According to a report by equity research firm Pivotal Research Group (PRG), it is very likely that Facebook is going to experience a turbulent 2019. As CCN reports, “The research firm lowered the price target of Facebook’s stock from $125 to $113, reducing the social networking giant’s downside potential from its close on Friday by 18%.”
Without doubt, Facebook didn’t have a great 2018. Various accusations about use of data, as well as data breaches and interrogations by the UK and US governments would seem to indicate that the media firm faces some kind of regulatory measures. However, what form these might take is unknown.
Brian Wieser, a Senior Analyst at Pivotal Research, spoke to Bloomberg on why the group slashed Facebook’s price: “The list of problems the company is grappling with is vast, including complicity in genocide, enabling social and political instability in different countries around the world, the unwitting sharing of consumer data and antagonized legislators in the US, the UK, Europe and beyond.”
Wieser predicted that both Snapchat and Facebook would face problems in 2018, which proved to be correct, and now he believes that there will of necessity be major changes in the company leadership. He said the increased level of scrutiny and imminence of regulations in 2019 makes it ”difficult to imagine that the company’s Board will allow a status quo for the Chairman, CEO and COO roles.”
PRG also believes that Amazon is on track to become the third major force in digital advertising, behond Google and Facebook, and it has set Amazons’ stock price at $1,920 for the end of 2019. This will represent a 22% increase from the e-commerce giant’s closing price of $1,575.39 on Friday. Wieser said:
“Despite its current massive size, we see Amazon’s opportunities as mostly unconstrained based on a successful track record of capitalizing on consumer and IT department spending.” He also states that Amazon’s advertising revenue is growing faster than any of its other revenue streams and that this could be another threat to Facebook’s dominance in 2019.