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Facebook Inc. announces third-quarter results on Oct. 29.
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Facebook Inc. is in heavy damage control as it nears earnings season.
The company’s cleanup of content mere weeks before the Nov. 3 election is as much about branding and future earnings as it is about civic responsibility. The company’s recent moves to tamp down or eliminate misinformation from the likes of QAnon and Holocaust deniers is a direct contrast to 2016, when right-wing conspiracy theories and disinformation coursed over the social-networking platform that reaches more than 2.7 billion people worldwide.
The latest manifestation occurred last week, when Facebook FB, -0.21% and Twitter Inc. TWTR, +0.08% limited or blocked the distribution of an unsubstantiated New York Post story about Hunter Biden, the son of Democractic presidential nominee Joe Biden, raising the ire of Republicans who complain social-media companies censor conservative-leaning content.
Earlier this month, Facebook said it will not accept ads that seek to delegitimize the results of the 2020 U.S. election or that speculate voting will lead to illegitimate outcomes. The company has also helped register 2.5 million people to vote, and it has helped 100,000 people sign up as poll workers.
Read more: Facebook to halt political ads in U.S. indefinitely after polls close Nov. 3
As Facebook prepares to report its third-quarter results on Oct. 29, the company finds itself navigating the Beltway as much as Wall Street. And it has traversed obstacles swimmingly: The company’s shares are up 36% in 2020, compared with a 7% increase by the broad S&P index 500 SPX, +0.52%.
Zuckerberg’s political awakening comes as the company braces for a complaint from the Federal Trade Commission, possibly this year, and he readies for testimony before the Senate Commerce Committee on Oct. 28 with the CEOs of Alphabet Inc.’s GOOGL, +1.30% GOOG, +1.38% Google and Twitter.
“Mr. Zuckerberg is now an active political operator. He has dined with President Trump, talks regularly with White House senior adviser Jared Kushner, and has pressed lawmakers and officials to scrutinize rivals including TikTok and Apple Inc. AAPL, -0.95%, people involved in the discussions say,” the Wall Street Journal reported last week.
The animus is bipartisan. On Monday, California Attorney General Xavier Becerra, a Democrat, sent a letter urging Facebook, Google’s YouTube, and Twitter to ” to do everything in their power to put a stop to election interference. These companies should take responsibility for their role in spreading misinformation and voter suppression.”
Last month, Biden’s campaign manager sent Zuckerberg a letter, calling Facebook “the nation’s foremost propagator of disinformation about the voting process.”
Still, Facebook — as it has consistently proven in the past — remains a Teflon stock because of its dominant position in social media, and vice-like grip, along with Google, of digital advertising. Facebook shares are up 27% this year, and 38% over the past 12 months.
“We estimate [Q3] ad revenue of +12% y/y vs. the better than expected +10% y/y in 2Q20 and guide of +10% y/y, with ad revenue led by [Instagram] Stories monetization, as well as Core [Facebook] and [Instagram] Mobile Feeds,” Cowen analyst John Blackledge said in an Oct. 8 note.
