Facebook’s Cambridge Analytica data debacle could be more damaging to the company than any of its other recent missteps.
Facebook has lost nearly $50 billion in market cap since the data scandal
That’s the stock’s biggest-ever two-day drop.
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Rani Molla was a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.
The news that the data analytics firm that helped Donald Trump get elected president was able to amass data on 50 million users without their permission has sent Facebook’s market value down nearly $50 billion since Friday. That’s the stock’s biggest two-day decline ever. As of market close on Tuesday, Facebook’s stock price was $168, about 10 percent lower than it was on Friday, according to FactSet.
Tuesday also marks Facebook’s biggest trading day since 2014, with upward of 129 million shares of Facebook stock changing hands.
There have been a number of reasons for shareholder concern. In February, special counsel Robert Mueller said that Facebook had been infiltrated by fake Russian accounts supporting Donald Trump.
In the beginning of January, Facebook said algorithm changes could leave people spending less time on Facebook, presumably meaning fewer ad dollars.
Back in the summer of 2016, Facebook announced that its News Feed had become saturated with ads, so the company would need to find new ways to grow its ad business, its main source of revenue.
Still, none of those changes affected Facebook’s stock as badly as the Cambridge Analytica news, a sign that Facebook’s current crisis might be the most important we’ve seen yet.
This article originally appeared on Recode.net.
