Spooked by the data breach news, social media giant Facebook (FB – Free Report) was one of the worst-performing stocks on Wall Street in Monday’s trading session. This has sparked concerns over increased regulation for large tech companies, triggering a selloff in the hot and soaring technology corner of the broad stock market.
Both the S&P technology index and tech-heavy Nasdaq Composite Index witnessed the worst one-day fall since the selloff in early February, declining 2.1% and 2.5%, respectively.
The steep decline came following reports from New York Times and London’s Observer, which revealed that data analytics firm Cambridge Analytica, which had ties to the Trump campaign, gained inappropriate access to data on more than 50 million Facebook users. This has sparked broader concerns about data privacy and security, and will likely lead to increased scrutiny over data security and a relatively heavy regulatory pressure.
As such, shares of Facebook tumbled 6.8% in Monday’s trading session, representing the worst one-day drop in nearly four years, and wiped out $36.4 billion from the company’s market value. With the slide, the stock is down 11.6% from the latest peak, signaling that it has entered correction territory.
Facebook currently has a Zacks Rank #2 (Buy) and a Growth Score of B, suggesting that it is primed for growth in the coming months. It saw solid earnings estimate revision of 58 cents for this year over the past 60 days and has an estimated growth rate of 16.72%. Revenues are also expected to grow 36.3% for this year. However, the networking giant belongs to the bottom-ranked Zacks industry (bottom 30%), which signals some pain in the near term.
Other stocks in the FAANG group, namely Amazon (AMZN – Free Report), Apple (AAPL – Free Report), Netflix (NFLX – Free Report) and Alphabet (GOOGL – Free Report), also saw terrible trading, losing 1.7%, 1.5%, 1.6% and 3.0%, respectively. Social media companies including Twitter (TWTR – Free Report) and Snap (SNAP – Free Report) dipped 1.7% and 3.5%, respectively.