In case you haven’t heard, Facebook (FB) is hosting a two-day developer conference this week called F8, which can be live video-streamed on Facebook Live. Some big product announcements are expected, and ordinarily, those might move the needle for FB stock. But this year, dark clouds cast by another video that appeared on Facebook on Easter Sunday could make any big jumps in FB difficult.
On Sunday, a man named Steve Stephens shot and killed 74-year-old Robert Godwin Sr., recorded it with his smartphone and posted the presumably horrific video (I refuse to watch it on principle) on Facebook. Millions of people have watched the video, shared it with others, Tweeted it out, etc. It took Facebook more than two hours to pull the video.
For its part, Facebook has issued a public mea culpa, admitting it “needs to do better” in preventing videos like that from appearing on its site. Vice president Justin Osofsky said it is working to flag videos of crimes or other graphic acts faster. Still, plenty of damage has already been done.
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Not to FB stock, mind you. Facebook shares were actually up slightly on Monday and early Tuesday despite all the bad press and accompanying social media outrage. It could be that investors aren’t sure what to do with FB stock in the wake of something so horrific; most seem to be taking the wait-and-see approach, standing pat with their Facebook positions until the public handwringing blows over. This, after all, isn’t the first time a serious crime has been posted on Facebook.
In January, three Swedish men allegedly raped a woman and streamed it live to a private Facebook group. In February, the murder of two radio journalists in the Dominican Republic aired on Facebook Live. Last summer, a woman in Minnesota recorded video of her boyfriend being shot and killed by police during a traffic stop, and posted it on Facebook.
There’s a much deeper issue at play here about the outsized and dangerous role social media plays in today’s society. But this is an investment website, so that’s what I’ll stick to. Perhaps because of its considerable clout on Wall Street, Facebook stock has yet to suffer a single scratch through this string of disturbing videos being broadcast on its site. FB stock is up more than 23% year to date, and remains one of the market’s great growth stocks. But the latest video has certainly thrown some cold water on Facebook’s F8 event, regardless of what cool new products Mark Zuckerberg rolls out.
Looking at the bigger picture, video has become an extremely popular function on Facebook in recent years. Last year, Facebook users watched 100 million hours of video per day. While Facebook is still in the early stages of monetizing video—unlike YouTube, Facebook doesn’t force you to watch a commercial before every video—its potential with advertisers is immense, as evidenced by its decision last year to allow publishers to air videos that are sponsored by advertisers.
Given that potential, Facebook isn’t likely to get rid of video anytime soon, if ever. But there are very ugly consequences to allowing anyone with a Facebook account to post a video.
So far, however, there haven’t been consequences for FB stock.
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