Facebook face-palm
Before Facebook’s announcement regarding privacy issues late Wednesday, the company’s stock was doing well. It rose just under one percent, giving Facebook a new record high stock value of $216.30.
But then, Facebook shocked investors, warning that the company’s sales will slow in the coming quarters as it continues to tackle privacy issues. Following this statement, their stock price value dropped by 19 percent on Thursday, equating to $120 billion in market value. In fact, Forbes has reported that Mark Zuckerberg’s own net worth has plummeted by more than $11 billion.
Facebook informed investors that it will put more money and resources into the development of privacy. For example, it will focus more on its Stories feature and less on the News Feed, which generates more money than Stories by a large margin.
Nevertheless, emphasizing privacy and security is a smart decision for the company. Facebook’s reputation is hanging on by a thread after the Cambridge Analytica scandal, and that’s affecting its number of users. Investing in the root of the problem will allow the company to grow instead of simply treating the small issues at the surface.
In the end, it seems like Facebook’s stock will always bounce back. Even after the CA rigmarole, from which Facebook’s stock plummeted, it still gradually came back. Until Wednesday, the company’s stock value was higher than it had been at the start of the year by almost 20 percent.
By this time next year, Facebook will likely eclipse $225, even if it did face this hurdle. The emphasis on privacy will prove to be integral to their company’s success.
Featured Image via Flickr/Stock Catalog
