Monday, 26 March 2018 16:49

Could FaceBook Go Bankrupt?

With all the trouble that Facebook has been facing recently, the question has to be asked, could they go out of business? Our answer is yes and they probably will within 3 years.

FaceBook is under pressure like never before. Anyone watching the media appearances of Mark Zuckerberg can see the stress on his shoulders as a clear sign that he’s worried in a way that we haven’t seen, he’s on the defensive. He’s worried because the mob like mentality he helped to create has now turned on him and he doesn’t know how to react. Ironically we don’t know what they have suddenly done wrong. The things they are accused of doing, they’ve been openly doing for years. So why now has it been highlighted?

Mark will never be penniless, he’s a multi-billionaire and money will never be an issue for him. It isn’t this which is worrying him. What must be haunting him is the thought that FaceBook will replicate MySpace. MySpace was popular and then abandoned in the early 2000’s. It can quite easily happen to FaceBook within as little as 36 months and here we will show why that is likely to happen.

Pre Existing Problems

Even before this recent trouble. Users were spending less time on FaceBook. They were making changes to try and make content king, rather than ads but they were failing. In early February 2018, their share price was already undertaking a hit. It seemed investors were already unhappy with Zuckerberg’s plans for altering the platform to focus on content.

The younger end of their previously core users wouldn’t be seen dead on it. From a youngster’s point of view, they didn’t want to hang out somewhere that their parents were. This wasn’t just an issue for FaceBook but all platforms of this type. One generation doesn’t want to be linked to the previous one.

Genuine Users?

The key question is just how accurate are their user numbers. We don’t think they are very accurate at all. FaceBook has a lot of fake accounts, just how they define active users is also questionable. If we were investors we would want to see some independent verification of what FaceBook is reporting. They claim that they have over 2 billion users with over 1 billion being active every day. Something about that seems very very odd.

We think that very soon the emperor is going to be shown to be wearing no clothes, new or old. If they have been over-reporting users then FaceBook could be looking at criminal charges for false financial statements.

Last To Leave The Party Feeling

People seem to now be viewing FaceBook as being a bit uncool. We all know the feeling as the good people start to filter away from a party at the end of the night and all you are left with are those who just can't accept the good times are over. That's the same sad feeling that will FaceBook will be fighting very soon.

When more people start to leave and have their account deleted. The platform will lose more content and this will snowball into losing more users and this will accelerate.

Trust

The site is now the least trusted tech site in the United States right now. This is going to be almost impossible for them to reverse. After all their whole business model is about selling data. If they say they aren’t going to sell it, how will they make money unless they start charging people to use the site? It’s an impossible circle to square.

One big factor that is being overlooked is that when politicians feel they can question FaceBook and get receive from potential voters, they will be relentless in attacking it.

Financials

For their year ending 2017, FaceBook reported operating profits of $15.9bn. Now that doesn’t sound like a company in trouble and it isn’t at the moment.

With people now deleting their accounts, more privacy and legal bombshells ready to explode underneath the company, morale at an all-time low and the company questioning their reason for being. It seems things couldn’t get much worse, but they are about to.

Rising Interest Rates – Here We Go!

FaceBook’s share price will be smashed for 6 when interest rates rise over the coming months. Investors will pull their money out of the company and put it back into bonds. FaceBook’s share’s, along with most companies on the stock market, the price will plummet to a 10th of where it is now.  All this will happen very quickly and nobody will be able to stop it.

So there you go, several reasons why FaceBook will die. Out of business, they go and good riddance to them.

Mark our words, the site will be a ghost town full of tumbleweed within 3 years.

1 comment

  • Comment Link Friday, 27 July 2018 03:25 posted by QuickLoans

    Down 20% in one day, that's one heck of a drop in their share price. I'd be panicked right now if I owned some of their stock. It's over for social media, it isn't cool anymore. All this censorship and thought control is going down badly. Unlucky to Zucker if he really did lose £16 bn in one day.

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