>> Facebook's crisis over user data is spreading like wildfire across tech companies. The social media giant's stock fell another 2.5% on Tuesday, following a nearly 7% drop the day before. The two day sell off in Facebook alone, erasing some $55 billion in stock market value. The drop comes after reports of political consultantancy, hired by Donald Trump, improperly accessed information on 50 million Facebook users to sway public opinion.
The head of that consultancy, Cambridge Analytica, put on leave Tuesday after a damaging TV expose aired on Britain's Channel 4. Those reports coming on the heels of revelations Russian trolls used the site to pump fake news to American users ahead of the 2016 Presidential election. Some investors are backing away from the company wary that what they thought was a place to share memories could be manipulated or even weaponized for political purposes.
Other shareholders are worried governments on both sides of the Atlantic, are going to step up oversight and jeopardize a fast growing industry that's made a whole lot of money for investors. Facebook executives aren't speaking about any of this but they seem to want to address the backlash. The company held a private staff meeting Tuesday for employees to vent their frustrations.
But that's not all, a hashtag, BycottFacebook campaign is spreading across various social media platforms with Facebook users outraged by perceived violation of trust. And the blowback isn't just hurting Facebook. Twitter shares plunged over 10% Tuesday, wiping out $3 billion in market value as investors fear governments will go after all social media companies just the same.
The US Federal Trade Commission informed Facebook that it is looking into the matter. That brings yet another worry to investors. A possible fine that could cost Facebook billions of dollars.>> It's good when you click