The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
If you type the phrase "Facebook is evil" into Google, you get about 249 million results. Interestingly, "the devil is evil" only yields 58.7 million results. And you only wind up with 17.9 million hits for "Justin Bieber is evil." (Happy Canada Day!)
But do you know what? Wall Street doesn't care that Facebook toys with its users. In fact, a big reason why investors may love Facebook's (FB) stock so much is because it has so much information about you, me and everyone else that's using the social network.
Facebook shares finished the first half of 2014 up 23%. Only three stocks in CNNMoney's Tech 30 did better: gaming companies Electronic Arts (EA), Activision Blizzard (ATVI) and smartphone turnaround story BlackBerry (BBRY).
I seriously doubt that too many people are going to stop posting obsessively on Facebook -- despite all the outrage about the study it conducted in 2012 where it tried to manipulate the moods of a small portion of its users.
Maybe I'm wrong though. Are you fed up with Facebook? If so, share your story by clicking here. We may use it in a future story on CNNMoney.
But as long as a billion plus individuals are updating their status and checking their News Feeds frequently, Wall Street won't care, either. That's because investors only care about two emotions: Fear and greed. The latter is currently the one most associated with Facebook.
Facebook's stock has done so well (after those awkward first few months following its 2012 IPO) because the company went from being one that was still struggling for ways to "monetize" its users effectively (especially on mobile) to a true digital advertising juggernaut like Google (GOOGL).
Just look at the numbers. That's what investors are doing. Facebook's revenue was just under $8 billion in 2013. Sales are expected to hit $11.8 billion this year and $15.6 billion in 2015, according to estimates from FactSet. That's phenomenal for a company this young.
When people talk about tech being a bubble, it's often because startups are getting gajillion-dollar valuations despite having little in the way of sales. Ahem, Uber! Ah-Airbnb-choo!
Obviously, Facebook is not in this camp.
Facebook is also obscenely profitable. Wall Street is forecasting annual earnings growth of about 35% a year for the next few years. And the company's net profit margin in 2014 is expected to be 32%. The S&P 500's projected net profit margin? Less than 10%.
It is clear that Facebook is a hit on Wall Street because advertisers want to be there. Facebook is no longer a question mark from a marketing perspective. Big companies have to have a social media presence. And Facebook, along with Twitter (TWTR), is the place to raise brand awareness socially.
Nobody likes being treated like a test subject. But Facebook users consent to this when they agree to the company's terms of service. As long as Facebook is a free site, advertising is going to be the main way the company makes money.
Mark Zuckerberg and the rest of Facebook's executives know that. So unless Facebook users vote with their fingers and decide to leave the service (as well as Facebook-owned Instagram) in droves, you can probably expect the company to experiment even more so it can find exactly the right information that it needs to boost ad revenues.
So does that make Facebook evil? Zuckerberg should proudly quote a line from classic heavy metal song made popular by fellow Bay Area natives Metallica. (Although that song was originally recorded by British metal group Diamond Head.) "Am I evil? I am man, yes I am!"
Rock on, everyone. Enjoy the original Diamond Head version. Warning. There are language issues. This is a heavy metal song after all.
This is the story of the road that goes to my house. Quick reader shout-out for a Twitter follower who won my "Name that Tune" challenge this morning. I tweeted about how the markets were off to a hot start on this first day of the second half of the year.
It's from a song by one of my favorite bands. And something tells me that Metallica probably wouldn't cover it. A little too folk-y.
Congrats, Kim. I'm also honored by your follow up tweet.
Being compared to The Decemberists' lead singer Colin Meloy makes me giddy. It's totally not true though. Until I start writing columns about chimney sweeps, sea shanties and Civil War battles, he'll always be more interesting than me.
But who says flattery will get you nowhere?
Stocks may be back near all-time highs, but traders were barely paying attention to the market Friday afternoon.
They took a break and turned their attention to T.J. Oshie and the rest of the U.S. men's Olympic hockey team, as they faced off against Canada in the semi-finals. Though the game resulted in a 1-0 victory for the Canadians, Americans were hopeful that Team U.S.A. would defeat its biggest rival.
The teams MOREHibah Yousuf - Feb 21, 2014 3:15 PM ET
Cue the Apple "iCahn" jokes. Apple's stock topped the $500 mark Wednesday for the first time since January. Shares moved higher for a second day on the news that activist investor Carl Icahn has taken a "large" position in the company.
Shares crossed the psychologically important level and climbed as high as $504.25 in afternoon trading, before settling just below the mark at $498.50.
Still, the recent gains have boosted Apple's value by MOREHibah Yousuf - Aug 14, 2013 4:10 PM ET
Facebook shares rallied an impressive 30% Thursday, allowing the stock to book its best one-day gain ever. And while shares remain about 10% below the May 2012 IPO price of $38, analysts are predicting that Facebook is finally on its way to reaching, and even crossing, that threshold.
"Facebook delivered its strongest quarter yet as a public company -- results that we think could be thesis-changing for many," said Doug Anmuth, a MOREHibah Yousuf - Jul 25, 2013 4:03 PM ET
Carl Icahn has yet to sell even just one share of his stake in Netflix, and for good reason: the stock is currently trading at a three-year high and may soon be on its way to an all time-high.
While shares of the usual high-flier bounced around the breakeven line Thursday, they've been having quite the run.
Shares of Netflix (NFLX) have rallied 10% over the past five days, and have nearly MOREHibah Yousuf - Jul 18, 2013 2:41 PM ET
Investors can't seem to get enough of Elon Musk, but the Tesla CEO's announcement failed to generate much excitement on Monday.
Will publish Hyperloop alpha design by Aug 12. Critical feedback for improvements would be much appreciated.
— Elon Musk (@elonmusk) July 15, 2013
Musk has been talking about the hyperloop, an idea for a rapid transportation system, for about a year now, but details have thus far been limited. At the recent D11 MOREHibah Yousuf - Jul 15, 2013 2:59 PM ET
Google has some competition in the race to $1,000 a share.
Priceline (PCLN) shares rose 2% to $910.51 in afternoon trading Thursday. The stock topped $900 Wednesday for the first time since the salad days of 1999. So far this year, Priceline is up 46%.
Not to be outdone, Google (GOOG) shares gained 1.5% to trade at a fresh record high above $919.
Wall Street has been eyeing four-digits for Google since February, MOREBen Rooney - Jul 11, 2013 3:27 PM ET
If Priceline (PCLN) could name its own stock price, it would probably take this one. Shares of the online travel company hit a 52-week high Monday, jumping 3% after Priceline received an upgrade from Morgan Stanley's analysts.
Morgan Stanley's analysts think Priceline's shares, currently trading around $880, can hit $1,010 as competition in the space declines. They also expect that Priceline has increased its market share of European travel.
Should Priceline's shares follow Morgan Stanley's predictions, shares MOREMaureen Farrell - Jul 8, 2013 1:55 PM ET
Tesla's stock soared into record territory Monday after the electric car maker received another upgrade from Wall Street analysts.
Tesla (TSLA) shares ended the day at a record $117.18, gaining more than 9%.
The rally came after analysts at Jefferies raised their price target to $130, saying the company is likely to report stronger-than-expected sales of the new Model S this year.
Tesla's stock price has exploded. It's gained a whopping 240% in the past MOREBen Rooney - Jul 1, 2013 4:45 PM ET
Shares of IBM fell sharply Friday, part of the fallout from Accenture's weak outlook.
Both companies are heavily invested in data analysis so any sign of weakness from either one raises worries about a broader slowdown in the sector.
Accenture cut its earnings outlook for the year and trimmed its revenue forecast for the fourth quarter.
A slew of analysts were quick to downgrade Accenture.
That doesn't bode well for Accenture's rivals, including IBM MORECatherine Tymkiw - Jun 28, 2013 11:31 AM ET
Not a member yet?Sign up now for a free account
|First U.S. penny sold for $1.2 million|
|More than half of middle-class kids fail to earn bachelor's degrees|
|Lufthansa will now keep two crew members in cockpits|
|It's official: Kleiner Perkins wins gender bias case|
|Samsung Galaxy S6: An iPhone for people who hate Apple|