Facebook, the leading social media company, is facing pressure after The New York Times issued a damaging report, with the stock falling close to 5 percent during intraday trading Monday (Nov. 19).
According to a report in CNBC, Facebook is on the path to end November in the red for the third month in a row, which would mark the longest losing streak for the stock. What’s more, the company is on track to have the second straight quarter in a row of losses, something that hasn’t been seen by the social media giant since 2013.
“Technically, when I look at this, there’s no question that we’ve violated the long-term uptrend support line off of the  lows. We’ve got some support that’s going to come in right around $130, but better support coming in at $114,” Craig Johnson, chief market technician at Piper Jaffray, told CNBC late last week. The Wall Street analyst noted that he’s staying on the sidelines instead of viewing the sell-off as a buying opportunity or getting out of the stock further at this point.
Facebook is under fire after an explosive New York Times report, in which the paper said that Facebook hired Definers Public Affairs, a Washington D.C. consulting firm, to create opposition research on critics of the company. Facebook ended its relationship with the consulting firm after the story was published. While that news has raised the prospects of the social media giant facing more regulations, as well as a potential shake-up amid the ranks, other investors aren’t so negative about the stock’s near-term prospects, reported CNBC. Mark Tepper, chief executive of Strategic Wealth Partners, told CNBC that the stock could be a good value play over the long haul given its depressed share price.
“If you have a two- to five-year time horizon, Facebook actually looks really attractive at these levels,” Tepper said. He did caution that the short term will be tough going for shares of Facebook. “The market has been absolutely punishing companies with decelerating growth, and that’s exactly what you’re seeing with Facebook. I don’t think there’s any light at the end of the tunnel anytime soon. They’re making some pretty aggressive investments to deal with improving their ad transparency, getting rid of fake accounts, eliminating fake news, and that’s going to be a drag on profits in the near term,” he added.