Facebook CEO Mark Zuckerberg in a post conceded that “some measures of engagement may go down.”
Here’s what the social network says will happen:
“Because space in News Feed is limited, showing more posts from friends and family and updates that spark conversation means we’ll show less public content, including videos and other posts from publishers or businesses.
As we make these updates, Pages may see their reach, video watch time and referral traffic decrease. The impact will vary from Page to Page, driven by factors including the type of content they produce and how people interact with it. Pages making posts that people generally don’t react to or comment on could see the biggest decreases in distribution.”
Facebook’s Jan. 3 breakout was problematic. The move came on only average volume. Investors should look for stocks breaking out on volume that’s at least 40%-50% above normal. Meanwhile, Facebook’s relative strength line, which tracks the stock vs. the S&P 500 index, did not confirm the breakout by rising to a new high. Even as the stock edged higher in the next few sessions, the RS line remained below prior peaks.
Facebook’s RS line hasn’t made much headway since late July, reflecting the stock’s in line or slightly lagging performance since then.
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