>> Fear that regulators are going to sink their fangs into so-called FANG stocks, that's Facebook, Amazon, Netflix, and Google parent Alphabet, are sending fund managers to run for the exit. Portfolio managers telling Reuters this week, they're worried that the data privacy scandal that sent Facebook shares down over 15% since the news broke over a week ago, will spill over to other FANG stocks and tech heavyweights.
The fear is the regulation will eat into profits says Reuter's correspondent, David Ingram.>> A lot of Facebook's value is its ability to target advertising to really narrow audiences, whether its selling shoes, or vacation spots. Pick a service that's being sold and Facebook can find someone who's interested in it and who will click through and through that advertising.
But if there are more restrictions on the data Facebook can use for that targeting, Facebook ads will be less effective. So advertisers may decide that they don't wanna spend as much money on Facebook ads if they're not going to be as targeted.>> Facebook was up around 1% on Wednesday, a day after sources told Reuters that CEO Mark Zuckerberg plans to testify before Congress.
But Amazon got a clobbering, dropping over 7% at one point on Wednesday following a report from Axios, titled, Trump hates Amazon, not Facebook, which said Trump has talked about changing Amazon's tax treatment, because he's worried about mom and pop retailers being put out of business. Trump is taking aim at Amazon over taxes and jobs without offering evidence, and he's frequently criticized the Washington Post, which is owned by CEO Jeff Bezos.
>> Amazon has huge amounts of data about you, Google Alphabet has huge amounts of data. All these large Internet companies, with maybe some exceptions, Apple has a little more cred with the privacy advocates than other companies. But for the most part, all these other big tech companies have huge amounts of data about you.
And that that data can be used for advertising targeting.>> So where will the fund managers go? Several tell Reuters they're slowly rotating into commodity related shares and traditional value stocks like energy and defense companies, raising questions about whether the tech party is over for now.