We sold our Facebook, Inc. stock late last year because we could not quantify the growing political risks across the world from so many different countries. To us, the risks outweighed the huge profits Facebook was earning. We worried that some country could “turn off” Facebook because it was being used as a tool to unseat a government.
It has been done in the Middle East with the Arab Spring. Facebook has been a tool to foster genocide in Myanmar, and its role in the past U.S. presidential election has been endlessly debated. The list of political activities that Facebook is mixed up in is huge.
The company always says it will try to do better. Facebook hides behind a similar argument that the gun lobby uses: “guns don’t kill people, people do”. The answer to that line of reasoning is to control guns. We all know how messed up that debate is and restricting free speech on Facebook isn’t going to be any easier. Politicians can say what they will but it’s not law until they agree, and that rarely happens. Facebook will continue to make apologies and promises for its user’s bad behaviour (politicians included), but don’t expect any real change.
Facebook will, however, be forced to correct the bad behavior of their own doing. But, they will find new ways to offend and the fines, taxes, and regulations will grow. Just like getting a parking ticket, the fine is enough to bother us but not enough to stop us from parking illegally. This ultimately suits the government just fine. They are looking for new ways to spend and they can’t print all the money.
Facebook goes to war against the government
The government makes money and controls the system, it’s their system. When someone wants to change their system it usually leads to war. Facebook is fighting battles on multiple fronts in multiple countries and is being used as a tool to change the government. One might expect that it cools down its aggressive expansion plans fueled by its “move fast and break things” credo. Nope!
Facebook now wants to effectively create a new form of money, called Libra. What makes it such an audacious, in your face act is that they could do it. They have 3 billion users (could we call them citizens?) around the world, and a lot of those users might find Facebook’s currency attractive. Facebook is proposing creating a global currency and banking system. That’s war. The timing of it? Definitely questionable.
We have no idea if, when, and in what form Facebook’s currency proposal may evolve, but we continue to marvel how this amazing profit-generating machine takes aim at the government.
In the end, we invest not to make the greatest return but rather a return that is reasonably assured given the risks we can understand. We admire Facebook and all its creativity, but their arrogance and dismissal of history will keep us on the sidelines.
One thought on “Is Facebook Flying Too Close To The Sun?”
From the outset I was leery of Facebook… and though I explored it, I soon withdrew. Thank you for this crisp definition of their “corporate strategy”and it’s impact.