Why Facebook (NASDAQ:FB) May Be In Trouble

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Privacy is a big concern in the tech-driven world we live in where details, even some uncomfortably intimate ones, are shared on a regular basis. No one (hopefully) wants an Orwellian surveillance state, where even the most benign actions and thoughts are heavily scrutinized. This sort of scenario is probably why users are so uncomfortable with widespread sharing of their data.

Several months ago Facebook (NASDAQ: FB) CEO, Mark Zuckerburg, slithered on to the congressional floor to answer questions about how his company protects it's user's data. After a lengthy hearing with the interviewers demonstrating a profound ignorance of technology, concerns were mostly quelled with the explanation that users gave their permission for any information that was shared. Which is true-ish. There are a lot of blurred lines on what exactly is permission and permissible data.

In any case, this made stock holders nervous and the price took a bit of a dive. The Cambridge Analytica scandal was quickly forgotten after promises of being good boys and girls were made and Facebook, Inc. (NASDAQ: FB) quickly rallied back, establishing new highs in part thanks to the surging tech sector. After hitting it's High of $193 USD more data related news came out as Facebook, Inc. (NAADAQ: FB) admitted data sharing partnerships with Apple (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT).

These are device makers so it makes sense they would have these types of partnerships, however, a few days later it was further revealed that FB had partnerships with a number of Chinese manufacturers as well including Huawei. This is unfortunate timing for Facebook as just in February the FBI, CIA, and NSA released a statement recommending that purchases from Huwaei and a number of other countries be avoided as these companies could be involved in "undetected espionage." Additionally, Huwaei had been banned from bidding on US government contracts in 2014 and has been described as "...an arm of the Chinese government".

More Promises From Facebook (NASDAQ:FB)  

Facebook, Inc. (NASDAQ: FB) quickly promised to end its partnership with Huwaei whom said private data was never collected on Facebook Users. The damage was already done at this point. Investors don't want to see China and data collection in the same sentence right now, especially as economic tensions mount and Facebook, Inc. (NASDAQ: FB) is already on the radar for suspect activity. For now, Facebook, Inc. (NASDAQ: FB) retains it's user base and claims they seek to enhance privacy and data protection. They will continue to rake in plenty of advertiser dollars even if investor money tapers off. Well, we started this article off talking about how Zuckerberg getting grilled by Congress so let's end it with him awkwardly grilling some meat and convincing us all he is a human as well.

https://www.youtube.com/watch?v=H34QpoJsmrw

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