Facebook Inc.’s recently announced pivot toward privacy and encrypted messages pushed former bull Needham to the sidelines while Bank of America Merrill Lynch said the move “adds some uncertainty.”

Shares of Facebook (FB) fell 3.2 percent, marking a third straight decline totaling as much as 7.3 percent. While the stock has rallied more than 30 percent from a December low, it remains more than 25 percent below a July record.

The privacy issue was just one of the factors driving Needham’s downgrade to hold from buy. The firm also cited the “growing risks” of government regulation and the recent massacre in New Zealand, which was live-streamed on Facebook. Such “horrific images” are “technologically difficult to block at the 100 percent level,” hurting Facebook’s brand, analyst Laura Martin wrote.

Together, “these risks are causing a Negative Network Effect, as evidenced by senior management departures,” she wrote, referring to the recent departure of Chris Cox, the company’s former chief product officer.

Needham kept its below-consensus estimates on Facebook, but noted that the company has warned of rising costs, falling margins and higher capital expenditures, all of which “may accelerate” as the company moves toward privacy.

BofAML analyst Justin Post wrote that the revenue impact of a more privacy-centric platform could raise questions on three-year growth as private messages have a lower monetization. He cut his price target on the stock to $187 from $205.

“While FB still has big opportunities to improve the monetization of stories and messaging, the question is if usage will deteriorate on core news feed.”

Currently, 41 analysts have a buy rating on Facebook, while nine view it as a hold and just two have sell ratings on the stock. The average price target is $196.

Last week, Nomura Instinet upgraded the stock to buy on growth in its Stories product. Separately, the analyst with the Street-high price target on Facebook shares praised the move to privacy, seeing it as a way to gain ground against competitors like Snap.