Facebook shares close little changed on Friday, “treacherous promises” of Facebook’s Libra coin should be ignored, ECB’s Mersch says

According to ECB board member Yves Mersch, the proposed Libra digital coin by Facebook Inc (FB) may undermine the European Central Bank’s ability to set monetary policy and its siren call of “treacherous promises” should be ignored.

Facebook shares closed higher for a fifth consecutive trading session on NASDAQ on Friday. The stock inched up 0.05% ($0.10) to $185.67, after touching an intraday high at $186.86, or a price level not seen since August 19th ($187.50).

Shares of Facebook Inc have risen 41.64% so far in 2019 compared with a 16.74% 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.

“Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks, and undermine the single currency’s international role,” ECB’s Mersch said in a statement, cited by Reuters.

Facebook’s Libra is expected to be highly centralized and not backed by a lender of last resort, thus, this digital currency is to be ultimately accountable to shareholders, Mersch pointed out.

“It is scheduled for release in the first half of 2020 by the very same people who had to explain themselves in front of legislators in the United States and the European Union on the threats to our democracies resulting from their handling of personal data on their social media platform,” Yves Mersch also noted.

Analyst stock price forecast and recommendation

According to CNN Money, the 42 analysts, offering 12-month forecasts regarding Facebook Inc’s stock price, have a median target of $238.00, with a high estimate of $265.00 and a low estimate of $120.00. The median estimate represents a 28.18% upside compared to the closing price of $185.67 on August 30th.

The same media also reported that at least 35 out of 46 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.