Facebook’s Share Price Has Worst Performing Quarter to Date

Facebook’s share price fell almost 3% yesterday, but before then its shares had already been steadily declining over past weeks. This places Facebook en route to rival its largest quarterly loss since 2012, when it crashed by 30%.

Shares of Facebook, Inc. [NASDAQ:FB] are trading at US$162.53 at time of writing, down 2.78% since yesterday.

This saw financial share markets around the world fall. The NASDAQ index fell by 0.9%. While ASX futures followed suit down 22 points, as well the European markets saw Frankfurt and London slip 0.7% and 0.9% respectively.

Trouble ahead for Facebook’s share price say’s technical trader

Things aren’t shaping up well for Facebook it seems, as one technical trader believes now could be the perfect sell off period.

On Thursday, founder of TradingAnalysis.com, Todd Gordon told CNBC’s Trading Nation that Facebook’s shares were ‘technically damaged’, continuing:

I see no reason that we shouldn’t be able to go back and retest the $150 mark, which was the old low here from April of 2018. There’s a lot of momentum here.’

This comes on the back of slowing sales growth and regulation risk, which caused MoffettNathanson to lower its rating to neutral from buy for shares after forecasting that Facebook would come in under exceptions in generarted earnings by the end of 2018.

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And led a MoffettNathanson firm analyst to say that ‘…The deceleration in growth, coupled with continued regulatory scrutiny, is a toxic brew for any stock.’

For Facebook, this analysis may prove to be somewhat true…need we be reminded of the death of Myspace, which served as a warning call to all social media platforms.

Slowing sales continue to prove deadly for Facebook’s share price

Over the last month Facebook shares have fallen 11.6% overall and it doesn’t seem like that trend will break anytime soon.

Along with downgrading the stock, Michael Nathanson from MoffettNathanson predicted that income growth will continue to slow in 2019.

Even if Facebook beats its own guidance, it has a higher hurdle to clear before convincing the market that business conditions are back to normal,’ he said.

However there was some good news potentially, regarding the extent of the decline. He further stated:

We also believe considerable strength from the Instagram side of the house (e.g. strong advertising and user growth) has neutralized any soft spots on the core Facebook platform in our opinion…

That said, Facebook still has some wood to chop ahead both on the regulatory as well as user/advertiser front, which must be successfully managed going forward.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: Aussie small-cap analyst Sam Volkering has revealed four Aussie stocks he believes could be the top performers this year. Claim your free ‘The Four Best ASX Stocks for 2018’ report here.


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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