Pivotal Negative on Facebook (FB) Citing Overstated Ad Reach

Pivotal Research analyst Brian Wieser maintains Sell on Facebook (NASDAQ: FB) price target of $140.00.

The analyst comments reports that the company is over stating its ad reach by 30-50% according to a lawsuit filed by previously employees.

He comments "A lawsuit related to reach data in Ads Manager and new reporting on how Facebook ignored concerns related to its contribution to problems in Burma further illustrate systemic problems with the company."

Further addressing the Burma issue Wieser comments "New reporting from Reuters on Wednesday was further damning for the details it described about warnings Facebook senior management received as far back as 2013. Facebook has acknowledged that it was too slow to respond, but as Reuters reported, only last week their reporters were able to find “more than 1,000 examples…of posts, comments, images and videos attacking the Rohingya or other Myanmar Muslims that were on Facebook as of last week” advocating genocide or other dehumanizing actions. In the article, Facebook acknowledged that “all of it violated our policies.” With only 60 moderators for a user base of 18 million, Facebook’s efforts clearly seem insufficient to avoid further problems in the region."

For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.

Shares of Facebook closed at $174.70 yesterday.

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