Facebook Loses $35 Billion as Cambridge Analytica Data Scandal Rocks Tech Stocks
Facebook drops 6% in market value after revelations that Cambridge Analytica improperly accessed 50 million user profiles. The scandal triggers a broader tech selloff and prompts calls for new government regulations.
Facebook loses $35 billion in market value as spooked investors react to reports that Cambridge Analytica gains unauthorized access to 50 million user accounts. The social media giant's shares drop 6% on Monday, wiping out more value than the entire worth of Snapchat's parent company. Investigators find that the data firm uses this improperly obtained information to target voters with political messages during the 2016 presidential election.
The scandal sparks a massive selloff across the technology sector, with Alphabet shedding nearly $27.3 billion in value amid broader market fears. Lawmakers in both the United States and the United Kingdom demand immediate investigations into the incident. This intensifies the already heavy scrutiny on social media platforms regarding their handling of user information and their role in previous election interference events.
Facebook responds by suspending Cambridge Analytica from its platform, though the company insists the data is gained through legitimate channels rather than a traditional breach. However, Facebook admits it orders the data destroyed in 2015 and discovers that the firm still holds most or all of the sensitive information. This explanation fails to satisfy legislators, who continue to push for increased regulation of the tech industry.