It Takes More Than a Little Scrutiny From Congress to Bother Facebook BullsBy and
Facebook may face a grilling by suspicious lawmakers today, but in the stock market skepticism remains in short supply.
Investors yawned as the firm’s executives went to the Hill to discuss Russian meddling in the 2016 presidential election. After earlier touching an intraday record of $180.80, shares of the social networking site traded little changed on volume a third lower than the three-month average. Up 56 percent this year, Facebook is the third-best performer among the top 100 American stocks by value and on course for biggest rally since 2013 relative to S&P 500.
Bulls have gotten used to looking past the regulatory risk rippling through the tech industry. While companies such as Facebook and Google are being faulted for failing to keep Russia from exploiting their networks, money keeps flowing into the sector that’s boasting the fastest profit growth. Facebook, due to report results Wednesday, is expected to deliver a 56 percent jump in third-quarter earnings.
“With two months left in the year, investors just can’t afford to sell Facebook,” said Matt Maley, Miller Tabak & Co. equity strategist. “The congressmen will probably pound on the table and make it a big issue out of the testimony, but it’s going to be one of those things that makes headlines for a couple of days and then disappears. Investors have seen this all before.”