Facebook Stock Hits New Low After Wedbush Note

FB stock is headed toward its worst quarter in six years

Karee Venema

Dec 24, 2018 at 10:03 AM

The shares of Facebook, Inc. (NASDAQ:FB) are trading down 1.4% at $123.212 -- earlier hitting a nearly two-year low of $123.05, after Wedbush removed the FAANG stock from its "Best Ideas" list. However, the brokerage firm maintained its "outperform" rating and $220 price target, a 76% premium to Friday's close.

Today's negative price action is just more of the same for FB stock, which is pacing for a 24% fourth-quarter loss -- its worst quarterly performance since the third-quarter of 2012. What's more, Facebook is on track to close below its 50-month moving average for the first time since the trendline formed in June 2016.

Against this backdrop, skepticism has been ramping up both in and outside of the options pits. In addition to a handful of FB stock downgrades, put buying has accelerated at the major options exchanges in recent weeks.

Drilling down on specific options, the January 2019 140 and 150 strikes are home to peak put open interest, with more than 97,000 contracts currently outstanding. Data shows at least some buy-to-open activity at each strike, suggesting options traders are targeting more losses for Facebook at the start of 2019.

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