Facebook shares have been facing pressure, in the wake of news that they ran adds during the 2016 Presidential Election that were purchased by Russian operatives.  Many have been looking for a link that showed that Russia actually played a role and finding the money trail has been an important part of the Special council’s initiative.  While Facebook continues to believe that it can and will participate in a productive manner in future elections, it remains to be seen whether the country can trust the ads set up by this company.

Facebook Hands Over Data

Last week, news was reported that Facebook had given special counsel Robert Mueller, data about Russian advertisements that were purchase by Russian operatives in an effort to sway the 2016 U.S. Presidential election.  The company appears to be cooperating with the Special Council and prior to this had refused to turn over information to the congress, as to avoid having multiple groups request and analyze the same data.

The issue is that Facebook and the Government are now in unchartered waters. The company said that in 2016 phony accounts were set up on Facebook which originated in Russia. These accounts purchased $100,000 worth of advertising during the election cycle. Copies of the advertisements were obtained by the special council along with the purchase orders.

The advertisements included a false anti-immigration rally in Idaho, urging Americans to take action, which showed the extent of the Russian activity on the Facebook social media platform. The ads were targeted to insight people on Facebook, but surprisingly this has not been condemned by the Trump administration.

The Senate Has Facebook in Their Crosshairs

This weekend Senator Mark Warner, who is the ranking member of the Senate Intelligence Committee, said “I think what we’ve seen so far from Facebook is only the tip of the iceberg.” Warner went on to say “I think there’s much more than 350-odd accounts that were involved in this process,”, as he discussed the Facebook adds. He also said that “I think it was much more than the simply one internet troll farm they found in St. Petersburg.”

Facebook will now be scrutinized and it will become much more difficult for groups that are not vetted to advertise especially if the information is pertinent to an election. Meanwhile the Special Council now has a lead to follow the money. The issue for the Special Council is whether there was collusion between the Russians and the Trump administration.

Facebook shares

Facebook shares are forming a topping pattern, and although there has been little information as of yet that could hurt their stock price, they are now in the crosshairs.  Momentum on the stock price has recently turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the spread (the 12-day exponential moving average minus the 26-day exponential moving average) crosses below the 9-day exponential moving average of the spread. The MACD index moved from positive to negative territory confirming the cross over sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.