Investor Paul Mix told CNBC on Monday that he will not be investing in social media stocks for the time being.
Meeks, who is known to manage the world’s largest tech fund during the stock market bubble, predicted that regulators would target the group this year – with Facebook and Twitter bearing the brunt.
Social media has come under attack due to the amount of false and misleading information released to the public.
“The interesting thing about this all-out attack on social media companies, especially the major platforms, is that it is a bipartisan concern,” added a portfolio manager at Independent Solutions, a wealth management company for Trading Nation.
Under current law, platforms cannot be held legally responsible for what their users write.
“They will likely face a breakdown of Article 230 of the much-overdue Communications Etiquette Act of 1996,” Mix said. “It’s legislation decades ago, when we were in the very early stages of using the Internet, and it’s totally inappropriate today.”
According to Meeks, the campaign costs to companies will be enormous.
“Maybe they should now spend a lot of dollars on compliance,” he said. “When you start restricting their content on their platforms, it is clear that this will anger a number of digital advertisers.”
Mix, who has sold his entire Facebook account in the past two months, said he sees an additional threat from Apple due to changes to its iPhone operating system, adding, “You, I and everyone else have an opportunity to unsubscribe from following our data.”
One thing that should not worry investors, Meeks noted: Regulators are punishing social media for its role in the Reddit rebellion.
“I don’t think there was much error in the spread of information. This is a relatively new place in the last couple of years. He indicated that it will not disappear. Rapid spread is something that we will have to get used to. ”