Facebook Stock Pressured on #DeleteFacebook Trend

Shares of social media giant Facebook Inc. (FB) slid yet another 2.7% on Thursday, closing down at $164.89 and reflecting an over 10% decline this week on news of a major data scandal. As the Silicon Valley giant faces heightened pressure in all directions, from its shareholders, the media, governments and its users, one team of bears sees the stock plunging further on momentum of the #DeleteFacebook campaign. (See also: Facebook Valuation Plunges to Lowest Since IPO.)

On Wednesday, an analyst at Bank of America Merrill Lynch issued a downbeat note to clients on the tech titan, as reported by CNBC. The note comes as a response to news that data analysis firm Cambridge Analytica accessed data on more 50 million users without their consent, using the information to aid the Trump campaign in the 2016 U.S. presidential race. A wave of negative media attention this week led FB stock to suffer its worst one-day dip in four years on Monday and shaved off nearly $45 billion off the firm's market value. 

Earlier this week, Chief Executive Officer Mark Zuckerberg spoke up about the crisis for the first time, suggesting that he is "really sorry" and will happily testify before Congress, while suggesting that fixing the issue should cost the social media company "many millions" of dollars. The internet entrepreneur also suggested that he is open to more regulation.

Analysts Doubt Zuckerberg's Ability to Appease Critics 

"I actually am not sure we shouldn't be regulated. I think in general technology is an increasingly important trend in the world, and I actually think the question is more 'What is the right regulation?' rather than 'Yes or no, should it be regulated," said Zuckerberg in an interview with CNN. 

Doubting that the tech executive's remarks will relieve negative sentiment around company, BofA analysts reduced their price target on FB to $230 from $265, still reflecting a solid 39% upside from Thursday close. While Zuckerberg's statements should allow for the beginning of a "long recovery process," BofA analyst Justin Post wrote that there is nothing that can be said to ease concerns from the most vocal critics. As a result, the platform could see a decline in usage, at least in the near term. 

"With '#deletefacebook' hashtags trending and the onslaught of negative Facebook headlines (Uber had a similar situation last year), we have to consider the potential that some portion of users reduce usage of the platform," wrote the analyst, who maintains a buy rating on FB stock. "In terms of ad targeting, we see medium-term risk that additional user permission management and reduced consent … and as a result, ad pricing growth could trail our estimates." (See also: Why The Facebook-Google Digital Duopoly May Be Dead.)

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.