What happened

The bad news for Facebook (META 0.20%) just keeps getting worse -- and Facebook stock is down another 4.4% as of 11 a.m. EDT Monday.

Granted, the whole stock market seems to be having a bad day today. The S&P 500 as a whole is down 1.5%, and growth stocks in particular seem to be taking it on the chin. Yet Facebook has problems of an entirely different order.

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Image source: Getty Images.

So what

By now you're surely familiar with The Wall Street Journal's "The Facebook Files" project, in which Journal reporters gained access to -- and exposed -- a treasure trove of internal Facebook documents. These documents detail everything from the company's controversial XCheck program (which "whitelists" VIP Facebook users to post anything they want on the platform), to problems with Instagram and how it harms the mental health of teenage girls, to how human traffickers and armed groups conduct nefarious business openly on the social network.

Since those stories started dropping last month, shares of the social networking powerhouse have lost more than 12% of their value -- well over $100 billion in market capitalization. This morning, the latest shoe dropped when the Journal revealed the identity of its source, Frances Haugen, a former Facebook insider turned whistleblower who spent nearly two years working for Facebook on the company's Civic Integrity Team, which was tasked with figuring out how to stop the "spread [of] political falsehoods, [the stoking of] violence and [the abuse of Facebook] by malicious governments."  

The Journal reported on her efforts along these lines, and on Facebook's failure to accomplish any of the above, culminating in the disbanding of the Civic Integrity Team in December 2020.

Now what

Now comes the political fallout. Last Thursday, Facebook global head of safety Antigone Davis was hauled (virtually) before Congress to address Senators' concerns over the allegations raised by Haugen. The hearing focused specifically upon issues raised in only one of the "Facebook Files" reports, however -- the health of teenage girls using Instagram -- but at last report, the Journal had published a total of eight such articles on various topics.  

Investors at this point have to anticipate that there will be hearings on all of them, and that Facebook shares could remain under pressure for weeks or months to come.