What happened
Shares of social media titan Facebook (FB 1.27%) fell 10.5% in September, according to data provided by S&P Global Market Intelligence. The stock kicked off October with another 5% decline in the first two trading days as pressure mounts against the company's accused use of data and control of information. A service outage in Facebook, Instagram, and WhatsApp on Monday, Oct. 4 didn't help either.
So what
While the stock market overall has been dealing with potential economic risks (higher interest rates, supply chain woes, and a possible U.S. government debt default if the debt ceiling isn't raised), Facebook's problems as of late are of an altogether different nature. The company has been dealing with a Federal Trade Commission antitrust lawsuit that seeks to retroactively unbundle Facebook's acquisitions of Instagram and WhatsApp, claiming the company has used its dominance to squash competitors.
Image source: Getty Images.
Additionally, a whistleblower (now revealed to be former employee Frances Haugen) who first started publishing documents taken from Facebook with The Wall Street Journal last month could add to the burden of evidence against the social media giant. The backlash against big tech's data practices isn't going away anytime soon, and it's Facebook that continues to bear the brunt of accusations.
Now what
For all of its flaws and the angst voiced against it, Facebook's popularity has been enduring. Its user base -- which numbers over 3 billion worldwide across all of its apps -- continues to grow, as does global advertising activity across its platform. Facebook is far from being unseated as the leader in social media anytime soon.
Shares are up 25% over the last trailing-12-month stretch even after the recent tumble. Perhaps a breather was overdue, and recent news simply added fuel to the fire. While Facebook's legal woes and impact on society at large are worth keeping an eye on, it's the financial results that matter most -- and Facebook is doing more than just fine financially right now. Sales and profits keep climbing, especially as the initial effects of the pandemic from a year ago are lapped.
