Facebook stock rebound
Facebook (FB) stock jumped 4.5% on April 9, 2018, after three weeks of mayhem. The rise was reassuring to investors following two days of testimony from the company’s CEO, Mark Zuckerberg, before Congress.
Facebook came under scrutiny when a data misuse scandal surfaced in March 2018. The social media giant was targeted for putting the personal information of millions of its users at risk, which pulled down its shares.
Cambridge Analytica scandal
The news about Facebook sharing users’ personal information emerged on March 19, 2018, and shook the entire tech sector, especially social media players. In 2014, data analysis company Cambridge Analytica collected the data of ~87.0 million users through a survey and misused it by influencing the US presidential election.
Impact on FAANG stocks
The data breach issue and other recent events related to fake Russian accounts influencing the US presidential election have raised concerns related to Facebook’s business operations and its data and privacy policies. The incident has significantly affected Facebook stock, eroding its market value by almost $50 billion since March 17.
On March 19, the company’s stock tumbled 6.8%, its worst fall in the last four years. Naturally, the impact of the scandal will affect the FAANG stocks—Facebook, Amazon (AMZN), Apple, Netflix (NFLX), and Google’s parent, Alphabet (GOOGL). The FAANG stocks, which make up over 11% of the S&P 500 Index, posted falls of 16.2%, 3.7%, 4.1%, 5.9%, and 11.6%, respectively, between March 12 and March 29.