The ongoing Facebook (NASDAQ:FB) ad boycott could snowball. A meeting between CEO Mark Zuckerberg and the groups behind the ad boycott campaign ended in disarray. Nearly 1,000 brands have suspended their advertising on Facebook in response to the #StopHateForProfit campaign.
Civil rights groups including the Anti-Defamation League, Free Press, and Color of Change sparked the ad boycott campaign. The groups accused Facebook of condoning hate speech and sharing misinformation on its platforms.
The groups had an issue with Facebook’s refusal to censor President Trump’s posts. Some people thought that the posts were inappropriate. President Trump posted about the 2020 presidential election and protests after George Floyd’s death, which angered civil rights advocates. While Twitter slapped President Trump’s posts with warning labels, Facebook left them untouched, which sparked a crisis moment for the company’s leadership.
On July 7, Mark Zuckerberg led other Facebook executives, including COO Sheryl Sandberg and Products Chief Chris Cox, in a meeting with the rights groups behind the #StopHateForProfit ad boycott campaign. The rights groups came out of the meeting fuming. They said that Facebook still doesn’t take their call for change seriously.
The brands that have responded to the Facebook ad boycott call include Coca-Cola, Unilever, and drug giants Pfizer and Novartis. Facebook derives most of its revenue from ad sales. Although the ad boycott will deny Facebook some ad revenue, Zuckerberg downplayed the financial risk. Wall Street thinks that Facebook could lose 5.0% of its overall revenue due to the ad boycott.
Beyond the Facebook ad boycott campaign
The Facebook ad boycott campaign has dominated the discourse in recent weeks. However, investors might want to know about Facebook. Notably, a technology startup that Facebook director and early investor Peter Thiel cofounded just filed for an IPO.
Palantir Technologies made a confidential filing with the SEC for the public offering of its stock. Palantir provides analytics software to governments and large corporations. The company’s clients include the CDC. Notably, the federal health agency uses Palantir software for coronavirus-related analytics work. Palantir wants to grow its revenue 35% this year to $1.0 billion.
In this past, Peter Thiel touched some things and turned them into gold. Facebook is an example of Thiel’s success. The stock has gained over 530% from its $12 IPO price back in 2012. Thiel’s other success story is PayPal, which he cofounded with Tesla CEO Elon Musk. Despite the ad boycott, Facebook is one of the tech stocks that’s in demand this year. Facebook shares have jumped 45% over the past three months.
PayPal shares have risen 75% over the same period. Therefore, with Peter Thiel behind Palantir, the IPO will be interesting to watch.