Photographer: Johannes Berg/Bloomberg
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Why the Street's Biggest Facebook Bear Just Got More Bearish

Pivotal Research Group cuts their target price on increasing growth risks

Why the Street's Biggest Facebook Bear Just Got More Bearish

Pivotal Research Group cuts their target price on increasing growth risks

Photographer: Johannes Berg/Bloomberg

There was everything from smart mailboxes to walking cars. Journalists, executives and tech junkies all descended on Las Vegas strip for the 2019 Consumer Electronics Show this week. The annual event that shows off the industry's latest innovations attracted over 200,000 people. On What'd You Miss This Week, Scarlet Fu and Caroline Hyde spoke with Verizon CEO Hans Vestberg from CES.

The chief executive of the largest wireless carrier in the U.S. discussed both the hurdles and opportunities that came with their rollout of residential 5G. Vestberg said Verizon was already two years ahead of schedule on the technology, which he called "a quantum leap when it comes to speed." The initial plan was to launch 5G in 2020, but Vestberg said they felt there was an impetus to act now. This is "a very important market for us to build on," the chief executive said, and predicted Verizon would see meaningful revenue from 5G by 2020.

Alicia Levine, the chief strategist at BNY Mellon Investment Management, came on to talk to discuss the FOMC minutes after their release on Wednesday. Levine said she was "happy to see there was caution in the minutes, because it means the market didn't mug the Fed." Before the release, Levine had been most concerned about a possible messaging issue between the central bank and the markets. "The market has been much more dovish than the Fed this entire rate cycle," she said. "We've seen what happens when the Fed collides with the expectations." Despite the "slaughter" during the last week of the 2018 trading year, Levine said the market rout then was overblown and that her forecast for the start of this year remains positive.

Then Wall Street's biggest Facebook bear came on to talk about why he is even more bullish about the social media giant. Brian Wieser, a senior analyst at Pivotal Research Group, cut his price target on the stock to $113 per share. "We haven't gotten anywhere close to bottom yet," Wieser said. The company is "broken from the top down" and "doesn't seem to fully acknowledge the scale of the problems that it faces." Wieser predicted that Facebook chairman, CEO and co-founder Mark Zuckerberg's problems will only worsen this year. The social media company has not fully priced in the cost of policing content and still has to deal with the threat of regulation, particularly from the European Union, Wieser explained. "You still have governments wanting to throw the book at them." Wieser warned "if [the E.U.] wants to break up Facebook, they can in different forms." "Facebook is not well-positioned for that," Wieser said.

Fabio Savoldelli, an adjunct professor at the Columbia Business School, joined to discuss the rough year for hedge funds: the good, the bad and the ugly. "Investors are not going to be thrilled with joy with these results." Savoldelli said there was an extraordinary symmetry to performance over the past two years with funds trading wins and losses. "Very, very few funds that were up more than ten percent this year weren't down last year," he said. On the reverse side, a lot of the funds that were up ten percent or more in 2017 were down this past year. Macro-hedge funds are "supposed to be trading this kind of a thing," Savoldelli said. "The guys that should be able to deal with these things on a year-to-year basis aren't responding."