For instance, Snapchat's parent company Snap ($SNAP) reported earnings this week. It did not go well.

​The stock fell over 25% after it reported weaker advertising revenues on Thursday. The surprise came from Apple's privacy changes and the company also warned that global supply chain interruptions and labor shortages hampers the “short-term appetite to generate additional customer demand through advertising.”

This was a shock for investors that did not see the supply chain disruptions reaching innovative, advertising-based software companies. The interconnectivity of a global economy never ceases to surprise and occasionally dismay.

Simultaneously, the market began to think through the implications for other, similar type businesses and other digital ad-dependent companies like Twitter and Facebook. These companies also reported sharp stock declines.

This continues a trend for Facebook ($FB) recently. The social media giant has had a tough few weeks.

It is sort of hard to keep up but a decent summary might be:

1. ​A massive leak of internal documents to the WSJ revealing discussions and evidence that detail how Facebook employees and executives are aware of the potential harm their platforms have on their users.

2. A whistleblower going public and denouncing - on 60 Minutes no less - the company's practices and leadership. This individual, a former employee, Frances Haugen, was then invited to testify in front of Congress. It was similarly spicy.

3. And now, there is a rumored name change being considered as the company furiously tries to deal with yet another wave of public criticism and political and regulatory attacks.

Pro tip: Nothing reveals that a company actually has real image problems than when it tries to change its name to something innocuous.

We are thinking of such legendary examples as Phillip Morris changing to "Altria" here. Or the infamous and rather unseemly ValuJet transforming itself to Airtrans after a tragic crash. Or Jeb Bush's incredibly puzzling rebrand to "Jeb can fix it" from the almost equally bizarre "Jeb!" in the 2016 election.

Could Facebook possibly return to its roots as FaceMash?! One can always hope.

Mark Zuckerberg, Facebook's CEO, may suddenly feel like he is in the same boat as Alibaba's Jack Ma. A besieged CEO, a beleaguered company, circling regulators and endless political sniping from all sides.

The reason this is so important is that:

1. Like Alibaba, Facebook is beyond being simply a major global tech company. At the time of writing it has over 2.9 billion monthly users (!), it has over a $900 billion dollar market cap and represents well over 2% of the S&P 500.

2. As the online calls for a boycott (#deletefacebook) reveals, many, many people passionately dislike the company (and if this is you, Pebble is happy to help!)

3. And regardless of whether you personally despise the network Mark built, if the government decides to seriously pursue a company in the courts, it can severely impact its ability to run its business.

This is also not without precedent.

We have spoken before about how the US government's antitrust action against Microsoft had a profound and multiyear impact on its share price.

For now, on the surface, Facebook is the perfect Pebble Trifecta:

1. There are real vulnerabilities to its business model which can be argued acts as a net negative to society. As with tobacco, that makes a clear cut case for regulation.

2. Because of the harm it visits on individuals and the collective there is also a strong a values based case for investors to exclude the company

3. AND there is a utilitarian argument. Facebook profits (and therefore its stock price) are hardly without risk.

This Trifecta is hard to do!

The big question, however, is still:

Rebrand or no rebrand, will Facebook actually face serious repercussions for all its bad behavior?!

Will it suffer the same as Alibaba and find that it is not only reviled but also meaningfully punished?

Sadly, we are not so sure.

We think there is a stronger case that, despite the congressional fireworks and online vitriol, the Facebook business model will largely continue untroubled especially when it comes to minting profits.

Why?!?

Lots of reasons but three big ones:

1. Facebook's behavior and issue are not new. They have faced fines and investigations before but precious little real business altering action. Has that now changed? Maybe but it will require a lot of political will. Do we have that?

2. Mark Zuckerberg controls his company through the type of dual class shareholder structure that we have spoken about before. Legally, it is very difficult for investors to demand change let alone force Mark Zuckerberg to change the company's business model.

3. Most people won't really delete Facebook. That is the magic of Facebook. The whole problem is that it - or really its algorithms - are manipulative and damaging but very, very addictive.

So there is a lot of sturm und drang or fireworks but very little actual structural change business model.

Our assessment is that the likely compromise is not to severely alter the way Facebook operates - and therefore makes its money - but instead to make it more beholden to the government itself.

We are not the only people to point this out. From one angle, Facebook harmful manipulation of its users is very abhorrent. From another, it is actually very attractive. After all, it is nothing if not successful.

Co-opting Facebook's immense power and reach is therefore far easier and intriguing than fundamentally reforming it.

For now, the big news is Facebook's stock is declining for other reasons as we detailed above. We think that, sadly for humanity and especially perhaps our children, its advertising revenue will very likely rebound and with it, that pricey equity valuation in 2022.

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