Fun fact... Facebook's stock price is just 5.5% away from its record high. That's despite Wednesday's big official settlement with US regulators for handing over 87M users' personal details to Cambridge Analytica.
Facebook knew this was coming... So it guestimated back in April for investors that a $3B-$5B fine was coming. It even put money aside to prep for the government's hammer. A+ for FB's forecasting department.
- The fine: $5B. Even though that's a record fine from the FTC, it's equal to less than 1% of Facebook's net worth (when measured by its $577B value by market capitalization).
- Strings attached: Hardly any. A huge criticism is that the privacy of 2B humans is controlled by 1 human — Mark Zuckerberg — who owns majority voting power at FB. This settlement installs a new "independent privacy committee" within the board that he'll have to check in with monthly.
- Personal accountability: A tad. Zuck must personally certify (with a real-life signature) every quarter that his company is following every privacy order from the settlement. Pinky swear.
BTW, Facebook also announced profits. Big ones... In the Western world, we're obsessed with Facebook-owned Instagram, which doesn't have Zuck brand baggage. In the rest of the world, Facebook's rep is fine and people use WhatsApp and Facebook at a carpal tunnel-inducing pace. Facebook's investigations aren't over, but they've barely slowed it down so far. Here are the Q2 highlights.
- Revenues up 28% to $16.9B
- Operating profit up 14% to $6.6B (if you exclude the big fine)
- Monthly users up 8% to 2.4B