Facebook shares fall the most in 45 weeks on Monday, company reportedly discusses cryptocurrency plans with US derivatives regulator

The US Commodity Futures Trading Commission (CFTC) is in “very early stages of conversations” with Facebook Inc (FB), as the regulator seeks to determine if the social media companys plans for a digital currency would fall under CFTCs scope, the Financial Times reported, citing the head of the CFTC Christopher Giancarlo.

Facebook shares closed lower for a second consecutive trading session on NASDAQ on Monday. It has also been the steepest daily loss since July 26th 2018. The stock went down 7.51% ($13.32) to $164.15, after touching an intraday low at $161.19, or a price level not seen since March 19th ($160.82).

Shares of Facebook Inc have risen 25.22% so far in 2019 compared with a 9.48% gain for the benchmark index, S&P 500 (SPX).

In 2018, Facebook Inc’s stock went down 25.71%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

“We’re very interested in understanding it better,” Christopher Giancarlo said, cited by the Financial Times. “We can only act on an application, we don’t have anything in front of us,” he added.

The news followed recent reports that the social media company also discussed opportunities and regulatory issues for its crypto stablecoin (known as GlobalCoin) with government officials in the United Kingdom and the United States.

In May, Facebook Inc established Libra Networks, a financial technology company, in Geneva, Switzerland. It is owned by Ireland’s Facebook Global Holdings II, while its focus will be on developing the software and hardware for currency-related functions such as blockchain, payments, analytics, big data and identity management.

Giancarlo also said that it was too early to conclude if GlobalCoin could fall under CFTC’s scope. However, he noted that if the digital currency could be backed by the US Dollar, it would diminish the need for derivative instruments to be tied to it.

According to CNN Money, the 43 analysts, offering 12-month forecasts regarding Facebook Inc’s stock price, have a median target of $225.00, with a high estimate of $275.00 and a low estimate of $120.00. The median estimate represents a 37.07% upside compared to the closing price of $164.15 on June 3rd.

The same media also reported that 34 out of 45 surveyed investment analysts had rated Facebook Inc’s stock as “Buy”, while 6 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Facebook Inc (FB) are presented as follows:

Central Pivot Point – $179.78
R1 – $182.40
R2 – $187.33
R3 – $189.95
R4 – $192.57

S1 – $174.85
S2 – $172.23
S3 – $167.30
S4 – $162.37

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