From Cambridge Analytica to multiple hacks and now to the company’s own executives walking away, Facebook has become a sort of pariah.
On one hand, you have CEO Mark Zuckerberg promising a more private and secure Facebook. On the other hand, you have a coloured history of breaches and leaks of private data that has soured public opinion of the once revolutionary social media platform.
The latest in this saga of controversy involves 11 senior managers who have abandoned Facebook for greener pastures, some just last week. Those include Chief Product Officer Chris Cox (the man who masterminded the News Feed) and Instagram co-founders Kevin Systrom and Mike Krieger.
During May of last year, Zuckerberg initiated a shuffle of management that gave him more direct authority over the company. This was not long after the Cambridge Analytica debacle, and it’s possible Zuckerberg was trying to grab on to the reigns of his company more tightly.
Trying to piece together what led to these managers leaving, it has to be the culmination of several events, one of them being this shuffle of positions at HQ.
It’s possible these employees had had enough with the bad publicity their company had been receiving and opted for a clean exit.
Perhaps Zuckerberg handing himself more control just made things worse. His judgment has been in question as of late, after all. His latest 3,200 word blog post emphasizes privacy and “ephemeral messages.”What does that mean exactly? Think Snapchat, but with text messages. That confession you sent to a crush? It’ll disappear after a short while. That warm Mother’s Day greeting your daughter has sent you? Also gone not long after. The specifics are still unclear, but this will be a complete direction shift for Facebook, which will be transitioning away from its News Feed component apparently.
Aside from its seemingly disgruntled ex-employees, Facebook’s stock has been a reflection of trouble in paradise for the multi-billion dollar company. “FB” Shares have lost 2.52% in value since Friday trading, as of this writing.
This drop was also triggered by troubling comments from Needham analyst Laura Martin, who said “We are concerned that regulatory, headline, and strategic pivot risks will negatively impact Facebook’s valuation more than investors currently believe due to the negative flywheel created by Network Effects.” “A Negative Network Effect suggests that departures will continue, and since we believe that people are a key competitive advantage of FAANG companies, this implies accelerating value destruction until senior executive turnover ends.”
According to CNBC, “Martin has a $170 price target on shares of Facebook, less than 3% from Friday’s closing price of $165.98.”
At the moment, Zuckerberg will have to prove to the media, public and investors that he knows what he’s doing, and that this new direction he’s chosen is the right one. Clear sailing, however, it won’t be.