Question

a) Facebook (ticker: FB) is a listed company on the NASDAQ. Look at the daily share price of the company for the period 1st January 2018 to 1st July 2018. Identify any major news, events or issues related to the company that impacted the share price by 5% or more on the day of release. You should include a price chart at bare minimum, with annotation, which clearly shows each major news impact on the price. Include at least two – five clearly labelled news events and why you believe they are important. .

b) Evaluate the news impacts that you’ve identified on the share price in part a (in the context of market efficiency) and provide an explanation as to what happened and why it impacted the share price in the manner that it did. Are there other considerations besides the identified news article that would impact Facebook’s share price? .

Answer 1

During the period the company has lost more than $100 billion in value, and its share price has dropped nearly 20 percent.

The drops appear to be the result of vast amounts of criticism and concern all around the world. From Europe's new data regulations to the cost of trying to deal with worries about Facebook's security, the company long held as a vast Wall Street success story appears to be running into problems.

Facebook's share price plunge came immediately after the company had announced its latest results. As soon as they were revealed, investors rushed to sell shares in the company.

The results were not simply bad this time around they came with a warning that Facebook might be hit by problems in the coming years, too, because of the costs of improving privacy safeguards and slowing usage in its biggest advertising markets.

There are a wide variety of possible reasons for those problems, many of which could impact the company for years to come. Here is a selection of some of those issues.

Facebook also makes its money by showing a wide variety of content, and collecting data about the people who are watching it. But both of those activities have come under threat in recent months, amid new concerns about how secure and private the site really is.