Facebook, Apple, Amazon: Hot Stocks With Underlying Issues

Consider underlying issues for each company that keep being largely ignored as the great feast of buying rolls on. What’s the case, if there is one, for a bearish take on these 3 hot big name tech firms?

 

Facebook’s Trump problem. Mark Zuckerberg had such a good idea: convince folks that being in touch with family and friends on the Internet is cool. Meantime, he gets to collect all the data they provide and sell that information to — well, whoever wants to pay for it, without too much thought about how it might eventually be used.

 

It’s been fine with Trump in the White House and Mitch McConnell running the Senate — but how different will it be for Zuckerberg’s business plan if Democrats take power and begin to ask difficult questions? Would it have been wiser to keep a certain amount of distance from Donald Trump?

 

Apple and the closure of stores. The company had re-opened stores, but now is re-closing them, notably in the South. Forbes’ Rachel Sandler writes about it here: Apple Is Closing Stores Again In States With Rising Coronavirus Cases.

 

It’s not good if you’re in retail and you have to close lots of stores that you just re-opened. Customers can order online, of course and have things delivered, but the in-store experience is hard to beat if you want to help a customer upgrade correctly.

 

Or if you want to show them why certain new items can bring improved results. With products that Apple develops, missing that one-on-one in a store just down the street is an unfortunate outcome of the Covid-19 era.

 

Amazon has a p/e of 128. This is called “priced to perfection.” A p/e that high indicates that investors believe nothing can go wrong. You know what that means.

 

The most troubling problem for Amazon, almost entirely overlooked these days, is the prospect for antitrust suits coming down the pike. Forbes contributor Michael Lewitt wrote about it here in 2018: How Long Can Amazon’s Ingenious Antitrust Avoidance Last?