Facebook chart

There wasn’t much to ‘like’ about Facebook as shares tumbled more than 6% yesterday. The move was caused by a serious security breach in which an analytics firm received data on approximately 50 million users. The outcry has been enormous with politicians calling for CEO Mark Zuckerburg to testify about the breach.

What was more interesting for me was the contagion effect on other tech stocks yesterday. Google was down more than 3%, and Amazon, Microsoft and Apple were all down more than 1%.  The main reason cited was that investors were worried about future tighter regulatory controls. Whilst this is true, I feel that yesterday’s sell-off in the tech stocks was also due to a lot of profit taking. US tech stocks have been at the forefront of the Bull market for the past 8 years and, given the news on Facebook, it looked like a good opportunity to take some money off the table.

 

Vinay Sharma,

Senior Trader

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The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.

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