Facebook drags down tech companies as stocks slide
Facebook plunged to its worst loss in four years Monday and led a rout in technology companies. The social media company’s stock fell after reports that a data mining firm working for the Trump campaign improperly obtained data on 50 million Facebook users.
The drop in Facebook stock came after the New York Times and the Guardian reported that the firm, Cambridge Analytica, was able to tap the profiles of more than 50 million Facebook users without their permission. Legislators in the U.S. and Europe criticized Facebook and said they want more information about what happened. Investors wondered if companies such as Facebook and Alphabet will face tighter regulation as a result.
Daniel Ives, chief strategy officer and head of technology research for GBH Insights, said Facebook is in a crisis, and it will have to work hard to reassure users, investors and governments.
“This is a defining moment for them,” he said. “It either becomes a blip on the radar and it helps the platform mature ... or it becomes the start of something broader.”