The last couple of years have been very interesting for Facebook (FB). On one hand, they have been extraordinarily successful financially (revenue grew from $27.6 billion in 2016 to nearly $56 billion in 2018). On the other hand, they are under extraordinary pressure to improve their business practices. Management has made significant investments in privacy and security but is still under pressure from regulators, politicians, consumers, and the media.
This pressure could ultimately lead to an antitrust lawsuit and force Facebook to spin-off Instagram and WhatsApp (click here for the complete list of upcoming spin-offs). While some investors might cheer in the short-term as it reduces future regulatory risk and unlocks the value of these assets, this would have negative consequences for the overall business.