Wall Street turns on social media after Facebook scandal
Investors are beginning to sour on some of the biggest tech companies since weekend revelations that data firm Cambridge Analytica improperly accessed 50 million users' data through Facebook's platform. Stock prices were down for Facebook and its competitors — Google, Twitter, Snapchat — in light of the quickly-evolving scandal.
Why it matters: Calls for tighter regulation around user privacy and data transparency could completely upend the powerful business models around tech that have for years served as lucrative investment opportunities. This is the first time investors have reacted this strongly to a controversy around user privacy or election manipulation. Shares remained high for most of these firms throughout the Russia probe.
Unsurprisingly, Facebook's reputation has been hit hardest by the scandal. The company lost $64 billion in market value since the story broke this past weekend, Axios' Dan Primack notes.
The concerns are particularly heightened for open platforms that can more easily be abused by bad actors. Some of the biggest tech companies, like Google, Facebook and Twitter are built to be easily accessible to users and developers around the world. This has allowed them to develop massive user bases and a lucrative marketing business that we are learning now can be exploited.