Facebook Shares Recover From Cambridge Analytica Scandal
(Bloomberg) -- Facebook Inc.’s shares have recovered from a data scandal that caused a reckoning over how the company handles user privacy and sent Chief Executive Officer Mark Zuckerberg to testify in front of Congress.
Since the revelation in mid-March that Cambridge Analytica, a political ad consulting firm, got data on tens of millions of users without their consent, Facebook has been scrambling to address criticism. The company reviewed all its products and made changes to how much information it shares with app developers.
Facebook shares climbed as much as 1.4 percent to $185.25 in morning trading in New York. The stock had closed at $185.09 on March 16, just before the news broke. It rebounded 16 percent from a low for the year in late April.
“I just think this will blow over and the stock is going to go higher,” said Gary Bradshaw, a fund manager at Hodges Capital Management who owns about 250,000 shares of Facebook for his clients. “I don’t see the companies that advertise backing away.”
The increased public skepticism about Facebook’s data standards has so far done little to affect the company’s financial performance. Facebook in late April reported first-quarter revenue that beat analysts’ estimates and said it continued to add users.
Still, those results may not reflect all the impact of the episode, which spiraled into a crisis during the second quarter. Facebook is also working to implement European data-privacy laws, which it has said may cause it to lose daily users in that region, one of its most lucrative advertising markets.
©2018 Bloomberg L.P.