For the first time ever last night, Facebook shares traded within touching distance of $200 – meaning that their market capitalisation is now an astounding $574 billion. The move higher is particularly interesting given a number of factors.

Firstly,  you will notice that the DOW Jones Index, the 30 largest US equities by market capitalisation, is some 1629 points from its all-time high, whilst the high tech NASDAQ index is just 39. Indeed, there seems to be what I’m calling a two tone economy emerging at the moment. This is where technology companies seem to be growing at an accelerated pace, whilst standard equities are performing mediocre at best, illustrated vividly in their bench march indexes. 

Secondly, the move to all-time highs in Facebook comes only months after the data protection situation concerning the uses of browsing data and then linked slightly more insidious to Cambridge Analytica (a situation where private data was harvested for alleged political influence). 

But generally the length and scope of how Facebook collects data from users amazes me. On average, a Facebook user who has been on the platform for 7-10 years will have around 600 Mb of downloaded data. This is roughly the same as 400,000 word documents. This content can range from things you ‘liked’ to locations you visited. Despite this information being released into the public domain by technology experts, this has not negatively affected Facebook or led to a decrease in the 2.19 billion or so individuals that use platform. 

My view was that this had the possibility to dramatically change the perception of Facebook and also its popularity which could have led to a fall in users and ultimately its ad revenue. The absolute opposite has materialised and is how we find ourselves trading at the all-time high.

Chief Trader,

Jordan Hiscott

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The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.

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