Facebook stock dives to worst loss in 4 years
Facebook plunged to its worst loss in four years yesterday and led a rout in technology companies. The social media company’s stock fell following reports that a data mining firm working for the Trump campaign improperly obtained data on 50 million Facebook users.
The drop in Facebook stock came after the company said Cambridge Analytica improperly obtained data from some of its users.
The New York Times and the Guardian reported that Cambridge was able to tap the profiles of more than 50 million Facebook users without their permission. Legislators in the U.S. and Europe criticized the company’s response, and investors wondered if companies like Facebook and Alphabet will face tighter regulation as a result.
Daniel Ives, chief strategy officer and head of technology research for GBH Insights, said Facebook is in a crisis, and it will have to work hard to reassure users, investors and governments.
“This is a defining moment for them,” he said. “It either becomes a blip on the radar and it helps the platform mature … or it becomes the start of something broader.”
The S&P 500 index sank 39.09 points, or 1.4 percent, to 2,712.92. The benchmark index took its biggest loss since Feb. 8, when it tumbled almost 4 percent as investors worried that rising inflation would slow the progress of the market and the U.S. economy.
The Dow Jones industrial average fell 335.60 points, or 1.3 percent, to 24,610.91. During the day it fell as much as 493 points.
The Nasdaq composite gave up 137.74 points, or 1.8 percent, to 7,344.24. Larger technology companies including Apple and Microsoft fared worse than smaller ones.
Another market favorite, Amazon, also dropped, and health care stocks fell more than the rest of the market.