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In the midst of the data scandal, Facebook’s stock has fallen for second straight day, losing 5% in value on Tuesday. The loss marked the worst performance for the tech giant in the last four years.
The company lost $50 billion in market value this week alone, and its troubles are not over yet. Shareholders pushed back against Facebook over the media reports that the company handed over private data on tens of millions of U.S. Facebook users to Cambridge Analytica.
The firm, which had ties with the Trump campaign at the time, reportedly used the sensitive info on 50 million users to influence their voting decisions. Facebook’s stock market troubles negatively impacted the broader tech sector.
According to S&P 500, the tech sector shed 2% in value overnight. The worst hit was Twitter with a 9% loss, and Snapchat coming in second with a 4% loss.
Facebook’s Stock Could Slump Even Further
Facebook’s market value currently stands at $500 billion, which makes it one of America’s strongest companies. The loss caused by the data scandal is larger than some other major companies’ valuations, like eBay or Ford.
The U.S. Congress and British lawmakers are urging the company’s co-founder and chief executive Mark Zuckerberg to testify about the data breach. Lawmakers want to learn more about the policies that protect users’ data and whether those policies have been broken.
Zuckerberg’s stake in the company is 400 million shares, which means that he lost $7 billion in less than a week. He still has $70 billion in company assets and has the majority when it comes to investor vote. So, he won’t be losing his job anytime soon.
Shareholders, however, are concerned about the negative press and the prospect of tighter regulations. So, many of them sold off their shares before things got even worse. Facebook’s main source of revenue is ads, so if users decide to quit the platform in droves, its business model could collapse.
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