On November 8, a hearing was held by the European Parliament’s Internal Market and Consumer Protection Committee in which whistleblower Frances Haugen testified against the growing power of the Big Tech companies, especially Meta Platforms (previously Facebook) (FB).
To put things to context, Haugen is a former employee of Meta, who revealed to Wall Street Journal in early September that Meta was quite aware of the spread of misinformation, hate, and other unethical activities that take place on its platforms, but does not stop them, to suit its own interests.
Interestingly, the recent rebranding of Facebook to Meta was also a matter of displeasure that was brought up at the European Parliament hearing, portraying it as a lack of responsibility from Meta’s end to focus more on growth rather than addressing the company’s innate issues.
Notably, the hearing was treated as urgent because it would help the European Parliament strengthen the Digital Services Act (an act to protect the fundamental rights of users of digital services) that is awaiting an official date for vote. (See Analysts’ Top Stocks on TipRanks)
Website Traffic Shows a Decline
These past few weeks have clearly been tough on Meta, and that has reflected in the drop in traffic to its platforms. How do we know this?
TipRanks’ new Website Traffic tool, which sources its data from Semrush (SEMR), can help traders see the website traffic volume and trends for their companies of interest.
As we dove into the data, we saw that so far into Q4, there has been a sharp drop in consolidated virtual visits to Meta’s platforms, which include Facebook.com, WhatsApp, Instagram, novi.com, and business.facebook.com. Total visits from unique users to the platforms from all devices have sharply declined sequentially by 65.9%. Moreover, the share price is also on a downward slope so far into Q4, having declined 2.9%.
However, if we look at the quarter-to-date period of last year and compare it with the quarter-to-date period of this year, we see a 13.9% increase in unique visitors to Meta’s websites. Moreover, unique visitors on a year-to-date basis have risen 13.8% from last year’s corresponding period.
Experts Opine
These issues, however, do not seem to affect Monness Crespi Hardt analyst Brian White, who reiterated a Buy rating on the stock, with a price target of $460, following the hearing. “In our view, the concept of a metaverse is intriguing; however, we believe only those companies that have earned society’s trust will prove successful in this new virtual world,” said White.
Turning to Wall Street, the analyst consensus is also optimistic about Meta, with a Strong Buy rating based on 29 Buys, six Holds, and one Sell. The average Meta price target of $405.59 indicates an upside potential of 22.4%.
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Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
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