A slew of technology companies that started as the disruptors are getting disrupted themselves by “headline risk.” Indeed, headline risk is now the biggest danger to the overall stock market.

The stock market in recent weeks has resembled a roller coaster, rising and falling by more than 1% on an intraday basis. Tech stocks have been among the most volatile.

Since the beginning of the bull market in March 2009, the price of tech shares has soared more than 480%. By contrast, the S&P 500 index has gained 290%. The tech sector was the Wall Street darling. Now it’s the media goat.

The Facebook/Cambridge Analytica scandal has weighed heavily on the so-called FAANG stocks: Facebook (NSDQ: FB), Apple (NSDQ: AAPL), Amazon (NSDQ: AMZN), Netflix (NSDQ: NFLX), and Alphabet’s (NSDQ: GOOG) Google.

Alphabet is a BTP holding. All five FAANG stocks have experienced sharp declines over the past few weeks, although they ended the trading session on March 29 in the green on the strength of positive economic data. The markets are closed today for the Good Friday holiday.

Technology stocks as a whole have taken a beating, in the wake of revelations that Cambridge Analytica, a London-based voter profiling company, harvested data from 50 million Facebook users at the behest of Donald Trump’s presidential campaign. Cambridge Analytica also provided covert assistance to right-wing causes across Europe, including the Leave campaign in the 2016 Brexit referendum in the U.K. The revelations came from a Cambridge Analytica whistleblower.

Cambridge Analytica was founded by billionaire hedge fund tycoon Robert Mercer, a shadowy figure who has funded Trump and other conservative causes and campaigns. Mercer has purposely stayed out of the limelight, although he’s been getting a lot of press lately. Mercer also has funded Trump lieutenant Steve Bannon and the latter’s incendiary web site Breitbart.

Cambridge Analytica stands accused of purloining personal data from Facebook to target voters via various media outlets, bombarding them with “fake news” and other disinformation campaigns. The data mining firm created “psychographic” profiles of voters, especially in crucial districts in swing states, who were particularly susceptible to propaganda and smear tactics. Facebook has been slow to respond to the revelations.

It all got much, much worse for Facebook today. An explosive Facebook internal memo was leaked to the press that defended the company’s strategy, even if it got people killed.

The top news headlines today center around the memo. Here is a salient excerpt from the memo, which was written by a Facebook executive in 2016:

“We connect people. Period. That’s why all the work we do in growth is justified… That can be bad if they make it negative. Maybe it costs someone a life by exposing someone to bullies. Maybe someone dies in a terrorist attack coordinated on our tools. And still we connect people.”

Ouch. That’s shockingly nihilistic, even for a Silicon Valley entrepreneur. Facebook stock will likely tank when the markets open again on Monday, with the fallout weighing on the entire tech sector.

Small wonder that tech investors have the jitters lately. Let’s take a closer look at events roiling the sector, with an eye on our holdings and the moves to make now.

Headline Risk on Steroids

Facebook’s woes have especially hurt Alphabet’s search-engine giant Google.

The Internet was created under a tacit understanding: Post your personal data and the digital realm will be free to share that data.

The average person’s love affair with social media has spawned a torrent of detailed consumer data that can be harvested for marketing and advertising purposes. Advertisers in turn pay for access to those metrics.

The business model worked. Now, it’s under attack from users, regulators and lawmakers. The behemoths of Silicon Valley face a crisis of confidence.

For the past several months, the worsening coarseness expressed on social media has stirred debate about whether social media is bettering society or debasing it. Cyber bullying has become a pressing issue. Concerns about fake news have come to a head.

The U.S. Federal Trade Commission this week announced that it had started an investigation of Facebook’s privacy policies. FB shares have plunged over the past two weeks, wiping out more than $50 billion of the company’s market valuation.

Amazon has lost $53 billion in market value, making it FAANG’s biggest loser. The news media reported this week that President Trump is “obsessed” with regulating the e-commerce behemoth, because of its favorable tax treatment. This week, Trump tweeted negative remarks about Amazon’s tax status as an online retailer. The stock got pummeled.

We’ve seen the ability of our Tweeter-in-Chief to wipe out hundreds of billions of dollars of a company’s market value with a single tweet. That’s headline risk, on steroids.

Congressional Grilling

Senate Judiciary Chairman Chuck Grassley (R-IA) has officially invited Facebook CEO Mark Zuckerberg to testify at a hearing on data privacy scheduled for April 10. Grassley also has invited Google CEO Sundar Pichai and Twitter (NYSE: TWTR) CEO Jack Dorsey. Zuckerberg this week signaled his willingness to appear.

The poplar browser Mozilla last week ceased advertising on Facebook, asserting that the social network’s default privacy settings allowed access to too much personal data. More defections will surely come.

Zuckerberg has been strongly criticized for being arrogant and obtuse about the Cambridge Analytica breach. His “apology” this week was seen as insufficient and half-hearted.

When hearings start on Capitol Hill, Zuckerberg and any other tech CEOs who agree to appear will get a grilling. Expect social media stocks to take a further pounding.

European Union regulators already have clamped down on privacy violations and are preparing to place restrictions on Internet advertising.

The EU in May will implement a sweeping, new privacy law. Dubbed the General Data Protection Regulation, the law treats personal data as owned by an individual. Any use of that data must be accompanied by permission after receiving a written request. “Opt out” will be replaced with “opt in.”

The European Commission has proposed levying a 3% tax on tech firms such as Facebook and Google that operate in Europe but have little physical presence there.

The U.S. has no counterpart to the General Data Protection Regulation, but several lawmakers in Congress have pushed for similar legislation. A bill was recently introduced in the U.S. Senate to mandate greater transparency in digital political advertising.

Caught in the Blowback

Portfolio holdings NVIDIA (NSDQ: NVDA), Himax (NSDQ: HIMX) and Vuzix (NSDQ: VUZI) aren’t social media stocks. NVIDIA and Himax are chip makers and Vuzix makes virtual reality/augmented reality (VR/AR) smart glasses. These three companies haven’t been immune from controversy.

Two fatal crashes this week — one of a self-driving Uber car in Arizona and the other a Tesla (NSDQ: TSLA) car with autonomous features in California — loom ominously for NVIDIA.

As regulators scrutinize those accidents, the shares of portfolio holding NVIDIA and electric car maker Tesla have plummeted. NVIDIA makes chips for self-driving vehicles, as well as for VR/AR devices. Since the crashes, NVIDIA has suspended all self-driving car tests.

Short sellers recently issued reports critical of Vuzix, alleging that the company used various promotional schemes to artificially inflate the share price. Lawsuits have ensued. It’s reminiscent of similar woes triggered by short sellers that have embroiled such companies as Himax and data analytics firm Criteo (NSDQ: CRTO). The latter stock is not a BTP holding.

To address the Himax controversy, I’ll quote my colleague Jim Pearce, chief investment strategist of Investing Daily’s flagship publication Personal Finance. Jim has written incisively on the topic:

“…it has also become clear that [Himax] has been the target of periodic short-selling campaigns enabled by misinformation planted in the media designed to scare shareholders into dumping the stock.

That is one of the risks specific to owning stocks domiciled overseas and outside the reach of U.S. securities regulators. Our system is not perfect at eliminating fraudulent behavior, but on the whole it is much better than what passes for market enforcement in most other jurisdictions. Over the long run, that type of activity should not have a material impact on the stock’s value, but it can create some havoc (and frustration) in the near-term.”

All of this white noise is superseded by guidance Himax provided for 2018:

“We believe 3D sensing will be our biggest long-term growth engine and, for 2018, a major contributor to both revenue and profits, consequently creating a more favorable product mix for Himax starting the second half of 2018. We expect significant revenue and profit growth this year,” said Mr. Jordan Wu, president and chief executive officer of Himax.

The fact is, the companies in our portfolio provide intrinsically sound and useful products and services. Tech CEOs such as Zuckerberg and Tim Cook of Apple realize that the future is in autonomous cars and VR/AR applications.

Investors are worried that tech companies, historically given free rein in the name of fostering innovation, will now face tighter regulation. Greater oversight and restrictions would impinge on profits, at a time when many tech stock valuations are excessive and based on perhaps unrealistic expectations about future earnings growth.

I’ll be keeping a particularly close eye in coming days and weeks on the corporate operating results of our BTP holdings.

If earnings come in strong, many of the fears stoked by headline risk could wane. I’ll reevaluate those holdings with weak quarterly report cards.

In the meantime, until we get political clarity and the next round of earnings releases, GOOG, NVDA, HIMX, and VUZI are all holds.

John Persinos is chief investment strategist of Breakthrough Tech Profits.