On March 10, we suggested investors take a bearish position on Facebook (FB). From our analysis, we thought they were beginning to lag in the online advertising space. Google is growing market share relative to Facebook, for example. If then continues, and there is no reason to believe it will not, earnings growth would slow and FB stock would face headwinds.
We always knew that FB played fast and loose with the data collected from their users. In fact, the media talked at length about how the millennials did not seem to care about privacy and they seemed more interested in being seen than being ignored. We are not surprised that investors and the press are slapping the company around. The real question is why now. They did not seem to care before.
