Factors That Influence The Value Of Facebook For The Worse

1064 WordsNov 7, 20165 Pages
Upon research, there are numerous factors that influence the value of Facebook for the better and for the worse. This analysis looks at such factors as the economy, changes in consumer spending, interest rate, inflation, oil price fluctuations, and changing foreign and political situations. Most importantly, when it comes to a social media company such as Facebook, the nature of the foreign and political situation appears to be the most obvious factor influencing its valuation as a company. Repressive regimes such as China, North Korea, and Iran severely restrict access and limit user engagement that adversely impacts financial revenue and reduce shareholder’s equity. Although other factors are less obvious, they also play a strong part in influencing Facebook’s value. One of the important factors play a strong part in influencing Facebook’s value such as currency risks related to the revenue and operating expenses denominated in currencies other than the U.S. dollar. For example, foreign currency exchange rates and oil price volatility can reduce company profits and lessen shareholder equity. Currently, the U.S. dollar compared with the local currency in other countries such as Russia, Venezuela, Algeria, Angola, Nigeria is very strong in terms of the exchange rate, based on the oil and gas and political situation. Accordingly to the 10K report posted in SEC, Facebook recognizes foreign currency losses of $66 million, $87 million, and $14 million in 2015, 2014, and 2013,

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