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Data: Company Filings; Chart: Axios Visuals

Facebook's business may be booming, but for the first time in the company's history, that doesn't seem to be enough to convince Wall Street its future is bright.

The big picture: Several Facebook executives have told Axios over the past year that big scandals — like the 2020 ad boycott, the Capitol siege, or the company's high-profile battle with Apple — have been the hardest challenges they've ever professionally faced. Now, Wall Street is having doubts, too.

Driving the news: Last week, Facebook continued to show resiliency during the pandemic, beating Wall Street forecasts on top and bottom lines and on user additions.

  • But despite that momentum, the company's stock sunk in after-hours trading amid fears that changes to internet privacy will hurt its ad business long-term.
  • A week later, the stock still hasn't recovered.

Flashback: This is notable because over the past two years, few hiccups have really spooked investors about Facebook, with the exception of the onset of the pandemic, which plagued most ad-driven businesses due to uncertainty.

By the numbers: Significantly more people distrust Facebook with their data than Google, Amazon, Microsoft or TikTok, according to a YouGov/Center for Growth and Opportunity poll shared exclusively with Axios.

  • Some 40% of 996 people polled saying they "completely distrust" Facebook on handling personal data.
  • 39% of 999 poll respondents said they think the world would be "better off" if Facebook was broken up.

Facebook does not appear on Fortune's annual list of most-admired companies, out yesterday. Apple has topped the chart for the 14th year in a row.

  • Facebook's ranking in a July 2020 Axios/Harris poll of corporate reputation rankings was No. 97 out of 100, down three spots from 2019.
  • A poll conducted by Pew Research Center in July 2020 said two-thirds of Americans think social media has a mostly negative effect on the country's direction.

The company is facing several existential crises that are starting to weigh on investor confidence:

  • Activists and consumer groups argue Facebook played a role in helping to radicalize users that stormed the Capitol on Jan. 6. A new WSJ report finds that Facebook knew its groups were being weaponized to plan violence. The tech giant said last week it would stop recommending that users join civic and political groups as a result.
  • A high-profile battle with Apple has Wall Street concerned about Facebook's advertising business over the long term. Facebook warned investors that changes to Apple's user tracking feature will likely impact its ad business.
  • Regulators are circling the tech giant with antitrust concerns. The Federal Trade Commission and state attorneys general have sued Facebook for allegedly illegally stifling competition, and Facebook has been the subject of multiple congressional investigations and inquiries, with pressure ramped up after the Jan. 6 Capitol riot.
  • Amid wavering confidence, Facebook is shipping some of its hardest content moderation decisions out, and its external Oversight Board already overturned some of its previous calls to take down content.

Yes, but: Facebook is still richer than ever.

What to watch: Facebook isn't the only platform that will be affected by Apple's changes and new regulatory threats. But it is uniquely exposed to risk from both.

  • It will be telling whether or not investors are spooked by how these issues impact Facebook's rivals, like Google, Snapchat, Twitter and others. Google's stock has skyrocketed since Tuesday, when it revealed its Q4 earnings results.

Go deeper

Big Tech's banner 2020

Data: FactSet, company filings; Chart: Andrew Witherspoon/Axios

Four of the country's biggest technology companies — Apple, Alphabet, Facebook and Amazon — had the most profitable year on record.

Why it matters: Turns out the only thing better for Big Tech than the normal economy is the pandemic economy.

Feb 3, 2021 - Technology

TikTok will prompt users when videos are flagged as misleading

TikTok

TikTok will begin asking users to seek credible information about a topic if they try to share a video that carries a misleading information label, the company announced Wednesday.

Why it matters: It's one of the most dramatic steps TikTok has taken to reduce the spread of misinformation on its platform.

Ina Fried, author of Login
16 mins ago - Technology
Column / Signal Boost

Huawei sanctions snarled chip supply chains

Illustration: Sarah Grillo/Axios

The largely successful U.S. effort to hobble China's Huawei has benefitted a host of other tech companies — from smartphone makers such as Apple and Xiaomi to chipmakers like Qualcomm to network vendors including Nokia and Ericsson.

Yes, but: The massive disruption to the industry furthered an industry wide mismatch between supply and demand, exacerbating the global chip shortage.