Is the Party over for this Tech Giant – Facebook?

  • Jul 26, 2018 AEST
  • Team Kalkine
Is the Party over for this Tech Giant – Facebook?

Facebook (NYSE: FB) was lately seen to be on a sinusoidal trend with a heavy plunge followed by a slight rise as at July 25, 2018 as concerns on data privacy and warnings cited on revenues (to degrow by high single digits) and costs (to grow by 50-60%) with regards to performance in second half were seen to tear the group apart. Primarily, the monthly user data seems to be hit hard post the latest data privacy scandals. At the same time, another blow came from China. The group seems to have failed on the move on establishing a foothold in China once again, while second half performance has also been flagged to be debilitating.

Facebook has been banned in China for many years but the Silicon Valley company has always been determined to have its foothold in the censored market through someway or the other. What might be a recent trigger for Facebook to making its way into the market is a new app that has shown up in the country. The app according to Chinese app stores’ description works like the Facebook. It was earlier said that the app appeared to be a way for Facebook to test boundaries for an entry into China. On the other hand, executives from the company behind the colorful app, Beijing-based Youge Internet Technology, were photographed at a meeting with Facebook’s chief China representative and the Shanghai municipal government, and the app was however not indicated to be a product of Facebook. Even some Chinese developers created similar platforms in their place like Sina Weibo, which is on the similar lines of Facebook and Twitter, but this hasn’t stopped American tech giant from eyeing a piece of China’s huge market.

Facebook said that to groom and support the nation’s developers and start-ups, it aimed to set up an innovation hub. The new China hub for Facebook was slated to be opened in Hangzhou, which is also home to Chinese internet giant Alibaba Group Holding Limited, a major player in China’s mobile internet ecosystem and the owner of China’s two most popular e-commerce sites. Training and workshops to help developers and entrepreneurs were identified to be offered by the hub in the region to innovate and grow simultaneously. An initial investment of $30 million was indicated for financing of this subsidiary. The key aspect would still be coordinating with Chinese developers to move ahead in terms of setting presence in the market. The company has also established presence in countries including Brazil, France and India with the idea of expansion being kept strong.

The company was now aiming to expand its presence in China which is by size or number of users in the world’s biggest internet market, where its main platform of social network has been blocked by the government. Trying routes for selling ads to Chinese marketers and keen to reach international audiences to reportedly seeking offices for hardware staff, Facebook has been clear that it would like to re-enter China. Mr. Zuckerberg in a podcast interview with ‘Recode’ said that it was clear and there was no intersection between what Chinese government requires and what Facebook wants. Despite its key services being barred under Beijing’s strict censorship laws, FB was not shaken up in seeking access to the massive Chinese market, and even Google this year confirmed about opening a third office in Shenzhen.

The signs are that the government is not very comfortable with Facebook’s push into the country with its new hub in the capital of Zhejiang, Hangzhou which is a tech hub. From the website of China’s national enterprise credit information publicity system, Chinese media published screen shots of Facebook’s subsidiary’s official registration, but the same were later removed as of July 25, 2018. This has again raised concerns over the group’s presence amid the heightened US – China trade related issues. In fact, China’s national internet regulator, the Cyberspace Administration of China, has showed concerns over the approval and soon it appeared that China did not wait any further and the decision to take down the approval followed.

Facebook has always faced an upward battle between the stringent regulations and policing and entrenched competitive landscape; however, if they want the least resistance from China they might have to simply comply with the government rules, with regards to operating a server in China and should offer an amended version for only Chinese citizens.

At the moment, earnings’ warnings and the blow from China seems to be impacting the stock.

[pluginops_form template_id='23834' ]  

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.


All pictures are copyright to their respective owner(s) does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK