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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: 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.

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