While Facebook Inc.'s (FB) stock may have been hardest hit among the tech giants over the past week on fears of regulatory backlash following the high profile Cambridge Analytica data scandal, Twitter has more on the line here, according to one bull-turned-bear.

Shares of social media pioneer Twitter Inc. (TWTR) have crashed some 10% on Tuesday afternoon following news that Citron Research is shorting the stock after selling its long position. This is a turnaround from its stance in January, when Citron had called Twitter a "compelling product" from where it was trading, while acknowledging that the firm had "a long way to go" to fix its issues. 

Above: TWTR stock price over the last three months. Source: Investopedia using FactSet

Dorsey's Social Media Pioneer Sees its Data Licensing Business at Risk

In a post on Citron Research's website, run by famed short seller Andrew Left, the firm argued that the San Francisco, Calif.-based company is the most vulnerable out of its peers as the industry faces heightened regulatory pressure. Left, who was previously bullish on the tech stock when it was in the low $20s, touted its over 50% gain in just two months since he made the trading call. "Next! A Lot has Changed!" read Citron's website, in a post that explained the short seller's quick change of heart. 

Left attributed his bearish outlook to the fact that Jack Dorsey's Twitter is now being "hauled in by Senate Judiciary Chairman Chuck Grassley (R-Iowa)," alongside tech titans Facebook and Alphabet Inc. (GOOG) for a hearing on data privacy. The hearing is set to take place in just two short weeks on April 10. 

"Wait until the Senate finds out that: Twitter will generate $400 million THIS YEAR, just by selling user data. Not advertising." A potential backlash by the government following a series of data scandals would be of particular harm to Twitter, as its data licensing business has grown in importance relative to its ad revenue segment. Citron highlighted Twitter's ad revenue down to $2.11 billion in 2017 from $2.25 billion the year prior. Meanwhile, its data licensing segment, which Chief Financial Officer (CFO) Ned Segal has called a "really high margin business," saw revenues spike to $333 million last year, up from $282 million in 2016. 

While Citron made claims that Twitter even sells its users' private messages, called DMs, Twitter issued a statement indicating that, "to be clear - our data licensing business does not sell DMs. Any reports to the contrary are wrong."

The short seller, who gained a following on a series of successful bets against stocks such as Valeant Pharmaceuticals Inc. (VRX), told CNBC that Twitter's inflated valuation and minimal short interest also impacted his decision to bet against the stock.