The Facebook share price sold off this week after Kim Kardashian announced a plan to “freeze” her accounts on the platform, alongside their Instagram platform. The popular celebrity also suggested her followers follow suit after criticizing the site for allowing “hate” to spread. Kardashian has 118 million Instagram followers and her tweet led to a sell-off in the stock.
It was later noted that actors Sacha Baron Cohen and Mark Ruffalo had also stepped off the platform. The boycott is the latest in a series of negative public relations events for Facebook after an advertiser boycott in the summer that has yet to show up in quarterly earnings results.
Facebook was hit with another problem this week after speculation that the Federal Trade Commission could launch an antitrust probe by year-end. CEO Mark Zuckerberg noted in filings that the company had been complying with the probe.
The U.S. election is fast approaching and is taking heat from advertisers and celebrities, whilst they have been trying to please governments with their coverage of virus outbreak. It seems like the downside risk in Facebook at the moment outweighs the potential upside in a well-priced stock market and investors may want to take profits.
Facebook Shares Technical Outlook
Facebook’s breakout above the $220 level this year has stalled at the $300 level and the share price risks a further pullback to test that level as support. The gains from the mid-March lows have been steep, in a stock market that is starting to face criticism of overvaluation. The pressure seems to be building on different sides ahead of the election and this would be a risky area to get long.
Facebook Weekly Chart