Facebook Inc. gave up the top loser spot to Amazon.com, which lost $53 billion in market value after Axios reported that President Donald Trump is “obsessed” with regulating the e-commerce behemoth. The social media giant had previously underperformed the tech megacap group amid concern over the company’s handling of its users’ personal information.
The FAANG stocks, once assumed to be a monolith of performance, have suffered degrees of decoupling recently, including the outperformance by Netflix Inc. earlier in the year.
Amazon.com fell as much as 7.4 percent before paring some losses to close 4.4 percent lower after a Stifel Nicolaus & Co. analyst said the weakness created a buying opportunity. Facebook diverged from the group in early trading, rallying 0.5 percent after announcing it’s redesigning a menu of privacy settings in response to public outrage over the user data practices. Netflix was the second-biggest loser in the FAANG group of stocks, sliding 5 percent on the heels of the #DeleteNetflix campaign.
“Netflix and Amazon haven’t really experienced the intense selling that Facebook did,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “The ‘flu’ that Facebook got is now spreading to the others.”
The Axios report indicated that Trump may target Amazon.com’s tax treatment, and whether this materializes or not, it’s not the first time he put the retailer in his crosshairs. On Dec. 29, when he blamed the company for squeezing low prices from the U.S. Post Office to deliver packages in his Twitter account, the stock fell 1.4 percent, which at a time was the biggest drop in more than two weeks. Trump has also called the company an antitrust violator in the past.
“In a nutshell, the FANG names and the Beltway continue to be on a ‘collision course’ in the eyes of the Street,” said Daniel Ives, chief strategy officer at GBH Insights LLC. “With Facebook and regulatory worries swirling around tech names, the last thing nervous tech investors wanted to see today was news that Trump is targeting Bezos and Amazon over the coming months.”
Despite Axios alleging that Trump is beset on Jeff Bezos’ e-commerce hub, White House Press Secretary Sarah Huckabee Sanders stated otherwise when asked about the news at briefing. Sanders said the Trump administration isn’t considering any specific changes in regulations directed at the company.
Overall market weakness isn’t helping Amazon shares either. The Nasdaq 100 Index lost 1.1 percent, on track to post the biggest monthly loss since January 2016. The S&P 500 Index is down 0.3 percent to 2,605 after swinging between gains and losses earlier in the day.
The technical battle at 2,600 on S&P is “the most important thing to watch right now and if it holds, everything will bounce, including technology which has worse sentiment now,” said Ilya Feygin, senior strategist at WallachBeth Capital LLC. “Growth equities can’t be abandoned completely and any bounce should see a nice pop.”