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World calm following Facebook crash

By: Market Intelligence Center
Posted: 6/19/2014 10:57:00 AM
Referenced Stocks: FB;LNKD

"Sorry, something went wrong."

Such was the error message seen by users in the U.S., U.K., Ireland, Israel and India when they attempted to log on to Facebook ( FB ) during a brief (approximately 30 minute) outage this morning. At present, Facebook has released no information about what may have caused the outage, and while I'm no programmer, I suggest that they might want to look at whether the issue is specific to countries the names of which begin with the word "United" or the letter "I."

Although the issue is being hotly debated this morning, it is unlikely that the technical glitch will have much effect on the price of FB stock. If it were to happen again, however, it might suggest that the huge social media platform had become unwieldy or unstable in a way the company didn't know how to handle.

At present, the small outage is only news because of the regular-even obsessive extent to which some users rely on the site, and as such, it is more a reminder of Facebook's strength than a suggestion of weakness. In the past few weeks, social media stocks including FB, LinkedIn ( LNKD ), and even beleaguered Twitter ( TWTR ) have been rallying, although given the rise in the broader market, it isn't clear whether or not this reflects growing investor optimism in the sector.

Investors who wish to invest in the sector are cautioned to pick their ponies carefully. Some of the players here may ultimately find they have nowhere to play.

Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC .

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