20-something investors are dumping Facebook's stock ahead of earnings (FB)

pulse

April 25, 2018 4:52 PM

Data from stock trading app Robinhood show young investors are selling much less than they were ahead of last quarter's earnings report.

Ahead of its report, investors under 30 are selling 20% more than they are buying. Older investors are more bullish.

Millennial investors are aren't feeling the love for Facebook ahead of its first earnings report since the Cambridge Analytica Scandal, trading data show.

Ahead of the social networks' earnings Wednesday afternoon, investors on the stock trading app Robinhood under 30-years-old were selling shares 20% more than they were buying, the brokerage said.

That's a marked shift in sentiment since the data privacy scandal first hit markets on March 19, when Robinhood users were snapping up shares 2.7 times more than they were selling as the stock tanked.

"Recent news cycles may have influenced investor sentiment, particularly among younger investors," Sahill Poddar, the app's data scientist, told Business Insider in an email. "Investors under the age of 30 are selling FB 20% more than they are buying, compared to investors over the age of 30 who are selling FB 7% than they are buying, leading up to these earnings.”

Shares of Facebook are down 14% since Cambridge Analytica first came to light, weighed down by fears of possible regulation and decline in usership following the scandal.

"We do believe there may be near-term pressure (Q1/Q2) on User and Engagement growth at Facebook, given all the negative media attention on the data controversy, though do not see a material long-term impact," RBC Capital Markets analyst Mark Mahaney told clients ahead of earnings.

Facebook is down about 1% in mid-morning trading as its earnings report approaches after the closing bell Wednesday.

"Although engagement levels are a constant concern, " said Mahaney. "Facebook's measure of DAU/MAU has remained consistently high on an overall company basis."

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