Facebook shares fall as Needham downgrades it from buy to hold
Privacy shifts, risks of government regulation and the live-streaming of the New Zealand massacre have driven the negative sentiment
New York — Facebook’s recently announced pivot toward privacy and encrypted messages pushed former bull Needham to the sidelines while Bank of America Merrill Lynch (BofAML) said the move “adds some uncertainty”. Shares of Facebook fell 3.2%, marking a third straight decline totaling as much as 7.3%. While the stock has rallied more than 30% from a December low, it remains more than 25% below a July record. The privacy issue was just one of the factors driving Needham’s downgrade to hold from buy. The firm also cited the “growing risks” of government regulation and the recent massacre in New Zealand, which was live-streamed on Facebook. Such “horrific images” are “technologically difficult to block at the 100% level,” hurting Facebook’s brand, analyst Laura Martin wrote. Together, “these risks are causing a Negative Network Effect, as evidenced by senior management departures,” she wrote, referring to the recent departure of Chris Cox, the company’s former chief product officer. Nee...
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