After taking a disproportionate part in the post-crisis equity rally, the last 12 months have been highly volatile for FANG (Facebook, Amazon, Netflix and Google) stocks.
With investors now having to weigh the attractive growth potential offered by FANGs with the threat of greater regulatory oversight, we examine what could lie ahead for these firms by focusing on how greater scrutiny on privacy, content management and anti-trust issues may affect the industry.
Despite negative headlines, the sector-wide impact of personal data mis-use has been limited.
Platforms have begun to change their attitude towards content regulation in order to ward off potentially damaging legislation.
Anti-trust is the greatest potential tail-risk for the sector, however it would require a fundamental overhaul of the US’s anti-competition legislation.
Sentiment towards the sector has now shifted with investors no longer universally bullish, which we view as a positive environment for bottom-up stock pickers.
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