Billion-Dollar Fines Are Facebook’s Cost of Doing Business

Jon Swartz, reporting for Barron’s:

Facebook stock was up about 8% in after-hours trading after the social networking giant reported earnings for its fiscal first quarter, despite its disclosure of a $3 billion charge related to legal expenses.

The back story. What data and security controversies? They may dog Facebook in the news and on Capitol Hill, but investors barely seem to care. Facebook shares have soared 39% in 2019.

A $3-5 billion fine is something, but it’s not a deterrent to Facebook’s privacy crimes. They’ve just factored this in as a cost of doing business, and investors see it that way too. A $3 billion fine simply isn’t commensurate with the startling revenue that Facebook generates.

Thursday, 25 April 2019