U.S. President Trump is targeting social media companies and looking to narrow some of the protections that they have relating to the content their users post. While it's a bit early to speculate what may or may not happen, there's no denying Trump can have a lot of influence on stocks. And if social media companies are in his crosshairs, that could be bad news for a company like Facebook (NASDAQ:FB).
The social media giant's already trading new its 52-week high and while it hasn't seen a large selloff in as a result of Trump's actions yet, it may only be a matter of time. And for investors, that could mean now's a great time to dump the stock and potentially wait to buy back in at a lower price later on.
Facebook's trading at more than 30 times its earnings and six times its book value. And with advertisers looking to scale back spending and the economy headed for a recession, there could be some challenges ahead for Facebook. Between its high valuation, Trump potentially making things worse for social media companies, and a slowing economy, there are no shortage of reason to be bearish on Facebook's stock, at least over the short term.
It was only at the end of April that the tech giant's share price climbed back above the $200 mark. And as quickly as it rose, it could fall right back down. The markets have been very volatile over the past few months and now could be a good time to cash out some of those gains as Facebook and other social media stocks could be in danger of falling in the near term.
