craft federal data privacy rules to tougher antitrust enforcement. One possibility: Biden’s Justice Department could embrace or even broaden the antitrust lawsuit the Trump administration hit Google with this fall.

Biden and Trump have both said Congress should yank the tech industry’s prized liability protections in Section 230 of the Communications Decency Act. That 1996 law shields internet companies, from giants like Google to smaller startups, from lawsuits over what their users post or how they moderate that content.

While Republicans have pummeled the provision as enabling anti-conservative “censorship,” Biden and other Democrats say the tech companies aren’t doing enough to fight misinformation and hate speech floating through the platforms.

Team Biden has tussled with Facebook in particular, complaining in the week ahead of Election Day of improperly blocked ads. The campaign previously went after the platform for its policies targeting digitally manipulated “deepfake” content as well as the “dangerous claptrap” of misinformation flowing unabated. Biden has said he would challenge tech companies to ensure their algorithms don’t sow division.

The Consumer Technology Association’s Moore, however, argued that a Biden administration is likely to at least give tech industry representatives a fair hearing, even on issues they don’t agree on. She also expects the Biden administration’s more permissive immigration stances to be a boon for tech companies that have long criticized Trump’s proposed restrictions.

Itwould be up to tech companies to figure out how to woo and perhaps join the incoming administration to help shape this scrutiny. Some leading figures have already succeeded at making inroads: Microsoft President Brad Smith, Amazon Senior Vice President (and former Biden staffer) Jay Carney and LinkedIn co-founder Reid Hoffman are among Biden’s top campaign bundlers, and one figure on Biden’s transition team is Carlos Monje, who recently directed public policy at Twitter. Silicon Valley may also see incoming Vice President Kamala Harris as a sympathetic ear given her California ties.

When Senate Republicans summoned tech CEOs to Capitol Hill for a grilling during the week before the election, Facebook CEO Mark Zuckerberg surprised many by saying he was open to amending Section 230’s liability protections, which could be an opening next year as policymakers weigh new legislation.

Another factor to watch: Biden built a Senate record as a friend to copyright holders like the recording industry, which could emerge in tech fights over online piracy. Chris Dodd, the former senator who for years headed the Motion Picture Association, is another Biden ally who played a central role in his campaign efforts this year.

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: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 262.34.

The projected upper bound is: 301.48.

The projected lower bound is: 255.47.

The projected closing price is: 278.47.

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 19 white candles and 31 black candles for a net of 12 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 78.3153. This is not an overbought or oversold reading. The last signal was a sell 0 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 52.38. 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 46 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 46. This is not a topping or bottoming area. The last signal was a sell 0 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 buy 2 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -14.640 at 278.770. Volume was 7% above average (neutral) and Bollinger Bands were 3% narrower than normal.

Open     High     Low     Close     Volume
289.870  292.580  278.530 278.770   25,117,650
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period     50-period     200-period
Close:           277.58        270.14        228.58
Volatility:      86            53            61
Volume:          26,240,040    22,280,502    24,410,954

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 22.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.

Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 13 periods.

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