“If you die in the metaverse, you die in real life.”
Elon Musk has had some bangers when it comes to tweets, but when he sent out a picture of Mark Zuckerberg with that caption, I think he set an unsurmountable standard.
Facebook, sorry, Meta Platforms (META) is hovering around a 52 week low, though it actually ended up slightly yesterday, even as the tech sector was hit hard. This is an absolutely iconic American company, so many might be thinking it’s time to jump in.
There’s an argument for it, but we should be skeptical.
First, despite the name change, Facebook is still the company’s core business. In the film The Social Network, there’s a line where Justin Timberlake’s Sean Parker says: “The Facebook is cool. That’s what it’s got going for it.” But that’s not true anymore.
A poll from Pew last month said less than a third of teens 13-17 use Facebook, a drop from 71% in 2014-2015.
Facebook is also under heavy public scrutiny, with progressives arguing that it doesn’t control offensive speech sufficiently while conservatives argue it is too censorious. It’s a major problem as Facebook’s user base starts to lean towards older people.
Second, there is legal scrutiny.
Just yesterday, Meta Platforms was ordered to pay $174.5 million in damages to Voxer Inc. for patent infringement with Facebook Live and Instagram Live.
The FTC is also going after Facebook, and FTC Chair Lina M. Khan has been a noted critic of Big Tech in the past. A number of Facebook users are also suing the company for allegedly tracking their online behavior using a workaround of Apple’s privacy policies.
Third, the company’s suffering a loss of media support.
Some suggest the whole reason it is even called Meta Platforms now is because the company was trying to change the conversation from whistleblower Frances Haugen’s revelations, which culminated in her testimony on Capitol Hill. (More on what she’s doing now below.)
Finally, there’s the question of whether the metaverse is even plausible.
“The Merge,” the big switch of the ethereum network to a Proof of Stake model, has successfully taken place. However, we don’t yet know whether apps, games, virtual reality, “augmented reality” and all the other wild dreams are going to become profitable or widely used.
And there is a time limit here if Facebook’s core business is under pressure. It needs new sources of revenue.
Facebook does look attractive at this price level – with a P/E level under 12. And Mark Zuckerberg is nothing if not driven. But it pays to be cautious as the tech sector comes under increasing strain, not least because the Fed keeps increasing interest rates.
Chris Hood has more on that below. Let’s just say he has some strong opinions.
You won’t want to miss this one.
Keep Moving,
Any strategy that makes you money consistently is worthwhile.
Though many new traders believe that trading is primarily about indicators and tools, Chris maintains that it is at least 95% about emotional control.
This is especially relevant in this bearish, choppy market which has made the trading world extremely difficult.
Learn some pro tips to come back from your losses and stay in the game.
WORD ON THE STREET
SPAC King Dethroned, FedEx Cuts Costs, Boeing Pays Up
- End Of The Reign – Chamath Palihapitiya is ending two SPACs after few takers could be found for investments. The self-described “SPAC king” has suffered as the share prices of companies he took public have declined. The move is especially striking because earlier the companies had hinted they would seek more time to find investors. Now, they won’t even bother.
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We Can’t Say We Weren’t Warned – Just days after the CEO warned of a “global recession,” FedEx is cutting between $2.2 and $2.7 billion in expenditures. The company said demand is falling, but the nature of its business made it difficult to adjust quickly.
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Boeing Owes Millions Over Alleged Deception – In a settlement, Boeing (BA) will pay $200 million to put behind it claims that it misled investors after the crashes of two 737 Max jetliners. Then-CEO Dennis Muilenburg will also have to cough up one million dollars. SEC Chair Gary Gensler issued a statement charging that the company and its then-CEO had “failed in this most basic obligation” to “provide full, fair, and truthful disclosures to the markets.”
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Doomer Ichan Says End Is Nigh, Invokes Roman Empire – American financier Carl Icahn said that while there are still stocks worth buying in oil-refining and fertilizer, the “worst is yet to come.” He put the blame squarely on Washington for inflation. “We printed up too much money, and just thought the party would never end,” he said. “And the party’s over.” He also blamed inflation for the decline of the Roman Empire.
HOT SPOTS: What’s Going on in Geopolitics
- USA, Russia Face Off At The UN – American and Russian diplomats traded charges at a UN hearing over alleged war crimes in Ukraine. “The international order that we gathered here to uphold is being shredded before our eyes,” said American Secretary of State Antony Blinken. Russian Foreign Minister Sergey Lavrov didn’t bother to stick around for the full hearing and fired back during his own remarks. “The Kyiv regime owes its impunity to its Western sponsors, first of all Germany and France, but also the United States,” he said.
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UK May Already Be In Recession – The Bank of England increased its base rate by just 0.5%, lower than the 0.75% many were expecting. The reason why could be that the Bank is eager to avoid inflicting more pain on an already struggling economy, one the Bank said is already in a recession.
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Canada May End Vaccination Requirement – The Canadian government will reportedly end its vaccine requirement for visitors by September 30. Random COVID-19 tests will also end. But there will still be some annoyances – the mask mandate on domestic and international flights will reportedly remain in place.
CUTTING EDGE: What‘s Happening In Tech
- They’re On To Me – Sorry guys, you can’t just buy ebooks from Amazon and then return them after you’ve read them. After negotiating with The Authors Guild, returns will only be limited to those who have read 10% of a book or less. So if it doesn’t grab your interest by the first chapter, you’ve got a big decision to make.
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This Halftime Show Brought To You By Apple – The National Football League has reportedly agreed to a multiyear deal with Apple (AAPL) to sponsor the Super Bowl Halftime Show. The first Apple-sponsored show will take place on February 12, 2023. Apple says it will release details via its accounts on social media.
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Facebook Whistleblower Starts New Nonprofit – Frances Haugen, a former Facebook employee who slammed the company’s practices after becoming a whistleblower, has started a new nonprofit, “Beyond The Screen,” to make social media “healthier.” It will create an open-source database chronicling what the group sees as the failures of Big Tech companies to live up to their “legal and ethnical obligations to society.
FOR YOUR CONSIDERATION
Personally, I despise these idiots.
After all, their injection of several trillion dollars to prop up the market (quantitative easing) got us into the inflationary mess.
Now they plan to fix it by dragging us into a recession?
When the Powers That Be were assuring everyone that inflation was “transitory,” Dawn Report was saying they were full of it.
Unfortunately, we’re not happy to be right, because it could mean a recession.
Your Trading Coach Chris Hood breaks down how to react when the economy is falling apart.
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