Please ensure Javascript is enabled for purposes of website accessibility

Why Facebook Stock Lost 10.4% in March

By Keith Noonan – Apr 9, 2018 at 4:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The social network has been beset by scandals over how it handles user data, and there's a good chance that more will emerge.

What happened

Shares of Facebook (META 1.17%) lost 10.4% of their value in March, according to data provided by S&P Global Market Intelligence.

The month saw Facebook affected by a string of data and user privacy scandals. News broke that Cambridge Analytica, a data analytics firm used by President Trump's election campaign, had access to huge amounts of user data; it triggered outrage. This was followed by another story indicating that Facebook had let Barack Obama's campaign copy its entire social grid for its 2012 campaign. Then news hit that the company was scanning texts and pictures sent through its Messenger app.

FB Chart

FB data by YCharts.

So what

The controversies seem to have had a significant impact on the way the public thinks about Facebook and other large technology companies that have access to huge troves of user data. For those following Facebook closely, the news that the company sells user information probably does not come as a shock, but the Cambridge Analytica story seems to have prompted media outlets to take a more critical eye to the company's business practices. This, in turn, has translated to increased public dissatisfaction, and it remains an ongoing public relations fiasco.

Facebook has since made changes to its privacy settings, and is investigating apps that had deep access to user data prior to a policy change made in 2014. There's now increased demand for these types of stories in the media, and the way that Facebook operates means there are many additional angles and revelations that could create controversy.

A computer graphic of a fingerprint

Image source: Getty Images.

Now what

Facebook recently revealed that as many as 87 million users had their data accessed by Cambridge Analytica, though the data firm said that the number was 30 million. Chief operating officer Sheryl Sandberg has stated that the company's internal investigation could unveil new data breaches, and Mark Zuckerberg is set to be interviewed by Congress on April 11. It does seem like the recent media flare-ups have caused diminished trust in the company's brand, but it's not clear to what extent these scandals will result in reduced engagement or the loss of users over the long term.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$137.26 (1.17%) $1.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.