Mark Zuckerberg, CEO and founder of Facebook (NASDAQ: FB), spent ten hours taking questions from lawmakers in Congress on Tuesday and Wednesday this week. Following the hugely publicized data breach scandal involving Cambridge Analytica, some investors had lost confidence in Facebook.
Zuckerberg’s testimony was seen as a make or break moment, and the good news for stockholders is that the company came out on top, with stocks rallying since Wednesday.
The Data Scandal That Shook Facebook
On March 16, The Observer of London and The New York Times both broke news that Cambridge Analytica (a political data and consulting company) had misused FB user data to provide targeted political advertising to more than 50 million users. Facebook stock value immediately dropped, and the company went into damage control mode.
Eventually, it was found that more than 80 Million FB user records were compromised in the data misuse case, and Congress summoned Mark Zuckerberg to provide testimony regarding his company, the data it collects, and the processes that exist to safeguard that data.
Stock dropped by more than 16% in March when the scandal broke, but it has been recovering since then, and this week’s testimony has sent the stock climbing even more.
Ahead of trading on Friday the 13th, Facebook shares are valued at $163.57, which is a significant jump from the recent low of $152 on March 26, when confidence in the company was at its lowest.
The big question now is whether FB can continue to regain value, and if the company has done enough to reassure both its users and investors.
One Year Growth
Over the past 12 months, FB has increased in value by 17.56%. Even with the data misuse scandal, Facebook remains one of the most valuable stocks on Wall Street. Investors have shown that confidence is returning, which is evident in the 5-day growth of 4.24% (as of Friday morning).
If Facebook can implement the new privacy tools that have been promised, then they will be able to leave the Cambridge Analytica data scandal behind them.
Investors can take confidence in the fact that Zuckerberg and FB were the ‘winners’ coming out of the Congress testimonial, and with share price still lower than its peak in 2018, now could be a good time to reinvest in Facebook stock.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…