And the hits just keep on coming for Facebook (META -0.17%) -- in a bad way.
Earlier this week, Facebook stock was slammed when it became apparent that The Wall Street Journal is publishing a multipart series on problems at the social network, airing dirty laundry in a manner that seems almost certain to affect the company's share price.
And affect it, it has. So far this week, Facebook stock has slumped 3.6%, a decline of more than $36 billion in market capitalization, including today's 2.1% decline through 1:20 p.m. EDT.
To date, the publication's series The Facebook Files has reported that:
- Facebook's XCheck program effectively exempts high-profile posters (think film stars, politicians, and business magnates) from its ordinary rules against posting abusive content or "inflammatory claims that Facebook’s fact checkers deemed false."
- Instagram has deleterious effects upon the mental health of teenage girls trying to live up to a photo-edited version of reality online.
- Facebook tends to make its users "angrier" through the widespread dissemination of riveting (but controversial) content.
- And today, the Journal published an article suggesting "human traffickers" are using Facebook "to lure women into abusive employment situations," and that "armed groups" are using Facebook posts "to incite violence against ethnic minorities." And, the article said, these and similar abuses of the platform have elicited an "inadequate" response from Facebook "or nothing at all."
So why is Facebook stock down again today? The better question would be how could articles like these not have a negative effect on the stock price?
And even now, the worst of the damage might not yet have been done. The Journal already has an article on its website (likely to appear in Saturday's print edition) that argues that despite Mark Zuckerberg's best intentions to help get the word out about the need for Americans to get vaccinated against COVID-19, in fact, the dynamics at work on Facebook today (for example, the statement above about Facebook making people "angrier") actually "hobbled" the CEO's efforts.
The issues raised by the Journal's reporting will likely go far beyond just its readership. This series is the stuff that Congressional inquiries could be made of.