Facebook (NASDAQ: FB) is facing an existential test, and its leadership is failing to address it.
The consensus on what constitutes good leaders is that they admit mistakes, apologize quickly, show up where they're needed and show their belief in the company by increasing their personal equity stakes in it.
Facebook executives, in contrast, react to negative news with spin as well as efforts to bury that negative news. Throughout the last year, every time bad news has broken, executives have downplayed its significance. Look at its public statements last year about how many people had seen Russian-bought election ads — first it was 10 million, then it was 126 million.
Top execs dodged Congress when it was asking questions about Russian interference. They are selling their shares at a record clip.
The actions of Facebook execs now recall how execs at Nokia (NYSE: NOK) and Blackberry (TSX: BB) reacted after the iPhone emerged. Their revenues kept growing for a couple years -- and they dismissed the threats. By the time users started leaving in droves, it was too late.
There's no outside attacker bringing Facebook down. It's a circular firing squad that stems from the company's fundamental business model of collecting data from users, and using that data to sell targeted ads. For years, users went along with the bargain. But after almost a year of constant negative publicity, their patience may be waning.
Meantime, as the day and week begin on trading markets, Facebook shares plummeted $8.67, or 4.7%, to $176.42, within a 52-week trading range of $137.60 to $195.32
Tech Insider
