• by Erik Sass , Staff Writer @eriksass1, January 15, 2016

The beginning of 2016 hasn’t been kind to investors in general, as the stock market tumbles amid concerns about the slowing economy in China and plunging oil prices. But within the wider angst the social media sector is having its own mini-meltdown, with share prices falling even more than the overall indices. Although each company has its own story of woe, broadly speaking the decreases reflect concerns about overvaluation, profitability and growth rates.

Facebook, the world’s dominant social network, has seen its share price sink from a recent high of $107.26 on December 29 to $94.28 at the time of writing, for a 12% drop in a little over two weeks. For comparison, the Dow Jones Industrial Average is down about 9% over the same period. Of course, Facebook’s shares are still well above their IPO price of $38 in May 2012, but the steady downward march has to be keeping investors up at night.

While there are no major setbacks to account for this drop, analysts pointed to Facebook’s high price-to-earnings ratio of one to 96, compared to an average of one to 15.53 for DJIA and one to 22.01 for the Nasdaq 100. Investors may also be concerned about a hostile regulatory environment abroad: in Europe Facebook is facing a slew of privacy investigations over its use of cookies, access to users’ email contacts and data transfers to the U.S., among other things. Meanwhile the Indian government recently put the kibosh on Free Basics, its program to bring Internet access to underserved areas, on net neutrality grounds.

Twitter’s share price has declined steadily from a recent high of $31.34 in October, when co-founder Jack Dorsey returned as CEO, to $17.98 today, a steep drop made even worse by the fact that the current price is also down 31% from its IPO price of $26 a share in November 2013. Twitter is contending with more serious long-term concerns than Facebook, including its lackluster growth rate, which has slumped from almost 40% year-over-year in the third quarter of 2013 to just 8% in the third quarter of 2015 (to 307 million monthly average users), the most recent quarter for which figures are available. The slowing growth rate wouldn’t be such a big deal if Twitter were profitable, but it’s not: the company posted a net loss of $131.7 million in the third quarter of 2015, down from $175.5 million in the third quarter of 2016.

LinkedIn, long the high-flier in the social media sector, has seen its stock price erode from $255.54 on November 10 to $194.07 at the time of writing. That’s still up from the IPO price of $45, but again the recent slump seems to reflect concerns that the stock may be overvalued. Analysts noted that LinkedIn’s earnings per share has been disappointing, as its net loss increased from $4 million in the third quarter of 2014 to $40.5 million in the third quarter of 2015.