Marlene Awaad | Bloomberg | Getty Images
Mark Zuckerberg, CEO and founder of Facebook Inc., listens on Thursday, May 24, 2018, during the Viva Technology conference in Paris, France. Facebook dropped out on Monday after a Wall Street broker downgraded the rating, noting customers that the recent departure of eleven executives could trigger more flights from the social media giant.
Needham analyst Laura Martin wrote that Facebook's shift toward privacy and encrypted messaging, rising regulatory risks and uploading disruptive content will accelerate management exodus, calling it a "negative network effect".
Regulatory, headline and strategic pivot risks will affect Facebook's rating more negatively than is currently assumed by investors due to the negative flywheel caused by Network Effects, "Martin wrote." A negative network effect suggests that that the churn will continue, and as we believe that humans are a key competitive advantage for FAANG companies, it means accelerating value destruction until executives' sales end. "
Facebook has left several of its top executives Company in recent months, including Chief Product Officer Chris Cox, co-founders of Instagram, Kevin Systrom and Mike Krieger Cox left last week.
Facebook had last week after a terrorist attack in New Zealand, where a gunman attack had streamed live on the social media site, also criticism geüb Google's YouTube and Twitter also had difficulty tracking down and removing the disruptive content. The shootings claimed at least 49 casualties.
Last week saw the longest business interruption. After nearly 24 hours of intermittent access, the company said it was responsible for a "server configuration change that triggered a series of problems."
Martin has a target price of $ 170 for the shares of Facebook, less than 3 percent of Friday's closing price of $ 165.98. The shares fell on Monday before the listing of the Needham by 1.2 percent. Equity has fallen 9.7 percent in the last 12 months.