Facebook is rethinking the way it works, and that will have repercussions for users, advertisers and publishers that use the network.
Facebook shares fell because Wall Street doesn’t know what to make of Mark Zuckerberg’s News Feed changes
The stock closed down more than 4 percent.
Paul Marotta / Getty
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
The overhaul, which will first show up in Facebook’s News Feed, will be a “major change,” said Mark Zuckerberg, who says users may end up spending less time on the site.
Wall Street believes him. And for now, Wall Street thinks this is not good news: Facebook shares dropped 5 percent overnight, bounced around a bit on Friday and closed down 4.5 percent to $179.37.
Why? Here’s one theory: “There is too much uncertainty relating to the economic impact of Facebook’s pending News Feed changes for us to be comfortable,” Stifel analyst Scott Devitt said in a note this morning when he lowered his rating on the stock from a “buy” to a “hold” — even though he thinks, “Facebook is doing the right thing for the long-term sustainability of the platform.”
Context: If you bought Facebook shares a week ago, that drop looks pretty scary.
Screenshot via Yahoo Finance
If you bought them a year ago? No problem. You’re still up more than 40 percent.
Screenshot via Yahoo Finance
This article originally appeared on Recode.net.
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