Facebook ended the week $58bn lower in value after its handling of a historic data breach. Its founder Mark Zuckerberg apologised for data breaches that affected 50 million users.
The apology did not stop investors from selling shares in Facebook, with many wondering just how bad the damage would be for the social network.
The breach was called a “light bulb” moment for users, spawning the social media trend #deletefacebook.
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.
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. ”
Has Zuckerberg done enough to reassure people?
The Facebook founder tried to reassure users “the most important actions to prevent this from happening again today we have already taken years ago.”
However, Passion Capital tech investor Eileen Burbidge, who is also on the Prime Minister’s Business Advisory Group, said Facebook’s reassurance to users and clients took too long.
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.
The sentiment was echoed by the European Union’s commissioner for justice, consumers and gender equality Vera Jourova said the Cambridge Analytica allegations had been “a huge wake-up call” for Facebook users about the demand for their data.