Skip to main content

Facebook stock tanks after data breach report, shaving billions off company’s market value

Facebook stock tanks after data breach report, shaving billions off company’s market value

Share this story

If you buy something from a Verge link, Vox Media may earn a commission. See our ethics statement.

Stop Motion by Michele Doying / The Verge

Facebook’s stock has tanked after revelations that the company had shared the data of up to 50 million users with the political data analytics company Cambridge Analytica. By noon ET on Monday, it’s dropped by nearly 7 percent — the most that Facebook has fallen in a single day in over five years.

Within the indexes for major tech and financial companies like the Nasdaq 100 and the S&P 500, Facebook was the biggest loser today, reports Bloomberg. The loss cut into Facebook’s market capitalization by around $43 billion, or $15 per share. It began steadily climbing since the mid-day mark. Other publicly traded social network companies are also seeing the effects, with declines on both Twitter and Snap this morning.

On Friday, Facebook announced that it had suspended Cambridge Analytica for violating its Terms of Service by sharing millions of users’ data without their consent. Cambridge Analytica is partly owned by hedge fund billionaire Robert Mercer and played a role in Trump’s 2016 presidential campaign, and the connection raises continued concerns over the influence Facebook had in the election.

According to The New York Times, the co-founder of Cambridge Analytica, Christopher Wylie, led an initiative starting in 2014 to help political campaigns gain data on people’s political orientations and personal details. The company could not easily obtain such data through its own means, so it harvested data from Facebook instead.

By creating the app “thisisyourdigitallife” in 2015, University of Cambridge psychology professor Dr. Aleksandr Kogan obtained permission to access user account data and information about the friends of each person who downloaded the app. In a statement, Facebook said, “Kogan gained access to this information in a legitimate way and through the proper channels that governed all developers on Facebook at that time.”