Why Facebook Stock Popped Today - Motley Fool

diamtot.blogspot.com

What happened

Shares of Facebook (NASDAQ:FB) stock rose a modest 2.3% in 3 p.m. EDT trading Monday.

That may not sound like much, but on a $1.1 trillion dollar stock, it works out to $25 billion in extra market capitalization. (For context: If Snap moved that much in a day, its stock would be up more than 17%!)

AI face looming over a man at a computer screen

Image source: Getty Images.

So what

What sent Facebook shares up so much?

This morning, Facebook announced it will begin asking Instagram users for their birthdays (Facebook owns Instagram). As the company went on to explain, Facebook needs "to know how old everybody is on Instagram" in order to "create new safety features for young people."

Facebook said that knowing a user's age will permit it to, for example:

Prevent adults from messaging minors they don't follow.
Restrict advertising to users under age 18.
Show ads that are more relevant to a user's age.

Now what

At least two of those announced purposes do seem aimed at safety for young people. The third might be more aimed at generating better ad sales for Facebook.

Be that as it may, whatever Facebook's motivation, the company's announcement clearly means more data for Facebook, and as an information company, that's something that will probably make Facebook more valuable.

Speaking of which, Facebook clarifies that it will be requesting birthday information only from users who have not already provided it. Those users will be asked repeatedly to provide the information until they finally consent -- or find themselves unable to use Instagram. However, Facebook also knows that "some people may give us the wrong birthday." (Surprise!) But that gambit might not work as well as you think it does.

Going forward, Facebook will be using artificial intelligence to estimate how old people really are based on the content of their posts. And lest you think you can still outsmart Facebook: "If someone tells us they're above a certain age, and our technology tells us otherwise, we'll show them a menu of options to verify their age."

In short: Big Brother isn't just watching you. Now it's counting the candles on your birthday cake, too.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Adblock test (Why?)