Facebook Inc. (FB) is trading at a four-week low in Monday’s pre-market after pushing back on White House accusations that COVID-19 misinformation on the platform is “killing people”. The allegation set off a political firestorm in the United States last week, with conservatives accusing President Biden of seeking control of the online service in order to silence critics. Meanwhile, liberals are backing the President, frustrated by a long-standing contentious relationship with CEO Marc Zuckerberg.
Pouring Gasoline on the Political Fire
White House press secretary Jen Psaki ignited the political controversy on Thursday, alleging that Facebook is “not doing enough to stop the spread of misinformation about the virus and the COVID-19 vaccine”. Biden poured gasoline on the incendiary criticism ahead of the weekend, insisting “They’re killing people. I mean, it really – look, the only pandemic we have is among the unvaccinated and they’re killing people.”
Facebook fired back this morning, insisting it “was not the reason the 70% vaccination goal was missed”. The release noted that “data shows that 85% of Facebook users in the US have been or want to be vaccinated against COVID-19. President Biden’s goal was for 70% of Americans to be vaccinated by July 4. Facebook is not the reason this goal was missed. Since the pandemic began, more than 2 billion people have viewed authoritative information about COVID-19 and vaccines on Facebook”.
Wall Street and Technical Outlook
Wall Street consensus hasn’t reacted to recent political events, maintaining a ‘Buy’ rating based upon 40 ‘Buy’, 3 ‘Overweight’, 8 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $275 to a Street-high $460 while the stock is set to open Monday’s session more than $55 below the median $395 target. This humble placement suggests the pullback will offer a low risk buying opportunity in coming weeks.
Facebook broke out above the August 2020 high at 304.67 in April, entering a strong trend advance that stalled above 355 in June. Two breakout attempts since that time have failed, giving way to a decline that’s now testing short-term support near 337. The selloff could stretch into the 50-day moving average at 334 while the risk of even lower prices will remain high through next week’s Q2 earnings report, which has the power to trigger a larger-scale decline.
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Disclosure: the author held no positions in aforementioned securities at the time of publication.