Investors are extracting themselves from FAANGs

Silicon Valley could do nothing wrong for the last decade.

New technology, products, apps and personalities took shares to all-time highs. The FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) forced the Nasdaq to blow past its Internet Bubble highs. (BTW, not a fan of Alphabet rebranding).

The FAANGs became ironically the darlings of the hedge funds. Figure that? A money manager taking your funds saying they have a different investment philosophy and then piles into stocks that have broad shareholder appeal. How is that a hedge?

Well these stocks probably did not deserve all the acolytes on the way up, but the pendulum is swinging widely to the sell side. In a scene that is reminisce of “Casablanca” America was “shocked” that social media companies primary or secondary revenue streams come from selling your data, not selling ads.

Cumulatively the FAANGs are down 15% from their highs earlier this year as institutional investors jump to the sidelines over the Facebook/Cambridge Analytica privacy row.

The share-price carnage is not helped by the silence of The Bergs (Mark Zuckerberg and Sheryl Sandberg). These figureheads (what else can you call them) can’t take the heat and are deploying a “rope-a-dope” strategy hoping the storm passes.

Well that will not happen until the middle of April, when the boy blunder will be called in front of Congress to explain what happen with users data prior to the 2016 election.

While Sandberg was suppose to play the role of “adult in the room”.  Her ties to the government as chief of staff to Treasury Secretary Larry Summers and as an economist at the World Bank, appears to have greased the skids for providing Facebook data to the Obama campaign in 2007.

This is why we have the silence of The Bergs and why they are attempting to send straw men to testify before the many government inquiries here and in London. It will not work.

Zuckerberg will be forced to give up the CEO spot sometime after his Washington DC testimony.

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