Yesterday was a bad day for the stock market, but Facebook stock prices were hit hard because investors see problems in the product.
Facebook stock prices are showing the damage done by reports that users’ private data was misused. Since these stories are negative for the Trump campaign, Facebook’s problems have gotten more coverage than they probably would have otherwise. Who would have predicted that the media’s “resistance” to Donald Trump would hurt Mark Zuckerberg?
The Nasdaq composite pulled back 2.2 percent as Facebook dropped sliding 7.3 percent, on track for its biggest one-day drop in five years.[…]
Facebook fell after reports said political analytics firm Cambridge Analytica was able to collect data on 50 million people’s profiles without their consent. Cambridge Analytica worked on Facebook ads with President Donald Trump’s campaign in 2016.
“We think this episode is another indication of systemic problems at Facebook … We see enhanced risks for the company, but no near-term tangible impact on its business,” Brian Wieser, an analyst at Pivotal Research, said in a note Monday. It was “made clear in the reporting is that Facebook did not make sufficient efforts to recover users’ data, which then informed ad targeting in the 2016 US election. It also did not disclose the leak to users or investors.”
Shares of Facebook traded more than 10 percent below their all-time high set on Feb. 1 and dropped below their 50-day and 100-day moving averages, two key technical levels. Google-parent Alphabet and Apple also fell, trading 3.6 percent and 1.7 percent lower, respectively.
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