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Facebook changes News Feed; investors click on 'sad'


By and Aishwarya Venugopal

(Reuters) - of Inc fell more than 4 percent on Friday and were on track for their worst session in more than three months after announced changes that he said would hit user engagement in the near term.

Zuckerberg said late on Thursday the world's largest would adjust its centerpiece Feed to prioritize what friends and family share, while reducing the amount of from publishers and brands.

Fears that the changes would lead people to spend less time on sent its stock down $8.44 to $179.30.

If the stock closes at that level, it would be the biggest one-day decline since September and would shrink the company's market value by $23 billion, which is more than the total market value of rival

N>, the owner of Snapchat.

"There is too much uncertainty relating to the economic impact of Facebook's pending Feed changes for us to be comfortable retaining a Buy rating on the stock," wrote in a research note, cutting his recommendation to "hold" from "buy."

The change announced by Zuckerberg follows criticism that Facebook's algorithms may have prioritized misleading and misinformation in people's feeds, influencing the 2016 American as well as political discourse in other countries.

While, Facebook's advertising would be unaffected by the changes, the shift would likely mean that the time people spend on and some measures of engagement would go down in the short term, the company said.

With its stock up 48 percent over the past 12 months, has been a of a that has propelled the to record highs. Its revenue is expected by analysts on average to have surged 45 percent in 2017, a rare accomplishment for a company of its size.

Some hedge funds used Friday's drop in Facebook's stock to add to their positions, said Joel Kulina, a at

"Guys were hoping there would be more of a pullback so they could buy more," Kulina said. "They don't think there are any real cracks in the story."

Changes to Facebook's Feed may have an impact on major suppliers of and other content.

John Ridding, the of the Financial Times, warned on Friday that the domination of by search and platforms was putting pressure on

"The FT welcomes moves to recognize and support trusted and reliable and analysis. But a to the challenges of the new information ecosystem requires further measures," he said.

(This version of the story corrects stock move and stock price in third paragraph)

(Reporting by in Bengaluru; editing by and Marguerita Choy)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, January 13 2018. 01:41 IST