Facebook's Value Plunges $58 Billion Over Data Breach Scandal
Mark Zuckerberg apologises citizens worldwide begin deleting Facebook
Facebook's value plummeted this week as shareholders scrambled to dump their shares in the social network following the data breach scandal.
After news of the historic data breach broke this week, $58 billion was wiped from the social media giant's value.
Facebook's founder Mark Zuckerberg apologized for the breaches that affected 50 million users, but it did little to limit the damage.
The exposé, which Facebook has been aware of since 2015 but the news has only recently gone public, has been described as a "lightbulb" moment by many.
The discovery has also triggered a #DeleteFacebook movement to go viral in which citizens all over the world are choosing to delete their Facebook accounts.
Even PayPal founder Elon Musk has chosen to delete the Facebook pages for his SpaceX and Tesla companies, both with millions of followers each.
After years of censorship, profiting from user's data, and pushing a liberal agenda, people are finally starting to rise up against the all-controlling "social" network.
BBC reports: All the negative headlines led to some advertisers saying "enough is enough".
Shares in the social media company fell from $176.80 on Monday to around $159.30 by Friday night.
Will the shares recover?
Facebook's initial public offering in 2012 priced shares at $38 each, giving the company a market valuation of close to $104bn.
Following steady user growth and a dominant space in the digital advertising market ensuring revenues, Facebook's share price climbed to $190 by February this year.
Brian Wieser, a senior analyst at Pivotal Research, said he had one of the most negative outlooks for Facebook's share price on Wall Street.
"I had a $152 price target on Facebook for 2018 - and that was before the events of this week".
Mr. Wieser said the share price slump showed investors were wary of increased regulation and users leaving the platform "but there's little risk of advertisers leaving Facebook. Where else would they go?"
Hargreaves Lansdown senior analyst Laith Khalaf said the week had been a "damaging episode" in Facebook's history.
"One of the secrets of Facebook's success has been that the more people who use Facebook, the more integral it becomes to its customers. Unfortunately for Facebook, the same dynamic cuts in the opposite direction if it loses a meaningful number of users as a result of this scandal. "
What has been the response from advertisers?
Advertising firm M&C Saatchi's founding director David Kershaw said the revelations that a 2014 Facebook quiz essentially harvested data from users and their connected friends without consent have led to a backlash from advertisers.
"Clients have come to the point, quite rightly, where enough is enough, " Mr. Kershaw said.
Advertisers Mozilla and Commerzbank on Wednesday suspended ads on the social media platform.
On Friday tech entrepreneur Elon Musk had the official Facebook pages for his companies Telsa and Space X deleted.
"Make no mistake Facebook is an amazing medium from the advertiser's point of view because of the accuracy of its targeting - which comes from data. But I think those large companies are very nervous to be associated with a medium where the data is being abused, particularly in a political context," Mr. Kershaw said.
Cambridge Analytica is at the center of a row over whether it used the personal data of millions of Facebook users to sway the outcome of the US 2016 presidential election and the UK Brexit referendum.
"Some people are using the term 'political manipulation'.
"They [Facebook] assumed they had already taken care of this... as they had already changed their terms of service, for example," Mrs. Burbidge said.
In Mr. Zuckerberg's online statement he offered a timeline of how Facebook's data permission agreements with users and other companies had changed since the 2014 personality quiz app was able to scrape data from quiz takers and their contacts without their expressed permission.
Mrs. Burbidge said there may need to be new regulation over political campaigning "which really hasn't kept up with social media".
What will Facebook users do?
Technology writer Kate Bevan said the week's events have woken Facebook's users up to the fact that the platform's games, quizzes, and apps could harvest their data for more serious intents.
"This week feels to me like a real lightbulb moment where people are understanding that it's not just clicking 'like' on Facebook, it's giving your data away".
The sentiment was echoed by the European Union's commissioner for justice, consumers, and gender equality Vera Jourova who said the Cambridge Analytica allegations had been "a huge wake-up call" for Facebook users about the demand for their data.
"The tiger has gotten out of the cage".