Saudi Press

Saudi Arabia and the world
Saturday, Aug 02, 2025

Nearly 40% of Facebook's valuation is on the line from regulatory risk, HSBC says

Nearly 40% of Facebook's valuation is on the line from regulatory risk, HSBC says

HSBC Global Strategies initiated coverage of Facebook with a reduce rating, recommending investors sell the stock. The firm said said regulatory overhang is equivalent to 38.5% of Facebook’s current valuation.
Trust-busting, anti-competitive fines, privacy fines, taxation, merger control and telecoms-type regulation all pose potential implications to valuation the firm said.

Imagine $225 billion of Facebook’s $565 billion market cap was gone. That’s how much HSBC Global Strategies said is threatened by the social media giant’s dance with regulators.

The firm initiated coverage of Facebook with a reduce rating, recommending investors sell the stock. HSBC said regulatory overhang is equivalent to 38.5% of Facebook’s current valuation.

“Although it has taken time for policy makers and regulators to ready their ideas, it should now be clear they have well-advanced plans for intrusive interventions,” said HSBC senior analyst Nicolas Cote-Colisson in a note to clients.

Facebook has drawn negative attention from politicians and regulators from the U.S. and all over the world. The Federal Trade Commission, the the European Union have all announced investigations into Facebook, either on the tech giant’s practices on digital competition or concerns about its digital currency Libra. Despite the regulatory overhang, shares of Facebook are up over 50% this year. But HSBC said its only a matter of time before the stock prices in the real threat of privacy, regulatory and antitrust risk.

“In a sense, Facebook’s sheer pace of growth is becoming a risk factor in its own right, as it is likely to accelerate scrutiny and intervention,” said Cote-Colisson.

The results of the regulatory crackdown, including fines and policy changes could cost Facebook almost 40% of its market value, the firm said. Trust-busting, anti-competitive fines, privacy fines, taxation, merger control and telecoms-type regulation all pose potential implications to valuation.

“For instance, the possibility of imposition of telecoms-type regulation to make it easy for users to move to competitors,” said Cote-Colisson.

HSBC said due to the risk, growth will become more challenging, therefore consensus estimates are overly ambitious.

The average 12-month price target for Facebook on Wall Street is $238.28 per share, according to FactSet. HSBC lowered its 12-month price target for Facebook to $178 per share. Facebook’s stock closed at $198.71 on Wednesday.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Emirates Airline Expands Market Share with New $20 Million Campaign
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
×