News surrounding the security of Facebook users' personal data has dragged the stock down 7 per cent on Monday. The controversy may further justify Europe’s General Data Protection Regulation campaign, the enforcement of which will begin in May, and increase the probability of similar demands in the US.

We've accounted for such risk, to a certain extent, in our model, which has much lower than consensus projections over the next five years, but the news is concerning, and we continue to analyse possible impacts from it on our valuation of Facebook and its peers.

In the meantime, even with the recent pullback in Facebook shares, they remain in 3-star territory, and we are maintaining our US$198 per share fair value estimate for this wide-moat name. We continue to recommend investors wait for a wider margin of safety before investing in Facebook.