×
You will be redirected back to your article in seconds

Facebook Stock Inches Up After Steep Declines, #DeleteFacebook Gains Momentum

UPDATED, 4:15 p.m. ET: Shares of Facebook rebounded into positive territory Wednesday, halting a two-day slide as the company and investors continue to reel from a data-privacy scandal that has damaged public trust in the social-media giant.

Facebook’s stock closed up 0.7% for the day, after opening down 2% and then ticking up as much as 3% during trading Wednesday. The stock is still down 8.5% from its closing price last Friday, before details of the scandal first emerged, representing a $45.6 billion decline in Facebook’s market cap since then.

The storm whipping around Facebook centers on Cambridge Analytica, a U.K.-based consulting firm that obtained access to details on some 50 million Facebook users — without their knowledge or consent. Cambridge Analytica did work for Donald Trump’s 2016 election campaign. While the firm has denied using the Facebook data in question on Trump’s behalf, Cambridge Analytica on Tuesday suspended its CEO after he was caught boasting about their extensive contributions to the campaign in a Channel 4 documentary. Facebook claims it was deceived by the researcher who turned over the data.

In the wake of the controversy, the hashtag “#DeleteFacebook” has been gaining steam as users vent their frustration. On Tuesday, Brian Acton, one of the founders of WhatsApp — which Facebook acquired in a deal valued at $19 billion — called for a boycott in a tweet: “It is time. #deletefacebook.”

Acton is now executive chairman of Signal Foundation, a non-profit org developing open-source privacy technology. He has a net worth of $5.5 billion, according to Forbes estimates.

Also Tuesday, venture-capital investor Roger McNamee — one of Facebook’s earliest backers — warned in an interview with CNN that the company’s top executives are failing to deal with a crisis that could “destroy” it.

“They haven’t even taken the first step of admitting there’s a problem,” he said in the interview. “If they don’t do something pretty soon, people are going to realize they can’t trust Facebook anymore” and that could “threaten them permanently.” McNamee, who still holds Facebook stock, added that Facebook senior execs “are not talking to me anymore, so I have to communicate through the press.”

On Wednesday, CFRA Research upgraded its rating on Facebook from “buy” to “strong buy,” but cut its 12-month price target on the stock by $40 per share, to $120.

“Applying discounts, given more reputational and regulatory risks related to the Cambridge Analytica situation, results in our target,” CFRA director of equity research Scott Kessler wrote in a note. Although Facebook “is in the crosshairs” of regulators, legislators, and lawyers related to its policies and business practices, he added, “We believe FB will make it through this difficult period, and note a 15% decline [in the stock price] from last month’s high.”

Facebook CEO Mark Zuckerberg has not commented publicly on the Cambridge Analytica scandal. His last public post on the social service was on March 2, nearly three weeks ago. [UPDATE: Zuckerberg released a statement Wednesday afternoon acknowledging the company made “mistakes” and pledging steps to restore user trust.]

The company is the target of a class-action lawsuit, filed Tuesday in a San Francisco federal court by shareholders who allege Facebook misled them because it didn’t disclose the unauthorized access to user data by Cambridge Analytica. Facebook also is facing an FTC probe and lawmakers in the U.S. and Europe have called for hearings on the matter.

In statements to the media, Facebook has said Zuckerberg and COO Sheryl Sandberg are working “around the clock” to address the issue.

“The entire company is outraged we were deceived,” Facebook said in a statement released Tuesday. “We are committed to vigorously enforcing our policies to protect people’s information and will take whatever steps are required to see that this happens.”

So far, the Cambridge Analytica news and the #DeleteFacebook campaign do not appear to be slowing down new, first-time installs of the Facebook app, according to mobile-analytics research firm Sensor Tower. (The firm does not provide info on app uninstalls.)

Since Monday, user ratings for the Facebook app in Apple’s App Store have about 86% negative sentiment (two or fewer stars out of five), but that’s only slightly higher than the 83% negative sentiment during the two weeks prior to the Cambridge Analytica news breaking. In addition, less than 10% of reviews for the app so far this week mention Cambridge Analytica or data-privacy concerns, per Sensor Tower.

Popular on Variety

More Digital

  • Gabrielle Carteris

    SAG-AFTRA Urges Gavin Newsom to Sign Law Punishing 'Deep Fake' Videos

    SAG-AFTRA National Executive Director David White is urging Gov. Gavin Newsom to sign legislation that institutes penalties for nonconsensual digital sexually explicit videos, also known as “deep fakes.” The legislation, Assembly Bill 602, targets companies and individuals who create and distribute the videos in California without the consent of the individual being depicted. “We urge Gov. [...]

  • Facebook Portal logo

    Facebook Is Launching a Portal TV Device: Here’s What We Know

    Facebook is getting ready to launch a TV streaming device in time for the holiday season, Variety has been able to confirm with multiple sources familiar with the company’s plans. The new streaming hardware will be part of the company’s Portal family of devices, featuring a camera, and combining video chatting with TV viewing and [...]

  • MoviePass card

    MoviePass Shuts Down, With Parent Company Citing Failure to Raise Funds

    MoviePass, the long-struggling theater subscription service, finally appears to be down for the count. On Friday, MoviePass notified remaining subscribers that it would be shutting down the service effective Sept. 14, 2019, because “its efforts to recapitalize MoviePass have not been successful to date,” parent company Helios and Matheson Analytics announced. “The company is continuing [...]

  • Disney Plus - Full Lineup

    How to Browse the Disney Plus Catalog the Company Is Testing in the Netherlands

    Disney began testing its Disney Plus streaming service in the Netherlands this week. Consumers in the U.S. will have to wait until November 12 to get access to the service, but European streaming aggregator JustWatch already makes it possible to browse the catalog available during this beta test. JustWatch is one of a number of [...]

  • JoJo Siwa'The Angry Birds Movie 2'

    Nickelodeon Star JoJo Siwa Gets Her Own Dance-Tour Mobile Game (EXCLUSIVE)

    Fans of JoJo Siwa will be able to join the teen influencer’s dance squad on stage — virtually — in a new mobile game. In “JoJo Siwa — Live to Dance,” players will become part of the Nickelodon and YouTube star’s worldwide tour on her professional dance team and experience what it’s like to be [...]

More From Our Brands

Access exclusive content