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posted by takyon on Monday April 16 2018, @08:01AM   Printer-friendly
from the BUY-LOW! dept.

Why You Should Buy Facebook While It's In Crisis (archive)

In spite of the headlines, the hearings, and the hashtags, it does not look like many users are leaving Facebook. A survey conducted by Deutsche Bank concluded that "just 1% of respondents were deactivating or deleting their accounts." If the survey is representative of Facebook's 2 billion users, then 20 million users might leave. This may seem like a big loss, but it means 99% of users are staying.

Doug Clinton, the managing partner of Loup Ventures, estimates that each active user generates about $21 in profits for Facebook each year. The loss of 20 million users would therefore reduce Facebook's earnings by roughly $420 million. Facebook's pretax income last year was $20.5 billion. Does a 2% drop in pretax income justify a 9% loss of market value? I don't think so.


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  • (Score: 2) by Thexalon on Monday April 16 2018, @12:18PM (6 children)

    by Thexalon (636) on Monday April 16 2018, @12:18PM (#667594)

    invest in a company known for exploitation!

    Umm, can you find a publicly traded company not known for exploitation? Exploitation is what companies do: Exploiting the environment (and thus the people that live near them), exploiting their employees (by underpaying them), exploiting their customers (by overcharging them, often by trickery), exploiting the government (via bribery) ...

    If you don't know how the company you're a shareholder of is exploitative, that's almost definitely because you haven't thought about it.

    --
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  • (Score: 1) by khallow on Monday April 16 2018, @12:56PM

    by khallow (3766) Subscriber Badge on Monday April 16 2018, @12:56PM (#667604) Journal
    Exploitation isn't really that big a deal in the first place. I bought some red pens from Staples the other day. I exploited Staples by underpaying for those red pens and they exploited me by overcharging for the same. That's what any voluntary trade is about in the first place - mutual exploitation for mutual gain.
  • (Score: 3, Interesting) by Bobs on Monday April 16 2018, @01:18PM (4 children)

    by Bobs (1462) on Monday April 16 2018, @01:18PM (#667612)

    can you find a publicly traded company not known for exploitation?

    FYI: A 'good' company example is Costco.

    Highlights:

    • Costco doesn't mark up any item more than 15 percent. Membership fees give it some financial freedom to keep prices low, along with its tough negotiations with vendors.

    • Costco doesn't mark up its executive pay by much, either. CEO Craig Jelinek earned $5.4 million in compensation in 2013, compared to $26 million that year for Wal-Mart CEO Doug McMillon.

    • They

      "understand that doing good business can and should be based on treating workers with respect. They understand that prosperity is based on a strong middle class and a strong middle class is only possible if workers are appropriately well-paid."

      From http://www.heraldnet.com/opinion/costco-understands-its-role-as-a-good-corporate-citizen/ [heraldnet.com]

      "Costco pays hourly workers an average of $20.89 an hour, Businessweek reports. That compares to $12.67 an hour for Walmart. And about 88 percent of Costco employees have health insurance from the company.

      "I just think people need to make a living wage with health benefits," Jelinek told the magazine. "It also puts more money back into the economy and creates a healthier country. It's really that simple."

      About 15 percent of employees are unionized, but you don't see the same type of battles that other companies have with unions. "They are philosophically much better than anyone else I have worked with," a Teamsters executive tells Businessweek."

      - https://www.cbsnews.com/media/12-things-about-costco-that-may-surprise-you/5/ [cbsnews.com]

    More on Costco
    - https://www.fastcompany.com/1042487/ceo-interview-costcos-jim-sinegal [fastcompany.com]

    Nobody is perfect, but Costco is quite good.

    • (Score: 2) by Thexalon on Monday April 16 2018, @04:48PM (2 children)

      by Thexalon (636) on Monday April 16 2018, @04:48PM (#667692)

      Costco's exploitation is right there in what you quoted:

      its tough negotiations with vendors

      So, in essence, Costco is using its market position to exploit its vendors. Which has further consequences along the supply chain, and of course to employees of those vendors.

      I should mention that most companies will swear up and down that they aren't being exploitative, and spend various amounts of marketing and public relations dollars on getting that message out to the press. They're generally lying when they do that, and the way you know they're lying is that their shareholders would never put up with it if they weren't.

      --
      The only thing that stops a bad guy with a compiler is a good guy with a compiler.
      • (Score: 3, Insightful) by Bobs on Monday April 16 2018, @06:00PM

        by Bobs (1462) on Monday April 16 2018, @06:00PM (#667729)

        FYI: "Exploit" isn't necessarily a pejorative.

        Costco makes most of its profits from the member's annual membership fees, not from price gouging.

        Since Costco forces itself to limit the margin it charges on products (15%, see above), driving vendors to reduce prices reduces Costco's revenues. So vendor their supplier charges less, Costco charges less. The emphasis is on providing quality products, not on cheap/shoddy ones with an outrageous markup.

        FYI: People in Hawaii love Costco, because they charge the same prices there as on the mainland, not adding in huge markups for shipping like other vendors.

        And nobody is forced to sell to Costco.

      • (Score: 2) by darkfeline on Monday April 16 2018, @08:03PM

        by darkfeline (1030) on Monday April 16 2018, @08:03PM (#667775) Homepage

        God forbid businessmen negotiate business. Everyone knows that the modern business negotiation involves a 10% cut for both parties right before a trip to the golf course, marked off as a business expense.

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    • (Score: 4, Interesting) by bob_super on Monday April 16 2018, @05:16PM

      by bob_super (1357) on Monday April 16 2018, @05:16PM (#667709)

      > Costco doesn't mark up its executive pay by much, either. CEO Craig Jelinek earned $5.4 million in compensation in 2013

      In the early 2000s, I worked for a $3B company, worth well over $20B, and the CEO was paid under $300k. Sure he owned almost 10% of the stock, so he didn't need it, but that meant that the whole C-suite, who were barely stock-millionaires, was also paid in the 200k range.
      Oddly, they didn't have any issues filling positions despite those low low wages.