Stocks

FAANGs Go From Wall Street To DC

As Congress was about to dig its fangs and claws into Facebook CEO Mark Zuckerberg, many who heard his testimony might be surprised to learn that his company resides in a group of stocks known on Wall Street as the “FAANGs.” What are FAANGs?

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They are a diverse but small portfolio of stocks comprising some of the biggest names in the technology industry. It is an acronym, originally consisting of Facebook, Amazon, Netflix and Google, or FANGs. In its current iteration, with room for still more “A”-named tech companies, it now includes Apple. Together, known as FAANGs.

Jim Cramer, the CNBC host and former Goldman Sachs banker, is widely given credit for creating and popularizing the phrase. (Last decade, Wall Street became infatuated with another market acronym, BRICs — Brazil, Russia, India and China.)

Each of the FAANG stocks trades on the NASDAQ. Their growth and performance have been spectacular. At the end of March their combined value was over $3 trillion. And most Americans probably own a portion of them through retirement and investment accounts.

Now they are part of a new conversation.

Like most high-tech endeavors, these companies rely heavily on data driven information — both public and private — as their lifeblood. Recently, this mini sector saw massive losses in market value in the wake of the Facebook/Cambridge Analytica disclosure that 87 million Americans’ data were harvested without their knowledge. And perhaps compromised via nefarious channels.

These revelations raised fears among FAANG investors about wider ranging privacy concerns. Higher costs and lower revenue may result as the federal government considers stiffer regulations and consumers abandon product lines. The day after Easter the five stocks alone lost $78.7 billion in value.

An old Wall Street saying claims there are only two types of animals on the street: bulls and bears. But not pigs. Notwithstanding recent losses, the FAANG group is a different animal. A goose. As in golden.