Our “eternal sell” rating on Facebook.

We don’t issue buy or sell ratings on companies, but if we did, conventional equity ratings wouldn't suffice to describe just how and why we think Facebook is the most overvalued stock since eToys.

Some on Wall Street believe that bad news is now “baked” into the stock and have a buy or strong buy on the name. We disagree for one foundational reason: The company’s founder has been scaling back on the number of shares he’s selling in order to ensure that he can remain the Genghis Khan of the company. With full control, Genghis will still have access to his limitless bag of mulligans on hand every time that his misguided bid to connect the world’s people gores democratic institutions, upends privacy or facilitates civil strife. Eventually, those things will catch up with the company (See what Germany’s Bundeskartellamt is fixing to do to Facebook). Moreover, the recent devaluation of Facebook has been driven by ESG factors impacting fundamentals and raising questions over the long-term viability of the business model, according to a recent research report from Truvalue Labs, a provider of ESG data.

But if those factors don’t sway you, we’d recommend that you check out the phenomenal article from The Outline below, which points to a different reason to become bearish on Facebook: Its products are getting really bad. Or to put it in the words of author Joe Veix, “Navigating their apps feels sort of like trying to watch a sitcom on an illegal Russian streaming site circa 2007.”

This article was published as part of Weekly Briefing No. 157