Facebook shares down for second day in succession on data scandal

Facebook’s privacy crisis has turned into a shareholder crisis. The social media giant has now lost over $60 billion (€48.9 billion) in market value over the past two days, following revelations that personal data of millions of users was obtained by a data analytics firm. That’s more than the market capitalisation of Tesla, at around $52 billion, or three times that of Snapchat owner Snap at about $19 billion.

Facebook shares tumbled 6.8 per cent on Monday, the most in almost four years, and the selloff resumed on Tuesday with news that the US Federal Trade Commission is reportedly investigating the handling of user data, and a report that chief security officer Alex Stamos plans to leave.

Shares fell 4.7 per cent to $164.51 just after lunch in New York. The two-day rout is the worst since July 2012, the year of Facebook’s initial public offering at $38 a share.

Chief executive Mark Zuckerberg has faced calls from both US and European authorities demanding explanations from the company following a number of reports of alleged misuse of personal data by behavioural targeting firm Cambridge Analytica in the US.

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Fears of increased regulation on how companies use data also sent shares of other internet stocks down as well on Tuesday.

Deter users

The meltdown has cost Mr Zuckerberg $7.4 billion of his fortune on paper so far as investors worry that damage to the reputation of the world’s largest social media network would deter users and advertisers.

The fall comes after a whistleblower said Cambridge Analytica, a London-based political consultancy hired by Donald Trump, improperly accessed information on 50 million Facebook users to sway public opinion.

The company said last month it had 1.4 billion active daily users, up 14 per cent from a year earlier.

The US Federal Trade Commission is investigating Facebook, while the head of Britain’s Information Commission is seeking a warrant to search the offices of Cambridge Analytica.

The Data Protection Commissioner in Ireland is also “following up” with Facebook Ireland on issues relating to oversight of third parties who access its users’ data, it said on Tuesday.

While all the attention was firmly on Facebook, Oracle was the biggest percentage decliner on the S&P 500 early on Tuesday, falling 9 per cent after the business software maker reported quarterly revenue that missed Wall Street estimates on disappointing sales from its cloud business.